Critical
prescription drug shortages continue to plague American hospitals and
jeopardize patient access to many essential medicines. Although drug shortages
are a complex problem without an overnight fix, healthcare group purchasing
organizations (GPOs) are committed to working with our supply chain partners to
help mitigate this public health crisis.
HSCA has launched the website GPOs Fighting Drug
Shortages (www.drugshortage.org)to
serve as a clearinghouse of information on the steps GPOs are taking to
mitigate the drug shortage crisis.
GPOs are currently working collaboratively with hospitals,
manufacturers, distributors, the Department of Health and Human Services (HHS)
and the Food and Drug Administration (FDA) to ensure that hospitals and
patients have access to the life-saving drugs they need.
As an industry, GPOs are already taking a variety of
innovative steps to reduce the impact of generic drug shortages, including:
✓Voluntary
Contracting: All GPO purchasing contracts are voluntary, meaning that
hospitals are free to purchase through their GPOs, but can also purchase “off
contract” outside of the GPO arrangement, and frequently do.
✓Price Adjustments:
GPO contracts are the product of competitive market negotiations. Contract
pricing is a constantly moving target, and drug companies regularly adjust
pricing of GPO contracts based on market conditions such as manufacturing
capacity, raw material availability, and competitive suppliers. That means that
when manufacturers experience shocks to production, such as a higher input
price, they have the ability to change the contracts quickly to reflect these
shocks. GPOs manage thousands of price changes annually.
✓Migration to
Alternative Products: In addition to delivering cost savings, GPOs are
the sourcing partners to hospitals and, where possible, work with hospitals and
health care providers to ensure prompt and safe migration to alternative
products when shortages arise.
✓Data-Tracking:
GPOs track data on drug shortages, strategize with members when there is the
potential for supply chain disruption, and communicate with manufacturers and
distributors to help foresee future problems.
✓Manufacturer Evaluation:
GPOs help members lessen their exposure to drug shortages by evaluating
manufacturer reliability when sourcing and awarding contracts, and in helping
providers establish best-practice purchasing procedures.
✓Increased Suppler-Provider
Communication: GPOs work with our supplier partners to communicate
product demand from our provider members. By communicating this information to
manufacturers in a timely fashion, manufacturers should have more advance
notice about demand to assist in planning for production capacity.
The FDA and industry have identified numerous root causes of
drug shortages, including manufacturer problems, quality issues and barriers to
getting new suppliers on line when supply is disrupted. GPOs are committed to
being part of the solution. GPOs do not manufacture, compound, sell, or take
title to any drugs, including those in shortage, but our industry has every
incentive to ensure that patients get the medications they need when they need
them. If there is no product, there is no role for the GPO.
The GPO industry supports recent regulatory, legislative and
private sector activities aimed at solving the drug shortage crisis. As an
industry, we are committed to mitigating this public health crisis.
To learn more about how GPOs are working vigorously with
hospitals, manufacturers and distributors to identify potential shortages and
to help maintain a safe and reliable supply of products for patients and their
families visit www.drugshortage.org.
