Economic Analysis of the Causes of Drug Shortages. Sterile Injectable Oncology Drugs Market - Prices and Volumes

10/28/2011

The market for oncology sterile injectable drugs is robust and growing.  FDA analysis of IMS data shows that the number of eaches[14] (e.g., vials) of sterile injectable oncology drugs shipped increased by 14% between 2006 and 2010[15].  ASPE analyzed Medicare Part B data of sterile injectable oncology drugs to examine volumes of sales within Medicare (see Appendix B for methods and sample).  Over the 2006-2011 period, the Part B volume of sterile injectable oncology drugs shipped increased by about 20% (Figure 2).  The reasons for this increase in volume of services used are not clear.  The Part B data suggest that the increase occurred in 2006 to mid 2009, which is somewhat after the Medicare Part B-related payment changes identified by Jacobson et al. (2010).

Using the Part B data, we were able to compare the volume of sales prior to shortages for drugs that did and did not experience a drug shortage.  About 10% of the Medicare Part B volume of injectable oncology services in the period before drug shortages began consisted of drugs that experienced any shortage at some point over the subsequent 4 years.

Figure 2:
Medicare Part B Volume of Services of Oncology Sterile Injectable Drugs

 

Figure 2: Medicare Part B Volume of Services of Oncology Sterile Injectable Drugs. See text for explanation.

Note: The graph is restricted to the J9000-J9999 series of HCPCS codes with greater than 100 services in Q1 2006 and an average of more than 1,000 services annually.

Table 1 reports the average annual change in Medicare Part B volume of services of oncology sterile injectable drugs in the period 2006-2008, before the recent period of drug shortages began, and in the period 2008-2011 after shortages began.  The table is divided into the group of 44 drugs that experience a shortage by 2011 and the group of 28 drugs that never experience a shortage from 2006 to 2011.  On average, drugs that subsequently experienced a shortage are those in which the volume of sales was declining in the 2006-2008 period prior to the shortages.  Drugs that have not experienced a shortage since 2008 had an average 11% increase in volumes of services over this period, and a similar increase in the 2008-2011 period that followed.

 

Table 1:
Annual Change in Medicare Part B Volume of Services of Oncology Sterile Injectable Drugs
Period Drugs Experiencing a Shortage since 2008
(n = 44)
Drugs not in Shortage since 2008
(n = 28)
Number of Drugs Change in Volume
of Services over Period
Number of Drugs Change in Volume
of Services over Period
Mean Median Std. Dev. Mean Median Std. Dev.
Q1 2006 to Q1 2008 44 -6.9% -5.6% 29.6 28 11.2% 4.8% 40.5
Q1 2008 to Q1 2011 44 -2.0% -7.6% 200.5 28 10.5% -2.3% 59.1
Q1 2006 to Q1 2011 44 -3.0% -16.2% 184.3 28 23.8% -5.4% 61.7
Note: The table is restricted to the J9000-J9999 series of HCPCS codes with greater than 100 services in Q1 2006 and an average of more than 1,000 services annually.
Mean and median changes are weighted by volume of services in Q1 2006.

As noted above, sterile injectable drugs are generally purchased by hospitals and physicians, not by consumers.  Medicare reimburses sterile injectable drugs at 6 percent above average sales price (ASP) under Medicare Part B.  Data on prices paid by Medicare Part B, thus, provide a sense of average prices in this market.  Table 2 reports the average annual change in prices of oncology sterile injectable drugs in the years prior to a reported shortage, adjusted to 2011 dollars using the CPI.  Among the group of drugs that eventually experience a shortage, average prices decreased in every year leading up to a shortage.  In contrast, the average prices of drugs that never experienced a shortage over this period did not change substantially either in the earlier or later period.

 

Table 2:
Annual Change in Price of Oncology Sterile Injectable Drugs
Period Drugs Experiencing a Shortage since 2008
(n = 44)
Drugs not in Shortage since 2008
(n = 28)
Number of Drugs Change in Price over Period Number of Drugs Change in Price over Period
Mean Median Std. Dev. Mean Median Std. Dev.
Q1 2006 to Q1 2008 44 -26.5% -21.4% 19.1 28 0.6% 2.5% 10.9
Q1 2008 to Q1 2011 44 -6.3% -19.4% 113.7 28 2.6% 0.5% 32.0
Q1 2006 to Q1 2011 44 -27.4% -49.1% 94.4 28 3.2% 0.3% 24.4
Note: The table is restricted to the J9000-J9999 series of HCPCS codes with greater than 100 services in Q1 2006 and an average of more than 1,000 services annually.
Mean and median changes are weighted by volume of services in Q1 2006.  Changes in price are based on prices in 2011 dollars.

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