Hospitals overhaul strategic sourcing as shortages of critical drugs increase  The healthcare industry has been one of the few sectors of the economy to undergo significant job growth over the past few years. The landmark healthcare act passed by the Obama Administration in 2010 effectively increased the demand for doctors and other healthcare professionals, by providing insurance for the millions of Americans without coverage.

However, as hospitals and other healthcare providers have worked to expand their payrolls and improve facilities, they have also been overhauling their spend management programs as they strive to achieve business cost reductions. With few hospitals in the U.S. serving as nonprofits, hospital administrators affirm they are feeling pressure to ensure strategic sourcing initiatives and other programs are running at an optimal efficiency level.

Under pressure to keep costs down, there are other forces conspiring against procurement consultants working with hospitals, according to a report from The Economist.

A new phenomenon has gripped the U.S. medical sector over the past few years, and it is increasingly concerning doctors treating patients who, in some cases, are suffering from serious illnesses. The U.S. has experienced a shortage of medications over the past 16 to 24 months, according to physicians, and the dearth of products is not merely affecting clinics located in remote areas.

In fact, doctors at some of the biggest academic hospitals in the country have been affected by the drug shortages, with physicians at Massachusetts General Hospital - one of the world's most prestigious - struggling to secure medications that have been around for more than a decade.

In 2004, the U.S. had a shortage of 58 drugs, but through the beginning of this year that figure has surged to 180, and analysts expect it could rise higher by the end of the year. In 2010, there were 178 medication shortages all year long.

What worries industry analysts and doctors the most about the dearth of medications is they are used in the treatment of life-threatening illnesses, including colon and breast cancers, as well as leukemia and serious infections. Drugs like Doxil, a cancer drug made by Johnson & Johnson used to treat ovarian cancer, is one such drug that has been difficult for doctors to secure over the past year.

Johnson & Johnson spokeswoman Monica Neufang affirmed the drug shortage was prompted by problems a third-party vendor was having while manufacturing the medication, according to The New York Times.

"Our third party manufacturer has had some manufacturing issues related to capacity," she said.

In other instances, however, doctors have had little insight as to why medications have been unavailable, an exceedingly frustrating occurrence for physicians when they endeavor to explain to their patients why they will have to wait to receive potentially life-saving medicines.

Industry experts assert the vast majority of shortages are affecting medications that have been around for decades and are now sold in generic form. Other kinds of new medicines that cost significantly more have largely been spared during the recent spate of supply problems, according to The Boston Globe.

The Food and Drug Administration says that more than a dozen cancer drugs are now in short supply, leading many doctors to call on the government to begin stockpiling medications, or perhaps, to manufacture drugs itself.

"To not have these drugs available is unconscionable; we literally cannot treat cancers we know are not just treatable but curable," American Society of Clinical Oncology president Dr. Michael Link said.

Heather Bresch, the president of Mylan, a large generic drug maker, told The Times that shortages of critical medications are occurring as a result of the decades-long consolidation among generic drug makers. Such companies compete on price, she said, and have foreign plants that are not routinely inspected.

"The race to the bottom has led to an increase of products coming from plants in China and India that may have uncertain supply and may have never been inspected," Bresch contended. "If the F.D.A. was required to inspect foreign drug plants at the same rate it does domestic ones, we might not have so many of these shortages."

Senior government officials have held meetings over the past few weeks as they work to solve the emergent medications crisis, but doctors are growing increasingly frustrated and worried over the ever-growing number of medications they are having difficulty obtaining. With expensive new drugs easy to procure, many physicians contend the shortages are preventable, citing how quickly the problem emerged, and result from drug companies' lust for ever-greater profits.

"Agents that have true benefits in extending survival are becoming scarce. It makes no sense," Tufts Medical Center Cancer Center clinical director Dr. Jack Erban affirmed. "This is a completely new phenomenon that’s started happening in the last, I’d say, 12 to 24 months."

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