The Middleman Impacting Cancer Care & Drug Shortages

How Group Purchasing Organizations Influence Drug Costs, Care Delivery & Patient Access in Cancer & Other Disease Areas

GPOs & Drug Shortages: What's Happening

Even before patients face the burden of rising out-of-pocket costs at the pharmacy, they can be faced with another reality: drug shortages. Behind the challenges of drug shortages in chemotherapy, antibiotics, cardiovascular disease, and other common drug classes are a middleman in the healthcare supply chain known as group purchasing organizations (GPOs).

GPOs operate with significant power and insignificant oversight and have long avoided scrutiny from Washington. Congress and the Biden Administration must bring more oversight and transparency to GPO practices that help fuel drug shortages and harm patient access and care delivery.

  • THE SITUATION: Drug shortages in the United States are creating significant challenges in our ability to effectively treat and manage many of the most debilitating chronic conditions and forms of cancer – including many stage IV cancers.
  • THE PROBLEM: GPOs play a significant role in the ability of patients to access and afford provider-recommended treatments for their condition. Due to consolidation and regulatory exemptions, GPOs have substantial power and leverage to negotiate drug prices and act as a middleman between key entities in the healthcare supply chain – such as providers and drug manufacturers.

  • THE SOLUTION: Congress and federal regulators must investigate how GPO practices impact patient access and care delivery in cancer and other disease areas and bring more oversight and transparency to GPO practices to mitigate the challenges of drug shortages.

What is ICAN® Doing About This?

ICAN® is calling on Congress and the Biden Administration to bring more oversight and transparency to Group Purchasing Organization (GPO) practices that impact drug shortages and patient access to treatments and care in order to promote better health outcomes.

GPOs & Drug Shortages: Key Definitions

  • Group Purchasing Organization (GPO). GPOs are large member-run entities which oversee purchases for healthcare providers, such as hospitals or physician practices, and use their combined purchasing volume to negotiate discounts with drug manufacturers, distributors, and healthcare suppliers.
  • Drug Shortage. A drug product is in shortage when the total supply of the drug cannot meet the current demand for that product. Drug shortages are becoming more frequent in key disease areas, including cancer, antibiotics, and cardiovascular disease.

By the Numbers: The Patient Impact of Drug Shortages in Cancer

  • The US is currently experiencing a shortage of 15 vital chemotherapy drugs in over 90% of hospitals. Access to these medications can be the difference between life and death as many of these drugs can cure commonly occurring cancers.
  • One in ten cancer patients in active treatment have been impacted by recent drug shortages, with Medicaid enrollees most likely to be impacted. 45% of patients facing a drug shortage experienced a delay in accessing treatment or missed their treatment dose entirely.
  • Numerous cancer medications included in the current shortage do not have effective substitutes. 68% of patients impacted by drug shortages reported difficulties accessing substitute medications.

In Their Own Words: Advocates Raise Alarm to GPO Practices

  • "While there are numerous reasons for these drug shortages, at their root are healthcare supply chain middlemen who hold power over large contracts and control production. GPOs are entities within the supply chain that oversee the purchase of medicines and products for healthcare providers, such as hospitals, clinics, and nursing homes. Three GPOs alone are responsible for the purchasing for 90 percent of all U.S. hospitals – garnering these entities significant authority and influence over the ability of patients across the country to access the treatments and care they rely on." – Marcia K. Horn, JD, President and CEO, ICAN, International Cancer Advocacy Network
  • "During the first quarter of 2024, ASHP and our partner, the University of Utah Drug Information Service, tracked 323 active shortages. This is an all-time high, surpassing the previous record of 320 shortages in 2014." – American Society of Health-System Pharmacists (ASHP)
  • "Group purchasing organizations aren't as well known as pharmacy benefit managers, but they're similar in many respects. Both types of organizations negotiate drug prices on behalf of their customers. In both, a handful of big players dominate. Both have drawn the attention of investigators in Congress and antitrust authorities." – Peter Coy, New York Times
  • "These little-known, kickback-driven middlemen use their market power to disincentivize the production of generic drugs, fueling drug shortages and endangering the lives of countless patients, including children." – Morgan Harper, Policy and Advocacy Director, American Economic Liberties Project (AELP)
  • "GPOs are interfering with our ability as physicians to provide excellent medical care for our patients, especially the most vulnerable patients who require surgery, hospitalization, or other complex treatments." – Jeremy Snavely, Director of Regulatory Affairs, Association of American Physicians and Surgeons (AAPS)