The Oncology Drug Shortage A Continuing Crisis Karen Hagerty, MD Director, Reimbursement Policy

National Drug Shortages January 2001 to December 31, 2011 Note: Each column represents the # of new shortages identified during that year Source: University of Utah Drug Information Service Service

Shortage Drugs in Oncology (as of March 2012) Bleomycin Cisplatin Cytarabine* Dacarbazine* Daunorubicin Doxorubicin Doxorubicin, liposomal Etoposide Fludarabine* Fluorouracil Leucovorin Mesna Methotrexate Mitomycin Mustargen Ondansetron Paclitaxel Thiotepa Vinblastine *Listed on ASHP website only

Shortages by Drug Class University of Utah Drug Information Service

Hospital Shortages Percent of Hospitals Reporting the Number of Individual Drugs For Which the Hospital Experienced a Drug Shortage in the Last Six Months Source: AHA analysis of survey data from 820 non-federal, short-term acute care hospitals collected in June of 2011.

Nearly half of hospitals reported experiencing a drug shortage on a daily basis. Percent of Hospitals Experiencing a Drug Shortage by Frequency Source: AHA analysis of survey data from 820 non-federal, short-term acute care hospitals collected in June of 2011.

Patient Impact Percent of Hospitals Reporting the Impact on Patient Care as a Result of a Drug Shortage Source: AHA analysis of survey data from 820 non-federal, short-term acute care hospitals collected in June of 2011.

Three out of four hospitals report rationing or implementing restrictions for drugs that are in short supply. Percent of Hospitals That Have Implemented Rationing and/or Restrictions for Drugs in Short Supply Source: AHA analysis of survey data from 820 non-federal, short-term acute care hospitals collected in June of 2011.

Three of 4 hospitals report that they rarely or never receive advance notice of drug shortages… Percent of Hospitals Reporting They Receive Advance Notice of Drug Shortages from Drug Manufacturers, Wholesalers, Distributors, Group Purchasing Organizations or the FDA Source: AHA analysis of survey data from 820 non-federal, short-term acute care hospitals collected in June of 2011.

…and are often not informed of the cause or the expected duration of the shortage. Percent of Hospitals Reporting They Are Informed of the Cause of the Drug Shortage Percent of Hospitals Reporting They Are Informed of the Expected Duration of the Drug Shortage Source: AHA analysis of survey data from 820 non-federal, short-term acute care hospitals collected in June of 2011.

Why Shortages, Why Now? Many Theories, and…it’s Complicated

Causes of shortages 54% (as of 12-2010 Quality problems GMP requirements for complex process, numerous risk points, strict quality control Scientific advances in quality tests Recalls initiated by firm Business decisions Discontinuation Closing of sites Market consolidations – limited sources of drug Upgrade of facilities Problems with raw materials or API Hoarding or stockpiling 54% (as of 12-2010 Source: FDA Drug Shortages Program

Supply Chain/Manufacturing Problems Single source API or raw materials Foreign sites major source of raw material Few manufacturers of sterile injections Industry consolidation Same production lines for multiple items Tighter inventories = less backup Major plant closings in 2009 1 year is not enough time to establish a new source.

Economic Issues Increased demand Pricing issues Move to other—more favorable—product line Recalls Cost of plant improvements vs. profitability Regional issues Gray market Hoarding Unfavorable contract arrangements MMA / ASP+6 Role of other entities in the supply chain: wholesalers, distributors, GPOs? A combination of contract arrangements or constraints, downward pressure on prices, shifting demand and overall economic pressures can create a “tipping point” below which it is no longer feasible for a company to continue producing the drug. If a company is in a tenuous position relative to a particular drug—and a quality issue surfaces—the cost of correcting that problem may outweigh any benefit the company will derive from doing so. That may be cause to shift production lines to a more lucrative product. This very complicated environment has also given rise to the so-called “gray market” in which shortage drugs—which may have been hoarded in anticipation of problems—are offered at substantial mark-ups. In some cases, these markups have been in the neighborhood of 1000%. There are competing theories about which of the economic forces—and to what extent—are the culprit, which is why the solution is evasive.

Potential Remedies Early notification of potential problems Economic incentives Alternative sources of shortage drug Clinical guidance on alternatives Legislation