11 Ways GPOs Can Help Mitigate Drug Shortages

A recent Avalere Health report released by the Healthcare Supply Chain Association finds drug shortages continue to be a significant threat to public health. As a prominent trade association for group purchasing organizations in the United States, HSCA maintains a commitment to helping address the issue of drug shortages and assisting materials managers in navigating them.

The report outlines case studies of successful strategies implemented by GPOs in the midst of a drug shortage. Here are those 11 ways GPOs can play an active role in mitigating drug shortages.

1. Help hospitals alert the public about drug shortages by providing financial and technical support.

2. Incentivize drug manufacturers to produce a certain amount of critical drugs by giving manufacturers the estimated purchasing needs of its members. If the members' demands fall below the estimated purchasing needs, the GPO agrees to compensate the manufacturer.

3. Hold suppliers accountable for achieving quality metrics by requesting transparency of the drug production, including asking for the suppliers' compliance history with the U.S. Food and Drug Administration and the source of the active pharmaceutical ingredients.

4. Contract with new manufacturers of generic products to expand supply and meet the market demand for key products.

5. Keep communication flowing with the FDA and manufacturers. If a GPO alerts the FDA that a manufacturer has stopped producing a key drug, the FDA can begin to identify alternate suppliers. The FDA and the Generic Pharmaceutical Association developed the Accelerated Recovery Initiative which reduces the impact of drug production issues by facilitating communication among manufacturers.

6. Identify and communicate issues regarding "gray market distributors" — unauthorized distributors — and raise awareness about the patient safety risks and price hikes associated with the gray market.

7. Coordinate distribution through a single distribution channel to control and assure availability to key drugs.

8. Implement a "guaranteed supply program," which is similar to an insurance plan in that GPO members pay a premium to protect their drug supply in the event of a shortage. The GPO can hold four months worth of a drug, and in the event of a shortage can release this supply to members.

9. Contract with multiple suppliers for drugs with a history of shortage risks, notably generic injectable medications. This allows GPO members access to more drugs on contract while also supporting the generic injectable industry by allowing multiple suppliers to secure contracts.

10. Partner with members to jointly develop surveys identifying the impact drug shortages have on patient care to help determine areas for improvement.

11. Share best practices of member organizations, including information on alternative therapies.

To learn more about the case studies, access the report here.

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