By John Coster, RPh, PhD
President Obama’s event this week highlighted and escalated what have been bipartisan efforts to combat the proliferation of prescription drug shortages. Such efforts are welcome because, while to date these shortages primarily affect hospital pharmacies, they have also negatively impacted community pharmacists and their patients.
Food and Drug Administration (FDA) figures indicate that the number of reported prescription drug shortages has nearly tripled between 2005 and 2010, going from 61 to 178. An Executive Order signed by the President details steps that the Administration is taking to address this problem. For example, the FDA is directed to work with the Department of Justice to examine any allegations of price gouging by secondary, “gray market” wholesalers. Such claims should be referred to the FDA and investigated.
As Bonnie Frawley, a pharmacist at Brigham and Women’s Hospital in Boston, described at the White House event, these shortages have reached crisis proportions for hospitals. She recalled near-cancellations of heart surgeries and heightened health risks due to the necessary shift to unfamiliar substitute drugs.
Patients and community pharmacists have been affected as well, with the shortage of Adderall and its generic equivalents perhaps the most high-profile example. Washington, D.C. was recently reported to be virtually out of the product, with similar experiences making the news elsewhere. In New York City, independent pharmacies had marginally greater availability of the product than large chains. In southwestern Virginia, Adderall is just one of the problems, as one independent pharmacy says 10% of its daily prescriptions are out of stock by the distributor.
In addition to the obvious health concerns, the shortages have hit community pharmacies economically as well because pharmacy benefit managers (PBMs) do not update reimbursement rates to reflect changes in the market – affecting prescriptions filled commercially or through Medicare and Medicaid. That leaves the front-line pharmacies exposed to having to absorb huge swings in increasing drug costs.
One community pharmacist recently told NCPA that a PBM was requiring acceptance of reimbursement that was $30 less than the cost of the drug. Another said this shortage problem has factored in to a number of prescriptions this year on which the pharmacy lost $20 to $150 per prescription due to inadequate reimbursement.
Even as that lower reimbursement remains in place for the community pharmacy, for all we know there is nothing stopping the PBM from charging the health plan/payer based on the current market price. In other words, the cost adjustment may not be made for the pharmacy but it will be made for the payer.
On a smaller scale, this shortage situation also rekindles NCPA’s concerns about generic manufacturers and wholesalers who employ discriminatory distribution, e.g. Ranbaxy’s decision to distribute generic Valtrex (valacyclovir) only to large chain customers but not to independents.
NCPA will continue to monitor implementation of the Obama Administration’s executive order and implementation of it, as well as work with Congress on other potential legislative approaches to this complicated but critical issue. At a minimum, these cases further illustrate the need for provisions included in The Pharmacy Competition and Consumer Choice Act (S.1058/H.R.1971) relating to updating reimbursement rates for community pharmacies to reflect market changes in drug cost.