In the second quarter of 2012, PP&P polled a random, nationwide sampling of health system pharmacy directors on the factors impacting their generic drug purchasing decisions. We asked about factors that motivate their purchasing decisions, off-contract purchasing, impacts from shortages, gray market purchasing, current budgets, and future spending projections. We received a total of 468 responses, yielding a confidence interval of 4.34 (95% +/- 4.34).
The results corroborate the pervasive impact of drug shortages on all purchasing decisions, including the rise of off-contract purchasing in the search for reliable sources of product. Virtually every facility is affected by drug shortages and a high percentage of these shortages involve generic drugs. In addition to a loss of credibility with medical staff and decreased satisfaction among pharmacy staff, shortages are driving up costs and creating dangerous situations such as compromised patient care, delayed procedures, and, most worrying, increases in adverse and sentinel events. Additional fluctuations in the availability of bar coded unit dose generics mean increasing resources are necessary to manage the purchasing process.
Fortunately, drug budgets reflect this reality and most facilities expanded their overall drug spending this year. This trend is projected to persist with strong generic budget increases driving a significant portion of drug budget growth.
The continual fluctuation of drug availability, pricing, and unit dose options means evaluating contract portfolios is the norm for many facilities. While wholesaler sourcing is the most common approach, larger facilities are more likely to consider GPO-based programs. Notably, those GPO programs also outrank the wholesaler approach in satisfaction with negotiated pricing terms.
The increasing emphasis on generic price in purchasing decisions underscores the importance of monitoring contract portfolio performance to ensure consistent attainment of the best possible prices.
Failure-to-Supply Programs In the search for reliable product sources in this era of skyrocketing shortages, failure-to-supply programs have become fairly common—60% of all facilities have one in place, and that percentage increases along with facility size (69% of the largest facilities have instituted a failure-to-supply program). However, many pharmacy directors are disappointed with their programs. Given the resources required to negotiate terms, track shipments, file claims, and follow-up on collections, few facilities are pleased with the amounts generated by their in-house programs. While GPO-run programs receive better ratings in terms of credits received, pharmacy directors are continually frustrated by the expense and risk involved in responding to shortages.
In the search for reliable product sources in this era of skyrocketing shortages, failure-to-supply programs have become fairly common—60% of all facilities have one in place, and that percentage increases along with facility size (69% of the largest facilities have instituted a failure-to-supply program). However, many pharmacy directors are disappointed with their programs. Given the resources required to negotiate terms, track shipments, file claims, and follow-up on collections, few facilities are pleased with the amounts generated by their in-house programs. While GPO-run programs receive better ratings in terms of credits received, pharmacy directors are continually frustrated by the expense and risk involved in responding to shortages.
Budgeting This year saw growth in drug budgets overall, with 69% of facilities increasing their drug spend. Growth was even stronger for generic spending, as 74% of facilities increased their generic budgets this year. This upward trend is expected to continue as overall drug and generic spending are budgeted to increase next year for most facilities (73% and 75%, respectively). Over the long term, even higher growth rates are projected: 84% plan to increase their drug budgets over the next five years, and 88% plan to increase their generic spending in that same time frame.
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