Revitalized pharmaceutical contracting strategy makes suppliers more accountable in light of ongoing challenge of drug shortages in Canada
To address the impact of disruptions in the pharmaceutical supply chain resulting from drug shortages in Canada, HealthPRO has initiated a new pharmaceutical contracting strategy that aims to protect members and place higher accountability on suppliers.
The changes to the contracting strategy, which was developed with direct input from suppliers and HealthPRO members, were included in HealthPRO's fall 2011 pharmacy product Request for Proposal (RFP) – the largest-ever for HealthPRO's Pharmacy Services business unit, valued at approximately $350 million. A second RFP for oncology drugs and support care products was issued at the same time, also valued at $350 million.
"Our members have told us how difficult it can be when shortages of pharmaceutical and other medical products affect their most vulnerable patients," said Kathy Boyle, Vice President of Pharmacy Services at HealthPRO. "We are taking advantage of our significant purchasing power to introduce a national pharmaceutical contracting strategy that addresses these concerns."
The new contracting strategy strives to strike the right balance between competition, purchasing power and a more reliable supply chain, while ensuring full compliance with regulatory requirements and contracting guidelines. It aims to foresee and avoid supply chain problems, to fortify relationships with suppliers to better manage emerging shortages, and to focus resources where they will have the most impact.
As part of the new strategy, HealthPRO has set more specific guidelines for suppliers facing unexpected product circumstances – one of the criteria measured through HealthPRO's vendor quality management plan. HealthPRO suppliers will now be contractually accountable for providing:
- Notifications about critical inventory levels for hospital-specific items;
- Notifications and action plans for anticipated drug shortages;
- Correction plans for drug shortages lasting more than 60 days for hospital-specific items;
- Notification regarding an intention to discontinue drug(s); and
- Reasonable financial accountability for discontinued items.
The new strategy was formally presented to more than 70 suppliers earlier this past fall at a vendor forum organized by HealthPRO. Also present were members of HealthPRO's Pharmacy Advisory Council, a national member working group that provides expertise in product and supplier selection to ensure quality and cost meet the requirements of HealthPRO member facilities.
"The vendor meeting was a great opportunity to hear about the advances HealthPRO has made in the contracting process for pharmaceuticals," said Michael Bethell, Alveda Pharma. "The team at HealthPRO has applied stakeholder feedback and clearly defined the expectations for the vendor community. The open dialogue between industry and HealthPRO was enlightening and I hope there will be more opportunities like this in the future."
To increase member awareness about shortages of drugs that are on contract, HealthPRO's Drug Shortages Dashboard on healthprocanada.com allows members to search, view and export a list of current shortages. Products can be searched by item number, product description, vendor or status.