It's no secret that healthcare is experiencing one of the most severe drug shortages in recorded history. A number of organizations, including the American Hospital Association, American Society of Health-System Pharmacists, University of Michigan Health System and Premier healthcare alliance, all found that the vast majority of hospitals are experiencing life-threatening shortages of certain medicines.
Shortages are getting so severe that, according to the University of Utah, approximately 360 drugs will be unavailable by the end of the year, the highest number in history. These medicines are essential to patient care, and include those used in chemotherapy, sedation drugs needed to conduct surgeries and drugs needed to provide emergency treatments to heart attack patients.
The gray market
We might hope that in this time of crisis, people would band together and do everything they could to help hospitals get the drugs they need, when they need them. Instead, some price gougers are taking advantage of this shortage and using it as an opportunity to enrich themselves, at patients' expense.
Price gougers often obtain shortage medicines from quasi-legal sources, called "gray" markets. Also known as a parallel market, the gray market is a supply channel that is unofficial, unauthorized or unintended by the original manufacturer. In markets where the products are scarce or in short supply, gray markets may evolve to sell the item at any price the market will bear.
Often, in a shortage situation, gray-market vendors offer to sell shortage products, typically at exorbitant prices. Capitalizing on the desperation of pharmacy directors and buyers who are finding it increasingly difficult to secure a sufficient supply of the drugs needed to meet all of their patient care needs, these profiteers may be the only available source of supply.
How to ensure safe, reliable purchases
In an effort to provide hospitals and health systems nationwide with guidance, Premier developed the following series of actions should be taken to ensure a safe, reliable purchase. Following these best practices should help hospital pharmacies avoid the gray market and conduct business with legitimate, licensed suppliers only.
1. Understand risks. Fully understand the risks that the gray market can pose to your patients and the facility, including the possibility that supplied drugs may be counterfeit, stolen, diverted, mishandled and/or adulterated. Engage with your legal and risk management departments locally to better comprehend the differences between a legal and an illegal operation.
2. Develop and communicate a policy for purchasing decisions. Develop a policy for how your pharmacy department will decide which distributors and suppliers to do business with. Communicate the policy and process for any exceptions to administration, medical staff, nursing, pharmacy staff, purchasing department, etc.
3. Consider and document exceptions to policy. Carefully consider and document exceptions that may be allowed to your existing policy, such as emergency loans from other hospitals or purchases from sources outside of normal suppliers/distributors.
4. Confirm wholesaler, distributor and supplier licensure with authorities. At a minimum, supplies should only be purchased after pharmacists confirm with the State Board of Pharmacy or Department of Health that the distributor is appropriately licensed as a wholesale distributor of pharmaceuticals. The drug's manufacturer also will be able to verify whether the distributor is an authorized distributor of record (ADR). Purchases from non-ADRs should be subject to additional scrutiny, such as verification from the NABP website that the distributor is VAWD accredited.
5. Confirm receipt of drug pedigree with all appropriate information. Confirm that any non-ADR will provide a pedigree (hard copy or electronic) prior to or upon purchase, and that each of its listed transactions are bona-fide and can be authenticated and tracked back to the manufacturer's approved distributor of record.
6. Keep records of suspect organizations. Keep records of any vendors you have refused to do business with and reasons for those decisions to provide pharmacy staff with a resource to check prior to making purchases.
7. Compare and scrutinize purchases. Don't use drug if there are concerns. Whenever a purchase is made from a new supplier, compare and scrutinize the package, label (font, color, size) and contents. If the product label appears to have been altered, doesn't appear consistent with earlier purchases, has residue left near the label and/or content appears to be different, question its authenticity. Also, listen to patients who often can detect similar abnormalities.
8. Consider reporting any suspect suppliers to all appropriate authorities/organizations. Consider reporting suspect suppliers that may be trafficking in counterfeit, stolen, diverted and/or adulterated product to your State Board of Pharmacy, the FDA's MedWatch reporting site, and any applicable local, state or federal law enforcement authorities. Similarly, consider reporting any violations of state or federal pedigree laws to both the FDA and state authorities.
Mike Alkire is the chief operating officer of the Premier healthcare alliance.
4 Strategies to Manage the Drug Shortage From Dr. John Dombrowski
Pharmacists, Physicians Try to Cope With Drug Shortages
Shortages are getting so severe that, according to the University of Utah, approximately 360 drugs will be unavailable by the end of the year, the highest number in history. These medicines are essential to patient care, and include those used in chemotherapy, sedation drugs needed to conduct surgeries and drugs needed to provide emergency treatments to heart attack patients.
The gray market
We might hope that in this time of crisis, people would band together and do everything they could to help hospitals get the drugs they need, when they need them. Instead, some price gougers are taking advantage of this shortage and using it as an opportunity to enrich themselves, at patients' expense.
Price gougers often obtain shortage medicines from quasi-legal sources, called "gray" markets. Also known as a parallel market, the gray market is a supply channel that is unofficial, unauthorized or unintended by the original manufacturer. In markets where the products are scarce or in short supply, gray markets may evolve to sell the item at any price the market will bear.
Often, in a shortage situation, gray-market vendors offer to sell shortage products, typically at exorbitant prices. Capitalizing on the desperation of pharmacy directors and buyers who are finding it increasingly difficult to secure a sufficient supply of the drugs needed to meet all of their patient care needs, these profiteers may be the only available source of supply.
How to ensure safe, reliable purchases
In an effort to provide hospitals and health systems nationwide with guidance, Premier developed the following series of actions should be taken to ensure a safe, reliable purchase. Following these best practices should help hospital pharmacies avoid the gray market and conduct business with legitimate, licensed suppliers only.
1. Understand risks. Fully understand the risks that the gray market can pose to your patients and the facility, including the possibility that supplied drugs may be counterfeit, stolen, diverted, mishandled and/or adulterated. Engage with your legal and risk management departments locally to better comprehend the differences between a legal and an illegal operation.
2. Develop and communicate a policy for purchasing decisions. Develop a policy for how your pharmacy department will decide which distributors and suppliers to do business with. Communicate the policy and process for any exceptions to administration, medical staff, nursing, pharmacy staff, purchasing department, etc.
3. Consider and document exceptions to policy. Carefully consider and document exceptions that may be allowed to your existing policy, such as emergency loans from other hospitals or purchases from sources outside of normal suppliers/distributors.
4. Confirm wholesaler, distributor and supplier licensure with authorities. At a minimum, supplies should only be purchased after pharmacists confirm with the State Board of Pharmacy or Department of Health that the distributor is appropriately licensed as a wholesale distributor of pharmaceuticals. The drug's manufacturer also will be able to verify whether the distributor is an authorized distributor of record (ADR). Purchases from non-ADRs should be subject to additional scrutiny, such as verification from the NABP website that the distributor is VAWD accredited.
5. Confirm receipt of drug pedigree with all appropriate information. Confirm that any non-ADR will provide a pedigree (hard copy or electronic) prior to or upon purchase, and that each of its listed transactions are bona-fide and can be authenticated and tracked back to the manufacturer's approved distributor of record.
6. Keep records of suspect organizations. Keep records of any vendors you have refused to do business with and reasons for those decisions to provide pharmacy staff with a resource to check prior to making purchases.
7. Compare and scrutinize purchases. Don't use drug if there are concerns. Whenever a purchase is made from a new supplier, compare and scrutinize the package, label (font, color, size) and contents. If the product label appears to have been altered, doesn't appear consistent with earlier purchases, has residue left near the label and/or content appears to be different, question its authenticity. Also, listen to patients who often can detect similar abnormalities.
8. Consider reporting any suspect suppliers to all appropriate authorities/organizations. Consider reporting suspect suppliers that may be trafficking in counterfeit, stolen, diverted and/or adulterated product to your State Board of Pharmacy, the FDA's MedWatch reporting site, and any applicable local, state or federal law enforcement authorities. Similarly, consider reporting any violations of state or federal pedigree laws to both the FDA and state authorities.
Mike Alkire is the chief operating officer of the Premier healthcare alliance.
Related Articles on Drug Shortages:
52% of Hospitals, Pharmacists Buy Drugs From "Gray Market"4 Strategies to Manage the Drug Shortage From Dr. John Dombrowski
Pharmacists, Physicians Try to Cope With Drug Shortages