Margaret Clapp, RPh, chief of pharmacy at Boston-based Partners HealthCare spoke recently with Healthcare Finance News Editor René Letourneau about the biggest challenges currently facing the pharmacy.
Q: A recent report from the Generic Pharmaceutical Association claims that generics have saved the U.S. healthcare system $1 trillion in the last 10 years. What have generics meant for your organization and your patients in terms of helping to control costs?
A: I am not sure it’s right to say that it has controlled costs. What it has done is allowed us to move away from branded products. But, there are always other costs that come along, so we are still spending a lot of money. Typically, if competition keeps up in the market, it can mean decreased prices of 70-80 percent, which is huge. However, one of the things that is a concern in the generic market is the competition is good and the competition drives prices down, but then when we do contracting… that naturally causes a shrinking in the market. One of the things that is a concern right now with all the drug shortages is we have squeezed the generic market so much that there isn’t really healthy competition and when one goes down, it’s a big problem. The consequence of the drug being cheap and of driving all the cost out of the system is that nobody wants to be in it. Generics are good. They are heading in the right direction, but it’s the generics that are killing me right now.
Q: President Barack Obama issued an executive order last October 31 to deal with drug shortages. Have you noticed a positive impact?
A: Yes and no. The yes is that (the conversation) has been renewed. We’ve had to put a whole separate process into place in the pharmacy to deal with drug shortages because they are so frequent and they impact the supply chain randomly so we’ve had to be very careful… what (the executive order) did to have an impact was that everyone was kind of put on notice to have a conversation because shortages were wreaking havoc with the healthcare system.
I personally believe, although no one will ever come out and say this, that part of the problem with the FDA themselves was that they cranked up the standards, which made it impossible for some folks to stay in business and keep their lines open. The FDA has always said they have one standard, but I think the interpretation of that standard for a period of time was more stringent and difficult to follow than at other times. That was not part of (Obama’s) edict except that it got pointed out. We’ve raised awareness and gotten a conversation going, and the outcome has been better, but it’s certainly not solved. I have a meeting every Monday to look at the drugs that are on our watch list to see which ones are coming off and what we need to change, and the list is still significant.
Q: It sounds like managing shortages takes a lot of effort and work hours. What is the effect on Partners? Have you dedicated staff to managing this? Are you personally spending more time than ever on shortages?
A: There is a big impact on workflow. If we can’t get something through normal supply chain channels, the expectation and obligation is for us to go hunt it down, which takes a great deal of time. Or, we get something in and we’ve got to repackage it, put our own bar code mapping on it. Or, we’ve got to manipulate that product.
We do a lot of overtime in our manufacturing area to manage this. I’m always over budget, which makes my boss a little bit cranky. We are budgeted for eight full-time employees, or somewhere in that ballpark, but we are really using somewhere north of 11 on this sort of work.
Q: It’s costing more money for staff time. I’m assuming it is also costing more money to acquire some of these drugs. Does that expense get passed onto patients?
A: Correct. When I bring a product in and the price is usually $1, but this time because of a shortage, it’s going to cost me $2 to get it, that will impact the patient bill.
Q: Are you facing other challenges in the pharmacy?
A: Every night I pray that no harm comes to a patient because of a medication… We try the best we can to make sure they are safe. That piece has become about dollars, it’s become a business. We can decrease costs and increase quality, I know all of that, but I am doing a lot of education with my senior leadership here with what goes on with how we keep our patients safe.
[See also: GPOs evolving in a complex landscape]