Most health care organizations are not immune to drug shortages. In fact, 90% of hospitals say they’ve experienced at least one shortage in the past six months that affected patient safety, and 99% said a shortage forced them to purchase a more expensive alternative.1

To help your hospital or health system mitigate these outcomes, it is important to understand not only the underlying causes of drug shortages but also the proactive measures you can take and resources available to help you.

Drug Shortages on the Rise

The U.S. Government Accountability Office reports that the total number of active shortages, including both new and ongoing shortages from the prior year, has increased since 2007.2 According to a study on drug shortages, more than 80% of drugs in short supply are generics. Of those, 80% are injectables that treat cancer, cardiovascular disease, infection, central nervous system conditions and pain.3

Underlying Causes

Determining the causes of drug shortages is difficult. In fact, the reason for nearly half of all shortages reported in 2013 was unknown. When shortages can be explained, they often fall into these categories: manufacturing problems (25%), supply and demand issues (17%) and raw material problems (2%).4

  • Manufacturing problems. More than half of the drugs on the shortage lists are manufactured by just one or two companies. This means there is little cushion when a production or quality problem develops during the complex manufacturing process.5

  • Supply and demand issues. Demand for drugs can be challenging to predict. For example, an unexpected spike in flu cases in January 2014 caused a shortage in IV saline solution.6 Because manufacturers typically run production lines at maximum capacity, it is difficult to quickly switch production schedules and stem a shortage of just-in-time products.

  • Raw material problems. Of the active ingredients used by drug manufacturers, 80% originate outside of the United States, and 40% of the finished drugs that Americans take are manufactured overseas.7 When there is an issue with quality control or a raw materials shortage, the repercussions are felt far and wide. The pharmaceutical industry truly is a global business, and its players are interconnected and dependent on one another.

What’s Being Done?

The Food and Drug Administration (FDA) has implemented several initiatives, including the FDA Safety and Innovation Act and Strategic Plan for Preventing and Mitigating Drug Shortages, to help reduce drug shortages over the long term. According to the FDA, these efforts helped prevent 170 new shortages in 2013.8 In addition, the pharmaceutical industry has launched its own initiatives to better prevent and forecast shortages.

How Can Your Hospital or Health System Better Manage Shortages?

Receiving and communicating accurate and complete information is critical to managing a drug shortage. According to the Institute for Safe Medication Practices, more than 80% of health care practitioners surveyed said there is a lack of advance warning and information about the duration and/or cause of a drug shortage. To help your hospital better prepare for a drug shortage, consider the following best practices:

Have a plan. The director of pharmacy should consider developing a plan for managing drug shortages. According to the American Society of Health-System Pharmacists (ASHP), the plan should include three phases: assessment, preparation and contingency.9 It should outline responsibilities, communications and decision making during each phase. Additionally, hospitals should identify a point person who takes the lead in implementation, coordination and monitoring during a shortage.

Implement structured communications. Next, understand how your distributor communicates drug shortages. For example, that information may be available through reports and messages in your online ordering platform. If you are uncertain, your account representative should be able to help. After arming yourself with the right information, the next step is to provide timely communications to your team about potential shortages so they can act quickly to manage the risk to your organization and patients.

Ask the right questions. If a manufacturer has a limited supply of a drug, it may not be able to support a high-volume order from a distributor. As a result, you may not receive the product. To learn about the status of a particular drug, consider contacting the manufacturer directly and asking the following questions:

  • Are you shipping your purchase orders to my distributor in full?
  • Are any shipments delayed?
  • Are you reducing shipment quantities to my distributor?
  • If you have a limited supply, can you ship drugs directly to my facility?

Don’t feed the gray market. Purchasing products from unofficial supply channels not only puts your patients at risk, as products may be contaminated and stored improperly, but it perpetuates the problem by keeping gray market wholesalers in business.

Keep it balanced. Having the right amount of inventory is a true balancing act. Keeping inventory too lean can cause issues, but stockpiling a formerly scarce product once it becomes available is not a good practice either. Talk to your distributor about inventory optimization technologies and programs that can help you find the right solution for your needs.

Additional Resources

ASHP has a host of information to help your hospital or health system effectively respond to and manage drug shortages. Other resources that you may find helpful include:

In conclusion, drug shortages are a complex, global issue. To better equip your hospital or health system, consider the resources that you currently have at your disposal, including your pharmacy and supply chain leadership, your distribution partner and industry associations. They can help you find accurate and timely information on drug shortages to ensure that your actions are as effective as possible.

* The information provided here is for reference only and does not constitute legal advice. We make no representations with regard to the content’s comprehensiveness. You are solely responsible for investigating and complying with all applicable laws that govern the operation of your business.

1 Drug Shortages 2014: A Premier Healthcare Alliance Update, Premier, February 2014
2 Drug Shortages: Public Health Threat Continues, Despite Efforts to Help Ensure Product Availability, U.S. Government Accountability Office, Feb. 10, 2014
3 IMS Study Reveals Drug Shortages in U.S. Disruptive Yet Narrowly Concentrated, IMS Institute for Healthcare Informatics, Nov. 14, 2011
4 National Drug Shortages Annual New Shortages by Year January 2001 to December 31, 2014, University of Utah Drug Information Service, Accessed Feb. 1, 2015
5 IMS Study Reveals Drug Shortages in U.S. Disruptive Yet Narrowly Concentrated, IMS Institute for Healthcare Informatics, Nov. 14, 2011
6 Growing IV Saline Shortage Has Providers Scrambling During Bad Flu Season, Modern Healthcare, Jan. 23, 2014
7 Global Initiative, U.S. Food and Drug Administration, Accessed Feb. 1, 2015
8 Examining Drug Shortages and Recent Efforts to Address Them, U.S. Food and Drug Administration, Feb. 10, 2014
9 ASHP Guidelines on Managing Drug Product Shortages in Hospitals and Health Systems, American Society of Health-System Pharmacists, Aug. 1, 2009