Drug Shortages: We’re in This Together

1. Drug Shortages: We’re in This Together NPPA Conference, Las Vegas, NV August, 2011

2. On Pace for Unprecedented Number of Drug Shortages in 2011National Drug Shortages (January 2001 to July 31, 2011) Note: Each column represents the # of new shortages identified during that year by University of Utah Drug Information Service

3. Contracting Strategy to Minimize Drug Shortage Impact • Stronger contract template language in 2011 requires prompt notification of supply problems to Novation • Select most reliable suppliers possible for contract awards. Past performance on supply is one factor considered in evaluating contract awards • For products with history of supply problems make multi-awards where possible • Insulate customers from having to pay more for a non-contract product by securing strong “failure to supply” reimbursement terms in contract. Over $10 million returned to members in 2010 through the Failure to Supply Reimbursement Service. • FTS reimbursement is not intended as a substitute for obtaining contract coverage on available products

4. Contracting Response if Shortage Occurs • Investigate market for alternatives and review current agreement for options • If generically equivalent product available, seek to add it to contract on a temporary basis. Prevents member from paying WAC price. • If multiple suppliers are in the market, conduct a competitive procurement to obtain best price on available supply. Efficient process allows quick decisions.

5. Helping with Information • Financial support for ASHP’s drug shortage information postings on www.ashp.org • Weekly electonic member newsletter and other communication vehicles • Marketplace web site contains many resources • Drug Shortage Information Alerts • Key supplier inventory updates provided on regular basis • Archived web conferences for playback • Sponsor/participate in venues for stakeholders to exchange information • Regional and national meetings • Ongoing participation in work groups formed at 2010 Drug Shortage Summit • Represent members in ongoing discussions with FDA and participation in upcoming CDER Drug Shortage Workshop

6. Drug Shortage Summit November 5, 2010 • Co-convened by • ASHP • American Society of Anesthesiologists • American Society of Clinical Oncology • Institute for Safe Medication Practices • Participants • FDA • CDC • Pharmaceutical suppliers • Pharmaceutical distributors • Novation and other GPOs • Other healthcare organizations

7. Drug Shortage Summit Goals • Discuss the scope and causes of drug shortages • Shed light on the harm to patients due to drug shortages • Discuss need for changes in public policy and stakeholder practices to prevent shortages • Develop plan to stop harm and patient care disruptions caused by drug shortages • Participants continue to work on above goals through conference calls

8. Our Continued Focus on Drug Shortage Issues • Web conference series related to drug shortages during Q3 • Will offer pharmacy and nursing continuing education • Incorporating noted external subject matter experts in addition to Novation staff • Contract templates changed to require better manufacturer communication on shortages • Revised non-financial weighting for future bids • Reviewing opportunities to improve/streamline communications on shortages with new Marketplace/Procure Web platform

9. Government Gets Involved

10. Government’s Efforts to Ease Drug Shortages Proposed Senate Legislation • “Preserving Access to Life-Saving Medications Act” (S.296) introduced late 2010 • Sponsors • Klobuchar (D-Minnesota) • Casey (D-Pennsylvania) • Key components • Manufacturer reporting of discontinuance (at least 6 months notice), interruption or action that may result in a shortage • Public notification by FDA through its web site • Identification of drugs vulnerable to shortage • Continuity of operations planning for vulnerable and medically necessary products • Requiures FDA to revise definition of medically necessary to include the prevalence of use of the drug • http://thomas.loc.gov/cgi-bin/bdquery/z?d112:s.296:

11. Government’s Efforts to Ease Drug Shortages Proposed House Legislation • “Preserving Access to Life-Saving Medications Act of 2011” (H.R. 2245) • Introduced June 21, 2011 • Sponsors • Rep. Diana L. DeGette (D-Colo.) • Rep. Thomas J. Rooney (R-Fla.) • Key components • Requires drug manufacturers to provide advance notice to FDA regarding manufacturing problems or when a drug product will be discontinued • Institutes civil monetary penalties for manufacturers who fail to report • Requires FDA to: • Maintain an online list of drugs in shortage situations • Implement evidence-based criteria for identifying drugs vulnerable to a shortage • Provide annual report to Congress followed by a report every five years on the actions taken to address and prevent drug shortages • Text of Bill • http://thomas.loc.gov/cgi-bin/bdquery/z?d112:h.r.2245:

12. Other Government Efforts: Drug Shortages GAO Investigation Requested • Senator Richard Blumenthal (D-Conn.), early March 2011 • GAO office requested to open an investigation to examine • Hospital shortages of pharmaceutical products and prevalence in recent years • Impact of shortages on patient care • Possible explanations • Potential legislative or administrative approaches to address the problem • Investigation is currently underway

13. What Can You Do?

14. Drug Shortages: Actions You Can Take • Report them to ASHP http://www.ashp.org/shortages, FDA or your GPO • Have a plan in place for handling shortages • ASHP Guidelines on Managing Drug Product Shortages in Hospitals and Health Systems • Keep informed • Keep all communication channels open • Explore all purchasing avenues • Cultivate good relationships with company and distributor representatives • Jump through all the hoops • Backorders, direct orders (timing) • Consider supporting legislation –ASHP’s Grassroots Action Center on www.ashp.org • Report concerns about trade practices to FTC: http://www.ftc.gov/. Use customer complaint link.

15. Questions??