Are Manufacturers Colluding to Send Saline Prices Skyrocketing?
A bipartisan group of four United States senators recently implored the Federal Trade Commission (FTC) to investigate collusion among manufacturers of intravenous saline solution. It was the latest example of increased scrutiny of the increasing cost of injectable drugs that has outraged hospitals and lawmakers alike.
In a letter sent to the FTC, Senators Richard Blumenthal (D-Connecticut), Mike Lee (R-Utah), Amy Klobuchar (D-Minnesota), and Orrin Hatch (R-Utah) accused Baxter International, B. Braun Medical, and Hospira — now owned by Pfizer — of capitalizing on nationwide shortages of saline solution to inflate prices by as much as 300% in order to maximize profits. The senators claimed the price gouging saddled hospitals and healthcare systems with millions of dollars in added expenses.
The senators also said the price inflation is “outside the bound of normal market forces” and pointed out that the shortage is still ongoing after nearly two years, which they claimed raises questions about whether or not the manufacturers really want to solve the problem. Saline solution is an essential supply in hospitals for, among numerous applications, diluting medications. The senators said more than a billion units of saline are sold each year.
William Rader, a spokesman for Baxter, said sterile IV saline solution is one of the best medical values in health care today. He claimed Baxter has made extraordinary efforts to maximize the availability of sterile solutions, including identifying and securing additional sources of supply and having the company’s FDA-approved manufacturing facility in Spain ship saline solutions into the United States.
“The average selling price of Baxter’s commonly prescribed 1L sterile saline solution in the United States annually has increased at a very modest level — nothing like the amounts cited in the letter,” commented Mr. Rader. “From late 2013 through today, average annual rates of increase are in the range of single to low double digits.”
Spokespersons for B. Braun and Pfizer did not respond to requests for comment, but denied the senators’ accusations in previously published reports.
“Most drug shortages are caused by quality issues, and those issues can translate into manufacturing shutdowns or slowdowns, or recalls of poorly manufactured product,” said Dr. Erin Fox, director at the University of Utah Drug Information Service. “We have shortages, because in general, most injectable drugs are made by just one or two companies, and there is no additional manufacturing capacity for another supplier to increase production or make up the difference.”
High drug prices are a major problem for hospitals because they are so difficult to predict, noted Dr. Fox, who said hospital administrators are used to budgeting for new and expensive drugs but struggle to adapt when the price of generics begin to match the cost of name brand drugs.
A solution is not clear-cut, added Dr. Fox, who was scheduled to testify about the increasing cost of pharmaceuticals at the Senate Committee on Aging. “The question of how much a drug costs is one of the most complicated and difficult questions to answer, because there are so many different prices” conceded Dr. Fox. “Saline definitely falls into that category.”
She believed the issue is coming to a head now because hospitals are reviewing contracts with fluids suppliers. “Can you imagine being presented with a contract that has a large price increase from a company that hasn't done a good job of supplying you with a critical product?” she asked. “That’s a bitter pill to swallow, and I can understand why people are mad, especially since there is no alternative — you need saline.”
Escalating drug prices are becoming an access issue that mirrors drug shortages, according to Dr. Fox. “If hospitals can't afford to stock a product in the same way that they had due to prices, it effectively becomes a shortage and pharmacists will need to have a plan in place to minimize any impact for patients, while also keeping their pharmacy budget solvent,” she commented.
According to Dr. Fox, the best way to manage a shortage is to identify the specific pharmacy staff members who will be in charge of communications, decisions about product switches, necessary IT changes, and medication safety.
—Dan Cook
