Hospital costs associated with drug shortages continue to rise


As the drug shortages in hospitals continue, so do the costs associated with them.

Hospitals spent $229.7 million a year between 2011 and last year on costs related to the drug shorage, according to Premier, Inc. That's up from the $200 million annual cost it estimated in 2010. The reason for the increase is because organizations rely on the so-called "brown market," secondary providers of drugs that may charge more than the primary markets, according to MarketWatch.

Approximately 90 percent of the nation's hospitals experienced a drug shortage in the last six months and drug shortages are up nearly 300 percent from 2007, according to the Government Accountability Office (GAO), FierceHealthcare previously reported. The GAO linked the problem to manufacturer quality problems, which forced them to stop or slow manufacturing. It also blamed the Food and Drug Administration (FDA) for antiquated monitoring systems of drug manufacturers

Product Spotlight

Top-Rated Mobile App for Health Insurance Members

Zipari’s Mobile App is the smarter, easier, and better way for payers to engage members on the go and directly in the palm of their hands. Members can find the right doctors, receive notifications, send messages, view claims, track spending, talk to a nurse, download ID card, and more. It’s ready to install and launch in a few months.

However, Premier's data suggests a slight decrease in the overall shortages. Hospitals that experiencd shortages of six or more drugs in the last six months declined by 26 percent compared to 2010. However, facilities that experienced shortages of five or fewer drugs in the last six months increased by 30 percent compared to 2010.

Hospitals typically are short on the electrolytes used in intravenous fluids; cardiovascular agents; and surgical anesthesia and sedation drugs, according to the report. 

"Although recent reports show that new drug shortages have decreased, longer-standing, ongoing drug shortages remain an issue," Michael J. Alkire, Premier's chief operating officer, said in a statement. "The supply chain is also vulnerable to shortage 'spikes' that significantly disrupt patient care and hospital operations." Alkire suggested that the FDA, drug manufacturers and group purchasers collaborate to try and ease the overall shortage.

In many cases hospitals take their own measures to combat the shortages. Ninety percent added backup inventory, according to Premier, and 83 percent restrict and ration drugs that are in short supply.

To learn more:
- read the MarketWatch article
- here's the Premier announcement and study (.pdf)

Suggested Articles

Federal health officials released a proposed rule late Monday for 2021 Medicare payment rates and changes to the Merit-based Incentive Payment System.

President Donald Trump issued an executive order Monday to support healthcare in rural areas by permanently expanding telehealth services.

Tenet generated $88 million in profits in the second quarter thanks in part to more than $850 million in aid from a federal provider relief fund.