Radha Rohatgi PharmD, BCOP, Devona Williams, PharmD, BCOP, Tim Harrison CPhT

In recent years, dealing with drug shortages has become an integral part of a pharmacists work. [1] Drug shortages can range from basic parental electrolytes and antibiotics to life saving chemotherapy. Unfortunately dealing with chemotherapy drug shortages is more of a challenge; often times there is no alternative therapy for the patient, making the ability to procure the drug equivalent to the ability to treat the patient. In the past, it was not unusual for the pharmacy to be turned into a call center at such times. [2] While it is still time-consuming, it is no longer necessary to call fifteen pharmacies to find a medication in short supply; we have developed systems to manage shortages that increase reliability, efficiency, and safety. [1] Nowadays, dealing with drug shortages is part of daily practice and most institutions have weekly meetings devoted to drug shortages.

Procuring Drugs for Patients

On a regular basis, pharmacists check online lists for all current drug shortages, which are distributed and maintained by ASHP. Hospitals generally obtain the drugs they need from wholesalers, of which three companies dominate the market, Cardinal Health, McKesson Corp., and AmerisourceBergen, which account for 85% to 90% of the distributor market [3] We check with our wholesalers inventory weekly, and of course, our in-house stock daily. Reconciling these inventories allows us to plan for our patient’s pharmacotherapy needs. The process involves determining from providers what course of treatment each patient needs, and at what time, and ensuring we will have the product available when needed. Once all this information is known, we sequester the medication for each specific patient.

Sequestering ensures that for each specific  patient, the necessary doses for the course of treatment will be available. For Erwinia, for example, that means 6 doses; it is better not to give it at all than to only give, say 4 doses, so the medication for the entire treatment course must be assured ahead of the start of therapy. This means that the total in-house inventory of a drug at any given time is not necessarily indicative of what is available to treat newly diagnosed patients; much of the product may be sequestered for existing patients.

In addition to what is sequestered, we run usage reports to determine how much of each given drug we need to keep on the shelves (‘PAR’) to manage the influx of newly diagnosed patients,. The PAR is based on our past usage of each product, and reputable wholesalers track the purchase history of each given hospital. Information about upcoming shortages might prompt purchasers to “stock up,” so the purchaser’s purchase history is used by reputable wholesalers to limit future purchases. If an order is much larger, we have to explain why we need the additional products. Many times, we have to email the drug company directly with new patient starts, to ensure drug delivery. However, not all wholesalers use such a process, making it possible for unscrupulous buyers to stock up when shortages are expected.

Despite this system, shortages persist, causing frustration, worry, and sometimes, outright fear– among patients and health care providers alike. The reconciliation of what our wholesalers have in stock, what we have on the shelves, and what manufacturers report they will be supplying appears deceptively quantifiable; with those quantities known, it would seem possible to determine precisely what a hospital will have available for patients at any given time. However, in practice it is not so simple. To understand why this is so, it is necessary to look more closely at the supply chain from manufacturer to end-user, a process that introduces its own potential liabilities. It is these elements that can contribute to, or exacerbate shortages, and thus are ethically noteworthy in any discussion about the ethics of drug shortages and their management.

If a particular drug is not available from our wholesaler, our procedure is to go directly to manufacturer and call their medical science representative or drug sales representative. We work to maintain good relationships with manufacturers for just this eventuality. However, if a manufacturer says, “we will be delivering x product on February 1st,” a number of other factors must be considered to ensure our providers can administer the drug they need when the patients need it. For example, as of this writing, Erwinia is currently in short supply, and while we have a lot of contact with the drug representative, and spoke daily with medical science liaison when the shortage was announced, it is produced by only one manufacturer whose manufacturing facilities are abroad. Erwinia has to go through a vetting process and clearance through customs, a process that can take weeks. So, we can be told a drug will be available on February 1st by the manufacturer, but we may not be able to actually take possession of the product until March 1st. Even estimated arrival dates based on the vetting and customs processes are not hard and fast; February 1st can turn into February 14th; that can result in the delay of a treatment cycle that can have clinical effects on our patients.

Sometimes we have to have two different concentrations of the same medication. For Cytaribine, the national standard is 20 mg/ml, but everyone needs it; so now we can only get 100 mg/ ml. Errors can be introduced into the process when different concentrations must be converted, or an alternate may have a similar name, but require different dosing. In such situations, we send out multiple emails and retrain staff. However, when trying to get whatever is available, iatrogenesis can occur; harm may be caused to the patient by the medical treatment intended to help them. In this setting, there can be transcription errors or dosing errors, arising from working with different concentrations, or failing to follow alternative preparations that may be required. [4]

Financial Factors

Unfortunately, profit is made from drugs that treat breast, colon, and kidney cancer; the quantities of medication needed to treat children with cancer are only a small percentage of those. [5] As a result, the focus on pediatric cancer needs is less than those of us working in pediatrics would like. If a drug is dual use, i.e., it can be used to treat adults as well as kids, there is less likely to be a shortage, but for a drug like Cytaribine, for example, for which there is no alternative, a shortage presents a scary proposition because the incentive to produce it in the first place is marginalized by higher-profit products.

That is not to say there is no profit to be made in such medications. The wholesale system in the United States has been described as the “weak link,” in the drug distribution chain [6], but within that framework the shortages of drugs have created a pocket industry of speculators, the so-called “gray market.” The gray market is comprised of “alternative wholesalers” who track drug usage and production so as to determine what will be in short supply [7]

Not all alternative wholesalers are bad actors, and in fact, hospitals need alternative wholesalers who maintain the pedigree of their products. The pedigree of a drug confirms it has never left the custody of reputable wholesalers who operate within the mandate of the industry’s best practices. Wholesalers may join the National Association of Boards of Pharmacy (NABP), which investigates members’ operations; the organization goes out to their facilities, performs inspections, and ensures their drugs have never gone outside the wholesale chain. Visual inspection is necessary, as the NABP reports,

“Even with pedigree requirements in place, suspect wholesale distributors have found ways around the system by falsifying their drug pedigrees.” [8]

The supply chain can be thought of as akin to evidence collected by the police; there is a chain of custody, with each step accounted for. This ensures the drugs sent from the manufacturer stay within the wholesale chain, at least in theory; there are bad actors in the gray market, purchasing drugs to resell at higher prices, and the distinction between primary and secondary wholesalers is not always clear cut; sometimes primary wholesalers end up buying products from secondary wholesalers. [9]

Drug production is a long process; it is often projected six months or more in advance by manufacturers. [10] Knowing this presents opportunity in the minds of bad actors; when a shortage occurs, even if the manufacturer responds quickly, it will be months before more product is available. In the meantime, many patients can’t possibly wait 6 months, or more, to be treated, and will turn to the grey market. As discussed in What Lies Beneath (in this issue) demand for medicine is inelastic to price; unlike a watch, a new car, or other consumer purchase, if a patient needs a medication, they simply need it, and thus in most situations, will not turn away because of cost. In pediatrics, this is especially so; parents will pay whatever they have to in order to ensure their children are cared for.

Abuses

The process of the bad actors works as follows. The wholesalers make speculative purchases based on their research, buying up product that they anticipate will have more demand than supply. When we do obtain drugs from the gray market, it is always at a significant price increase. [7]  Some sources cite price increases of several thousand percent. [11][12] This is the reason that reputable wholesalers use a purchaser’s traditional purchasing history to limit purchases, and the reason that the ASHP site administrators don’t even announce a shortage that is less than 30 days old; doing so would provide the gray market bad actors with the information they seek.

Some gray market players are knowingly buying up drugs they shouldn’t have been. A home infusion company could buy from a Cardinal, walk across their loading dock to their “sister” company, and resell the drug. However, that resold drug would not have the pedigree we require at Children’s National; we do not buy from sources that don’t have a record of responsible transactions, and if the drug ended up here, we would send it back. However, in situations where life-saving medications are in short supply, the market is fertile for abuse; as demand increases, or is not met, people become desperate. What could cause more desperation than not being able to obtain a life-saving drug for one’s child? Even counterfeit drugs have become a significant problem, particularly for those who cannot afford the pedigreed versions. [13]

Speculating pulls excess out of the supply, through wholesalers who do not use a “dynamic allocation” process to check users purchase history. [14] This is where we see what we refer to as “leakage.” Even if it is only a 5-10% leak out into the gray market, that’s 5-10% we don’t have access to at less than ransom prices. If viewed in utilitarian terms of costs and benefits, weighing the benefit to the wholesaler bad actor versus the cost to the child who needs Erwinia, how could that calculation possibly not come out in the child’s favor? The enrichment of an individual or group cannot weigh more heavily than the life of another. Even if one argues that the individual or group uses the money they make on such transactions to care for their own families, there are alternatives to engaging in drug shortage speculation; there aren’t alternatives for the children, or adults, who are harmed by not having access to these drugs. However, a more powerful argument can be found in a principled assessment of this behavior. These bad actors are gaming the system to the detriment of all, as we have shown. There are other significant hurdles for a  pharmacy to tackle to obtain the drugs that physicians and patients rely on. The parasitic drag introduced by speculators creates uncertainty in a system which society must be able to rely on as a whole, and which any individual may come to rely on through chance or accident. It is therefore in both the individual’s and the public interest to close the loopholes currently being exploited.

The Drug Supply Chain Security Act, also known as ‘Track and Trace’ is a law passed as part of the Drug Quality and Security Act in 2013. Over time it puts in place mandates for manufacturers to have sequential lot numbers that can be used to track drugs to end users at all points in the supply chain. The law goes into full effect in 2020, and may help resolve some of these issues. However, a manufacturer who finds they’ve only sold 50 of some product is not going to suddenly make excess which they know will not sell. It doesn’t make good business sense to do so. Yet, this is what needs to happen from a healthcare point of view; we need the excess to ensure we have enough of these drugs to treat each patient diagnosed. The alternative to having excess, unsold drug is having untreated patients for whom no drug is available. Closing the speculative loopholes is a step in the right direction, but the fundamental issues of commerce versus compassion remains unresolved.

The authors have disclosed no conflicts of interest.

Affiliations

Radha Rohatgi PharmD, BCOP
Hematology/Oncology Clinical Specialist
Department of Pharmacy

Devona Williams, PharmD, BCOP
Clinical Specialist Stem Cell Transplant
Department of Pharmacy

Tim Harrison CPhT
Pharmacy Purchasing Coordinator

Correspondence

Radha Rohatgi PharmD, BCOP
Hematology/Oncology Clinical Specialist
Department of Pharmacy
Children’s National Health System
111 Michigan Ave NW Washington DC 20010
rrohatgi@childrensnational.org

Endnotes

1. Erickson Amy K. Drug shortages: Hospital pharmacists work magic behind the scenes. Pharmacy Today. May 2016:22(5):6-7.

2. Wechsler J. Drug Shortage Crisis Plagues Pharmacists. Drug Topics. 15 March 2012. http://drugtopics.modernmedicine.com/ drug-topics/news/modernmedicine/modern-medicine-feature- articles/drug-shortage-crisis-plagues-pharma?page=full Accessed 5.9.17.

3. 2015 MDM Market Leaders: Top Pharmaceuticals Distributors. MDM Competitive Intelligence for Wholesale Distribution. 2017. https://www.mdm.com/2015-top-pharmaceuticals-distributors. Accessed 3.6.17.

4. Gokhul A, Jeena PM, Gray A. Iatrogenic medication errors in a paediatric intensive care unit in Durban South Africa. S Afr Med J.2016 Dec 1; 106(12): 1222-1229.

5. Scudellari Megan. Children’s Cancer is Unprofitable and ignored.Newsweek. 20 July 2015. http://www.newsweek.com/2015/07/31/childrens-cancer-unprofitable-and-ignored-355135.html Accessed 5.9.17.

6. Weaknesses in the Drug Distribution Chain (Ch. 5). Committee on Understanding the Global Public Health Implications of Substandard,Falsified, and Counterfeit Medical Products; Board on Global Health; Institute of Medicine; Buckley GJ, Gostin LO, editors. Washington(DC): National Academies Press (US); 2013 May 20.

7. Barlas S. ‘Gray market’ Not Such a Gray Area Anymore: WhyHospitals Are Paying Exorbitant Drug Prices. PT. 2012 Oct; 37(10): 544. http://pubmedcentralcanada.ca/pmcc/articles/PMC3474443/.

8. Wholesale Drug Distribution: Protecting the Integrity of thenation’s Prescription Drug Supply. National Association of Boardsof Pharmacy. August 2013;1-11. https://nabp.pharmacy/wp-content/ uploads/2016/07/Wholesale-Drug-Distribution-08-2013.pdf. Accessed 3.6.17.

9. Ziance R. Roles for pharmacy in combatting counterfeit drugs.Journal of the American Pharmacists Association. 2008;48(4):e71–e91.

10. Corr P, Williams D. The pathway from Idea to RegulatoryApproval: Examples of Drug Development. National Academy of Sciences, National Academies Press 2009. https://www.ncbi.nlm.nih.gov/books/NBK22930/ Accessed 5.9.17.

11. Top 10 Drug Markups in the Gray Market. Physician’s Weekly. 23 Aug 2011. http://www.physiciansweekly.com/top-10-drug-markups/ Accessed 5.9.17.

12. Rockefeller IV, JD, Harkin T, Cummings EE. Shining Light onthe ‘Gray Market.’ Senate Committee on Commerce, Science, andTransportation, Senate Committee on Health Education, labor,and Pensions, House Committee on Oversight and GovernmentReform. 25 July 2012. https://democrats-oversight.house.gov/sites/democrats.oversight.house.gov/files/migrated/uploads/7.25.12%20Staff%20Report%20Shining%20Light%20on%20the%20Gray%20Market.pdf. Accessed 5.9.17.

13. Redpath Shirley. Trade in Illegal Medicine Hits Pharmaceutical Sector. World Finance. Special Report 20 April 2012. http://www.worldfinance.com/special-reports/trade-in-illegal-medicine-hits-pharmaceutical-sector. Accessed 5.9.17.

14. Drug Shortages: Wholesaler’s role. The Journal of Healthcare Contracting. March 6, 2014. http://www.jhconline.com/drug-shortages-wholesalers-role.html. Accessed 3.6.17.

 

Leave a Reply