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Could Drug Shortages Hurt Diabetes Care?

David Spero

November 23, 2011

Shortages of generic drugs are changing the care of people with cancer and hypertension. What’s causing these shortages, and will they affect people with diabetes?

According to Trevor Shewfelt, pharmacist at the Dauphin Clinic Pharmacy of Manitoba, Canada, drug shortages have always been a part of the pharmacy business. But in the last six years, shortages have increased — in 2010 there were shortages of 178 drugs, and the 2011 total will be higher according to the US Food and Drug Administration (FDA).

Most, but not all of these drugs have been generic drugs for injections. Most affected are cancer drugs, but shortages have also hit staple generics like levothyroxine for thyroid problems, carbidopa-levidopa (brand name Sinemet) for Parkinson disease, phenytoin (Dilantin) for seizures, morphine sulfate for pain control, and even liquid versions of the antibiotic penicillin.

Some critics blame government pricing rules for causing the shortages. Free market advocate “DrRich” at the Covert Rationing blog blames the Medicare Modernization Act of 2003. This law “strictly limits the price Medicare will pay for ‘injectable’ generic drugs. Prices for these drugs can still rise, but only by 6% or less, and only once every six months.” DrRich says profit margins for these drugs were already low, and these new limits led many manufacturers to stop making them.

Well, “Dr.,” if a 12% price increase every year isn’t enough, you are taking greed to a new level indeed. And who’s the buyer here, anyway? Can’t Medicare decide how much they’re willing to pay? Of course, a manufacturer can refuse to sell, but then others who are willing can provide the product.

In fact, other manufacturers have taken the place of some companies who discontinued their drugs. But DrRich says these companies start from scratch, are smaller, and sell cheaper. So they have a lot more quality problems and production breakdowns than the older manufacturers, leading to shortages.

Others blame the FDA for greatly tightening regulations on drug making. According to the blog Marginal Revolution, “Inability to fully comply with [Good Manufacturing Practice regulations have resulted in] production stoppages or recalls.”

For example, a drug manufacturer must get approval for how much drug it plans to produce… If a shortage develops… a drug manufacturer cannot increase its output of that drug without another round of approvals. Nor can it alter its timetable of production (producing a shortage drug earlier than planned) without FDA approval.

The Obama administration says it will ease some of this regulatory burden. They recently instructed the FDA to speed up its review of applications from companies that want to change or ramp up production to address shortages.

However, many people blame the drug companies and physicians for most of the problem. Reporting on a piece in The New England Journal of Medicine by Thomas J. Smith, MD, and Mandy L. Gatesman, PharmD, Joe Rojas-Burke wrote in The Oregonian that “the drugs in short supply tend to be tried-and-true generic chemotherapy agents that are no longer profitable for manufacturers or oncologists.” “If a brand-name drug with a higher profit margin is available, a manufacturer may stop producing its generic,” Smith and Gatesman noted.

For instance, leucovorin, a form of folic acid used in conjunction with some chemotherapy drugs, has been available from several manufacturers since 1952. In 2008, levoleucovorin, an alternative to leucovorin, was approved by the FDA. It was reportedly no more effective than leucovorin and 58 times as expensive, but its use grew rapidly. Eight months later, a widespread shortage of leucovorin was reported.” [Italics mine]

Rojas-Burke further explained that “In 2005, Medicare began paying [oncologists] the average sales price [of chemo drugs] plus a six percent markup. The unintended consequence was to reduce demand for the more affordable generic cancer drugs.”

“The price of a vial of carboplatin fell from $125 to $3.50, making the 6% payment trivial,” note Smith and Gatesman. Oncologists started switching to higher priced brand-name drugs. “Why use paclitaxel (and receive 6% of $312) when you can use Abraxane (for 6% of $5,824)?”

Some companies seem to be exploiting shortages by buying up stocks of medicines and reselling them at hugely inflated prices. According to The Charlotte Observer,

In one case, a hospital reported a blood pressure medicine that normally sells for $25.90 being offered for $1,200… Mark-ups have been as high as 3,980 percent for chemotherapy medicines to treat leukemia…These aren’t rare examples. Hospitals nationwide report being asked to pay an average of 650 percent above normal prices for shortage items.

Drug price gouging may cost American hospitals $415 million this year, according to Mike Alkire of Premier Healthcare Alliance.

“Price gougers often obtain shortage medicines from quasi-legal sources, called ‘gray’ markets,” the Observer reports. These drugs have often been sold and resold several times, making it difficult to be sure about where they come from or how good they are.

So far, the highest-profile diabetes drug shortage has been the shutdown of Sanofi’s Apidra brand prefilled insulin pens and reusable cartridges due to issues with their plant in Germany. Not too many diabetes drugs fall into the injectable generic category yet. Insulin is never generic, which I’ll discuss next week.



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