Drug Shortages Continue to Pose Patient Safety Risks and Challenge Providers, According to Premier, Inc. Survey

Analysis Finds Shortages Increased U.S. Hospital Costs by an Average of $230 Million Annually

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| Source: Premier, Inc.

CHARLOTTE, N.C., Feb. 27, 2014 (GLOBE NEWSWIRE) -- Drug shortages continue to challenge providers to properly care for patients while increasing America's healthcare costs, according to an updated Premier, Inc. (Nasdaq:PINC) survey.

Among survey respondents, approximately 90 percent experienced at least one shortage in the last six months that may have caused a medication safety issue or error in patient care. This is comparable to results from a similar survey Premier conducted at the height of the drug shortage crisis in 2010. The current survey of 124 pharmacy experts, conducted over a five-week period in December 2013 and January 2014, provides a fresh look at the prevalence of drug shortages.

"Although recent reports show that new drug shortages have decreased, longer-standing, ongoing drug shortages remain an issue," said Michael J. Alkire, Premier chief operating officer. "The supply chain is also vulnerable to shortage 'spikes' that significantly disrupt patient care and hospital operations. To remedy these types of shortages, including one currently affecting the supply of intravenous solutions, we need a 'swat team' mentality by all, including the FDA, the manufacturers, the distribution channel, the GPOs and the hospitals. FDA in particular plays a critical role given their role in approving the availability of additional drug supplies."

An additional Premier analysis shows U.S. hospitals forced to purchase more expensive generic substitutes for shortage drugs incurred additional costs averaging about $229.7 million annually from 2011 to 2013. The total economic impact is likely much higher since the figure excludes drugs purchased from off-contract distributors, more expensive purchases of therapeutic alternatives and indirect costs such as added labor.

According to the survey, the most often cited shortage drugs affecting patient safety and costs were:

  • Electrolytes, intravenous (IV) fluids and parenteral nutrition solutions, which provide patients unable to take oral fluids or food with needed hydration and nutrition intravenously;
  • Cardiovascular agents used to treat heart disease and other cardiac conditions (Ex: nitroglycerin IV solution); and
  • Surgical agents used for surgery preparation/anesthesia and sedation (Ex: propofol).

However, the prevalence of shortages affecting patient care appears to be decreasing. Compared to 2010, respondents enduring fewer shortages (one-to-five) increased by 30 percent during this period, while those experiencing six or more occurrences decreased 26 percent. In addition, 35 percent of respondents did not experience a shortage that could have delayed or cancelled care, a two-fold improvement from 2010 results. Respondents enduring six or more occurrences decreased 46 percent from 2010.

"When drug shortages occur, they can be very stressful for healthcare providers," said Matt Moss, PharmD, RPh, director of Pharmacy, Methodist Richardson Medical Center (Dallas). Moss is also Chairman of Premier's National Pharmacy Committee (NPC), which oversees the strategic direction of Premier's pharmacy program.

"Under the direction of the NPC, Premier has established a number of programs designed to alleviate some of the stress and prevent shortages," Moss said. "As a director of pharmacy in a community hospital setting, I am grateful that we have an organization like Premier to help us develop unique and innovative strategies targeting the drug shortage problem."

According to survey respondents, group purchasing organizations (GPOs) assist them with managing shortages:

  • 53 percent cited failure to supply clauses in contracts to help hospitals capture funds when shortages occur and the provider has to purchase a more expensive alternate drug.
  • 42 percent cited both advocating for legislative changes encouraging the FDA to respond to drug shortages, and providing early notice/communication about manufacturing issues.
  • 34 percent said both adding additional manufacturers to contract portfolios, and providing information about therapeutic alternatives to shortage drugs.

Survey results also indicate providers have become more skilled at handling supply chain disruptions since 2010, implementing more effective programs to cope with ongoing shortages, including:

  • 90 percent added back-up inventory or adjusted par levels for critically important drug categories.
  • 87 percent increased communications about shortages to internal stakeholders.
  • 83 percent implemented restrictions and/or rationing for short supply drugs.

"Significant steps have been taken by providers, GPOs, the FDA, lawmakers and manufacturers to reduce the incidence of and better manage drug shortages," said David Jaspan, RPh, MBA, director of Pharmacy and Materials Management, Union Hospital of Cecil County (Elkton, Md). "These efforts are having a positive impact, but shortages continue to plague hospitals. Mitigating this problem requires ongoing urgency and commitment by all of these stakeholders."

In addition to the programs cited in the survey, Premier only contracts with generic manufacturers with a good FDA record, thereby reducing the risk of shortages. Premier works with these manufactures to provide safe alternatives, exploring private sector solutions through new agreements with a broader scope. This includes bringing new manufacturers into the generic injectable market, like Heritage Pharmaceuticals Inc.

According to Jeffrey A. Glazer, RPh, JD, Heritage president & CEO, "Heritage Pharmaceuticals Inc. is committed to robust research and development of newly genericized products, and legacy and drug shortage products. We have been seeking guidance from our hospital customers and the FDA on development, registration and supply of critical drug shortage products. With their knowledge of industry issues and access to a national network of health systems, GPOs such as Premier are important to bridging the gap between the FDA and providers as we partner to prevent drug shortages."

About Premier, Inc.

Premier, Inc. (Nasdaq:PINC) is a leading healthcare improvement company, uniting an alliance of more than 2,900 U.S. hospitals and nearly 100,000 other providers to transform healthcare. With integrated data and analytics, collaboratives, supply chain solutions, and advisory and other services, Premier enables better care and outcomes at a lower cost. Premier, a Malcolm Baldrige National Quality Award recipient, plays a critical role in the rapidly evolving healthcare industry, collaborating with members to co-develop long-term innovations that reinvent and improve the way care is delivered to patients nationwide. Headquartered in Charlotte, N.C., Premier is passionate about transforming American healthcare. Please visit Premier's news and investor sites on www.premierinc.com; as well as Twitter, Facebook, LinkedIn, YouTube, Instagram, Foursquare and Premier's blog for more information about the company.

Alven Weil, Premier, Inc.;
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