Author Topic: Drug shortages and Medicare Part B  (Read 2369 times)


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Drug shortages and Medicare Part B
« on: March 25, 2012, 10:57:22 AM »
I'm an anesthesiologist with an interest in the latest drug shortages. One of my colleagues believes that these shortages are due to changes in the Medicare pays for various injectable drugs. Currently, physicians (usually oncologists) bill for the medications they administer to their patients, but they cannot bill above 6% of the average sales of price if they are billing Medicare. This of course has incentivized them to administer more expensive drugs so that they can pocket more money. The unintended consequence is that, by this logic, there is less demand because of an artificial price control, therefore the cheaper, usually generic drugs are not as available. This is either due to manufacturers exiting the market, or that they are just not making enough. This kind of makes sense for physician adminstered drugs in an outpatient setting, however I don't know how hospitals and other centers that do anesthetics bill. Do they bill Medicare for specific drugs, and is the billing subject to the same rules as outlined in the Medicare Modernization Act of 2003? My colleagues belief is that the shortages we are experiencing with propofol, midazolam, and fentanyl are a result of the Medicare payment rules.


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Re: Drug shortages and Medicare Part B
« Reply #1 on: March 30, 2012, 06:50:12 AM »
I'm sorry, but with my experience as a biller I haven't run into this.  I was waiting to see if anyone else on the forum had experienced it, but since no one responded, I guess not.  Sounds like it is an unfortunate consequence of the way our system works.
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Re: Drug shortages and Medicare Part B
« Reply #2 on: June 08, 2012, 05:29:30 PM »
I have never heard of Medicare causing shortages due to the MMA of 2003.

you can look up drug shortages on a few sites like:

Most shortages are caused by lack of supply's and sometimes due to the location (weather, war, foreign country issues Etc.) also it may depend on if the manufacture owns the patent on the particular drug in which they can control the supply and demand.
perfect example is Shire Pharmaceuticals, Adderall XR.
Adderall XR formula is still patent protected until 2018 so they control production and cost of this drug. they have also sued and or purchased any company who tries to make Adderall XR.
example (Watson Pharmaceuticals)

Here is an example from ashp.ord on there drug shortage page -

Hospira has propofol on shortage due to manufacturing delays.
Teva discontinued all propofol presentations in May, 2010.2
APP is releasing generic propofol to wholesalers as product gets released due to increased demand. Diprivan is readily available.

Estimated Resupply Dates
Hospira has propofol 10 mg/mL vials on back order and the company estimates a release date of August, 2012 for the 20 mL and 100 mL vials. The company cannot estimate a release date for the 50 mL vials; however, emergency supply of the 50 mL vials may be available for direct order.
APP has propofol and Diprivan on intermittent back order and the company is releasing product as it becomes available on a regular basis. Check wholesalers for supply.

Sorry for the late response I just found this site. :)
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