Dr. Brita's Blog

How do Increased Medication Supply and Potential Price Fixing Affect Drug Shortages?

Posted by Dr. Brita Hansen on May 30, 2019 1:35:15 PM
Find me on:

May 30, 2019 – A lot has happened during the month of May related to two major issues facing healthcare today – drug shortages and the high cost of medications. On the plus side, there were announcements of more antibiotics and other generic injectable medications coming onto the market. On the flip side, we learned of serious price fixing allegations against leading drug manufacturers.

What effect will greater supply and more attention to the factors driving up drug costs have on demand and the way hospitals manage medication shortages? Read on as we take a closer look at recent developments and what they mean for hospital pharmacy and clinical teams.

Increasing supplies of key medications

We begin with good news on the supply side. First, the nonprofit generic drug company, Civica Rx, will begin manufacturing and distributing two antibiotics later this year that are important tools in the fight against drug-resistant infections. Those medications are vancomycin and daptomycin ― drugs that are often in short supply. While the drugs will be going only to hospitals in the Civica Rx network, it’s a significantly large group of more than 800 hospitals, which will help to ease the pinch for other hospitals sharing the remaining supply.

Second, a collaboration by ProvideGX and Fresenius Kabi will bring a greater supply of key injectable drugs onto the market, including thiamine, lidocaine, diphenhydramine, hydromorphone and morphine sulfate. These medications are used in acute care settings to treat patients with critical conditions. As noted in my previous blog post, Patient Safety Risks Increased by Shortages of Life-Saving Medications, shortages of critical medications pose serious patient safety risks, so this is very good news.

Both of these announcements will not only boost supply, but also are likely to bring down costs ― which points us to the next topic in the news this month.

Price fixing impact

In 44 states, attorneys general have filed a lawsuit alleging that several of the country’s largest generic drug manufacturers conspired over many years to inflate prices of more than 100 generic drugs by as much as 1,000%. No wonder drug prices continue to escalate.

The lawsuit claims to have evidence showing the generic drug industry collaborated to raise prices and protect their market share. By artificially driving up the cost of generic medications, these drug makers caused billions of dollars of harm to our national economy. The allegations come at a time when the industry already is facing significant scrutiny from lawmakers who are investigating skyrocketing drug costs.

Effects on hospital management of drug shortages

It’s a positive change to have increased supplies of key medications and shed a spotlight on drivers of escalating drug costs. However, when it comes to drug shortage management, these factors are both still outside of the control of hospital systems.

Health providers should still consider what they can do internally to ensure that the right patients are receiving the right drugs. Imagine if hospital pharmacy and clinical teams had the opportunity to fully understand ordering, administration and dispensation of medications by patient population, department, provider, hospital and health system. Those insights truly could change the game and empower health systems to better manage shortages.

Thankfully, there is a solution that provides that information in near real-time. The Drug Shortage App from LogicStream Health™ allows hospitals to mitigate the impact of shortages and manage them more efficiently when they can’t be avoided. The Drug Shortage App helps hospitals better manage drug shortages and minimize disruptions to patient care by providing pharmacy teams visibility into ordering, prescribing and dispensing practices so they can take control of medications in short supply.

Learn more about what this solution can do to help your organization by downloading an overview of The Drug Shortage App at www.thedrugshortageapp.com.


Brita Hansen, M.D., is Chief Medical Officer of LogicStream Health. She began her career as an internal medicine hospitalist physician after receiving her undergraduate degree at NYU and her Doctorate of Medicine from the University of Minnesota School of Medicine. She served as Chief Health Information Officer for the Hennepin County Medical Center before joining LogicStream Health.

Topics: Drug Shortages, Drug Prices

Subscribe to Email Updates

Improve and Control Clinical Processes

Brita Hansen, MD, is Chief Medical Officer at LogicStream Health. Dr. Hansen is also a practicing internal medicine hospitalist and has served as a healthcare system executive, most recently as Chief Health Information Officer at Hennepin County Medical Center in Minneapolis. Dr. Brita’s Blog covers a range of topics, including:

  • Appropriate Utilization
  • Clinician Engagement
  • Clinical Process Performance & Improvement
  • Healthcare Information Software & Technology
  • EHR Optimization
  • Clinical Decision Support
  • Healthcare Patient Safety & Quality

Recent Posts