98.9% of US oncologists polled for a recent survey say they have experienced shortages of cancer drugs in the last year, and that as a result of the shortages, cancer has progressed in more than 60% of their patients.

Over 70% of patients have experienced more severe side effects as a result of the shortages, add the oncologists, responding to a survey conducted by the Community Oncology Alliance (COA). Almost half of the physicians also reported that they were seeing more than one patient per day affected by a drug shortage, and 58.2% say the shortage of cancer drugs is increasing. 

In addition, over 80% of the patients and more than 90% of the practices affected by a cancer drug shortage experienced a more severe financial burden, says the COA.

"The root cause of the drug shortage is economic," commented COA executive director Ted Okon. "The Medicare system for reimbursing for cancer drugs has created pricing instability. That has resulted in disincentives for manufacturers to produce these low-cost but vital generic cancer drugs, as well as to invest in manufacturing facilities for these products," he added.

Oncologists also warn that drug substitutions made because of a shortage often result in patients facing significantly higher costs.

"When treating ovarian cancer, a commonly-used drug is leucovorin. The cost to Medicare is $35 per dose - the patient co-payment is $9. But leucovorin is a generic drug and in short supply," said Dr Patrick Cobb, an oncologist at the Frontier Cancer Centers and Blood Institute in Montana.

"The substitute is a branded drug that is readily available. The cost to Medicare for a dose of the branded drug is $2,000 and the cost to the patient is $520. This is an unacceptable consequence of the drug shortage," said Dr Cobb, who is a past president of the COA.

Meantime, a group of leading Democrat members of Congress have called for the Government Accountability Office (GAO) to investigate whether hospital drug-buying practices are a major cause of the current shortages.

Representatives Edward Markey, Henry Waxman, John Dingell, Frank Pallone, Diana DeGette and Anna Eshoo have asked the GAO to investigate the contracting practices of Hospital Group Purchasing Organizations (GPOs) and the role that they play in triggering drug shortages, with a focus on their fee structure.

As the number of drug shortages has risen over the past few years, doctors and hospitals have increasingly turned to compounding pharmacies to fill the void, say the legislators. One such compounding pharmacy, New England Compounding Center (NECC), has been found to be the source of contaminated drugs that caused a nationwide meningitis outbreak, killing 32 patients and making another 461 ill.

As Congress investigates all the cause of the meningitis outbreak, "we need to look at the role GPOs play in the occurrence of drug shortages that could lead to increased reliance on compounding pharmacies. Increased hospital reliance on compounded drugs should be a result of increased need, not unfair pricing," said Rep Markey.

If GPOs are "taking advantage of their unique role in facilitating a safe and reliable drug supply, then we need to know about it," added Rep Eshoo.

GPOs are designed to leverage the purchasing power of their client hospitals to obtain the lowest prices for drugs and devices. However, the legislators point out that a number of experts believe that anticompetitive, exclusionary contracts by GPOs have rigged the market in favour of a few manufacturers and distributors. Current law allows GPOs to charge the drugmaker a fee based on a percentage of the total value of the purchase, and the experts consider this a "kickback" that creates a perverse incentive structure - the more a hospital pays for the products, the higher the kickback and profit for the GPO.

"Shut out of the lucrative GPO contract and unable to make a profit, other manufacturers cease production and leave the supply chain more limited, fragile and vulnerable to shortage," the legislators warn.

They also point out that compounding pharmacies like NECC are intended to operate on a limited basis and provide patients with drugs that are tailored for a specific need. However, in reality, many such pharmacies have been producing a far larger quantity of products than Food and Drug Administration (FDA) guidelines permit, at least partially in response to demand from hospitals unable to acquire the drugs they need at a reasonable cost, they add.

GPOs are a major - if not the primary - contributor to the market distortions in the US healthcare industry, said S Prakash Sethi, University Distinguished Professor at Baruch College, The City University of New York.

"Through exclusive contracting, which has given GPOs effective monopolistic control of this industry, they have contributed to product shortages and disincentives for legitimate producers to manufacture and stock essential drugs. At the same time, they have given rise to unscrupulous manufacturers to produce and market substandard drugs and thereby expose the patient population to serious health risks," said Dr Sethi, who added: “it is ironic that this tragic state of affairs is the result of a Congressional mandate."