Part 2 Why are IV Drugs so Expensive

Part Two- The cost of the Drug
Now as for the actual cost of the drug! There are "brand names" and there are "generics". The brand named drug is the first to hit the market, and is protected for a number of years to allow the manufacturer to recoup it’s development costs. At times a drug may cost 98 cents, but the company will charge $4,000.00 for a dose of that drug. Wow, that’s a lot of profit.
But the manufacturer has to test the drug and prove to the FDA that the drug is not only safe, but effective. That procedure is lengthy and very costly. The last time I looked (several years ago) the cost averaged a half billion dollars! Five hundred million dollars to prove that a drug is not only safe but also effective. Our company has been involved in drug testing, and quite frankly the procedure is complex and very detailed and extremely expensive. There are pharmacists, nurses, research coordinators, and monitors to insure everything is accurate and proper and that every detail is recorded. The work that goes into the research is incredible complex. There are lab tests to be performed, physician examinations, inspections of the facilities that distribute the drug, as well as the delivery systems. An incredibly complex system to insure safety and that the drug does what the people who sell it claim it does.
Ah but the patent protection does run out and that’s when we see generics enter the supply stream. We recently saw that with Rocephin. We watched the average wholesale price drop from $110.00 per 2 gm for the brand named products to less than $20.00 for the generic. Does that mean the generic is inferior? Not always! Some brand name companies also make generics. Novartis, as an example, is a company that does research and has several brand named products. One division of that company (Sandoz) produces generics. So you have a company that makes brand named products, also producing a generic. (I like to think of it, as another brand, like "Chevy" and "Cadillac") But you could also get a Yugo! You know that car company,, sometimes you go, sometimes you don’t! Sorry I don’t want to disparage a car company but I wanted to make a point. When we purchase generics, we strive to get the most quality for the least dollars. And when there is a company that we don’t know, we mix the drug and send it to an independent lab for testing to make sure it’s not substandard. (This also is costly, somewhere in the neighborhood of one hundred dollars per sample, depending on the product)
Well, you might think, all generics are created equal. Since the FDA inspects each manufacturer, we should buy the cheapest we can find.
I don’t want to give you the idea that there is certain uniformity in drugs such that they are all equal. (while it’s true, many are, some are different) When generics were first introduced there was an anti-diabetic generic drug sold only in Canada for a fraction of the trade named product. The drug was chemically identical to the trade name product and several US citizens purchased the drug from Canada. At first there was no problem, the diabetics blood sugars were in control. But all of a sudden the patients who purchased those generics, had blood sugars out of control and no one could figure out why.
When the generic tablets were analyzed they were chemically identical. It was a puzzle, until someone noticed the problematic tablets were slightly smaller than normal even though they contained the same amount of drug! On further analysis it was found the tablet didn’t dissolve in a normal way. What they found was, the tablet press used to stamp out tablets was set to a pressure that was too hard. The tablets were slightly smaller (because excess pressure was used to stamp out the tablet) and as a consequence they didn’t dissolve properly when patients took them. On further examination, they were found whole in the stool of many patients who were having blood sugar problems.
The above illustration explains why we send off samples of our products to an independent lab for testing. It’s also interesting to note that in our pharmacy we take a small sample of every single IV we produce and put it in a soy broth. (a nutrient solution) and then put it in an incubator. We do this to insure sterility. If bacteria won’t grow in a nutrient broth that is kept at a warm temperature, it assures us that it most probably is bacteria free. This is not a "requirement" or "standard of practice" but we do it to insure sterility of all our products. There are some accreditation agencies that suggest the type of sampling we do be performed daily, or weekly to insure proper procedure but we do it with every sample.
Now what has all of this to do with cost? Simply this, it’s time consuming to do the testing we do, and it’s expensive. And while we want to keep the cost to a bare minimum, we will not compromise quality.
There are other factors affecting the cost of the IV product and that is method of delivery. It’s interesting that even in the delivery system there are a wide range of costs and this too is enormously complex and confusing. Some of the complexity comes from the fact that certain delivery systems are very expensive, but save costs in other places.
For example, an elastomeric pump costs much more than an IV bag. But, a 50 ml bag of normal saline costs about the same as a liter bag with 20 times the volume. (actually the Liter bag costs twice what a 50 ml bag cost, but you get 20 times the volume for twice the price) So you can fill 10 ball pumps with 50 ml for the same cost as 1 IV bag. Then the ball pump comes with its own IV line that you would have had to purchase if you use an IV bag. When you add all of these costs and compare the price can be only slightly more! But, sometimes the seemingly more expense method of deliver is actually the same price or cheaper we have to do the calculation every time to make sure we deliver to our customer the most cost effective product. Other factors such as shipping method also play a roll in cost. It’s much more expensive to ship overnight than ground (which takes several days) If we use ball pumps we must ship overnight (very expensive), but if we use connectors where the product is simply connected to diluent but not mixed, we can ship ground (much less expensive). But the connectors add extra expense! As you can see, the calculations are very complex.
Some patients want to IV push a drug, and that is very inexpensive because you don’t have to use IV lines, have a pump etc. etc. etc. etc. But some drugs can’t be IV pushed because they can do damage when that route of administration is used. So deciding which method of administration is complex! The wrong choice can have financial consequences, but financial outcomes do not take precedence over patient safety.
IV drugs are expensive but they don’t have to be overly costly! Patients should chose their pharmacist as carefully as they chose their physician!
Written by David Kazarian.

David Kazarian has practiced pharmacy for over 4 decades! He as been president of a national pharmacy organization and currently sits on the board of a public company that produces products for the pharmaceutical industry. He has started two IV companies and currently is president of Infuserve America, a home IV company located in Saint Petersburg Florida.

Brought to you by HCC Pharmacy Solutions
Dean A. Pedalino RPh,CPh, FASCP

Why Are IV Drugs So Expensive- Part 1

Why are IV drug so expensive?
Why are IV drug so expensive? Not surprisingly, that’s a question I often hear when people must pay for their therapy.
Well, the answer is both simple and complex. Simple, because many of the raw ingredients are expensive! Complex because there is a lot that goes into the manufacture of your IV preparation. If you saw us mix your drug you’d think our staff was walking into an operating room. We are literally covered from head to foot, with a cap then face mask, a gown, and booties worn over our shoes. Our hands are covered with sterile gloves, and then sprayed with sterilized alcohol! All of those body coverings cost something! While not a lot, over the course of the days and weeks they add up, especially when there are 4 or 5 people using going into the clean room.
The Procedure
Before a medication is even mixed there’s a lot of preparation that goes into procedure. Every morning one of our staff gown up and go into both our clean rooms and scrub the room with a special antibacterial solution. The floors are scrubbed, the counters and the walls. Once a week the ceiling is scrubbed with that solution too!
Why two clean rooms? Because we mix chemotherapy agents, and the hood (that device that is used to mix drugs) is different when mixing chemo than the one for antibiotics. Chemo therapeutic agents can actually cause cancer if an individual is exposed to those agents. So we don’t want any possibility of cross contamination. Not only do we use different hoods, we separate them in two different rooms.
Bookkeeping and pharmacy technicians prepare paperwork, making sure all the necessary supplies to properly administer the drug are entered. We want to make sure that if you have an IV that is going to be mixed and placed in a bag, there is tubing to connect that bag to your access site (a PICC line or whatever type of catheter you have inserted)
Before mixing we have to calculate the shelf life, delivery system, and diluent! If the drug has a short shelf life, we can’t deliver more than perhaps a weeks supply, or, if it’s very short, we may have to use special connectors and attach an IV bag with saline to a vial with powdered drug. If the patient has difficulty infusing, we must be creative in the products we use. We might need ball pumps for that individual.(elastomeric devices) If someone is severely challenged financially, we must become even more creative and balance patient safety with inexpensive infusion procedures.
Determining the shelf life we use publications, computer software and monthly publications. Keeping current is very important and can have a great impact on the products we use. We pay one software vendor for a clinical pharmacology program close to a thousand dollars a year. We pay another almost that for two hard copy publications of books that detail shelf life, stability, how to mix a preparation, and compatibility (what drugs can be mixed in what other drugs) All of those publications are expensive, but necessary for us to insure that when products are prepared and delivered to the end user, the patient, are proper and won’t cause a problem in the field. At times when two drugs are mixed they precipitate or fall out of solution. Many times that occurs immediately, other times it happens over time. This knowledge is very important because you wouldn’t want small particles falling out of solution just as you start your infusion! Those publications, pharmacy software and years of experience guide us through the preparation of safe intravenous pharmaceuticals
Once the paperwork is generated a person in the warehouse gathers the supplies needed to compound your prescription. Those items are placed on a counter for a pharmacist to review. The drugs are put on top of the paperwork that has four signature blocks on the form. The first is for the signature of the person that gathers the medication and supplies. When that person signs the form, they certify that the products gathered are correct. The second is for the pharmacist to verify the products are indeed what the prescription called for, and that the correct lot number and expiration date have been recorded on that form. The next signature block records the person who compounded the product, and the last, a final check is done by the pharmacist before the product can leave the pharmacy. Each of these boxes with signatures are part of our Quality Assurance Process. We know who has been involved in your product, EVERY step of the way.
Once two people have signed off on the products they are lightly sprayed with sterile alcohol and are moved into the "clean room". But before that happens, the person compounding the medication has to scrub, cap gown and prepare for the mixing. Scrubbing is a process prescribed by professional standard, using antibacterial soap, for a specified period of time. Also gowns must be donned, a cap, mask, and shoe covers, all of which cost something and must go into the cost of the final preparation.
Once in the clean room, the "hood" where the drugs are mixed must be sprayed with sterilized alcohol. (Cost of a pint of that stuff is about twelve dollars) You might ask, if alcohol kills bacteria, why does it have to be sterilized? Good question, and the reason is, because some spores can live in alcohol (a very few, but there are some that can) so we have to insure that we’re not introducing those spores to the clean room. You might also ask why clean the hood again, after all, first thing in the morning the clean room was already cleaned. But protocol calls for cleaning the hood where we mix medication before and after every single IV is prepared, with that twelve dollar bottle of sterile alcohol.
Once the hood is prepped the product is mixed. Many times we use a plastic device that goes into the drug product and has a vent on the side to allow air out as sterile water is forced in (or normal saline, or dextrose in water) to dilute the product and get it into a liquid state. If you’ve ever tried to introduce water into a vial (or take out liquid from a vial) without a vented needle you will quickly see the reason a vent is needed. The first time I tried, I pulled on the plunger, and the liquid came into the syringe, but as soon as I let go of the plunger it rapidly went back to it’s original state. That happened because of the vacuum that’s created. I learned very quickly that either use a vented system or inject air into the closed system before trying to get something out of it. The point is, those vented needles cost somewhere in the neighborhood of $2.00 EACH!
Of course all of this is done in a "class 100" area (the clean room ) under a hood. Those areas must be certified every six months (costs somewhere around a thousand dollars to do that, and when they find a problem and you have to fix it. In a past inspection the person certifying our clean rooms detected a problem with a HEPA filter. (High efficiency particulate air filter) That filter, can cost several thousand dollars, our last filter was more than five thousand. But those filters insure airborne bacteria and viruses are kept to a minimum.
OK you say, they’re done. Well not quite yet. Once the product is mixed it is placed either in the refrigerator in a "quarantined area" or in the anteroom in a quarantined area. It’s quarantined until another pharmacist reviews the medication to insure it was properly mixed, that there is no debris floating around in the bag (yes we’ve seen it happen.
Once the pharmacist signs off on the product it’s ready to be shipped. Ah, just throw it in the box and off it goes right? No, not that easy. We now have a list of supplies. Just like the drug mixing procedure there is a procedure to pack the box. One person gathers the supplies and lays them out, and other person double checks to make sure they were correct. (There are two signature areas on the bottom, and both the person that gathered the supplies, and the person double checking have to sign off to certify the supplies and drug are correct) We also list the lot number and expiration date of each product. All of this takes time, but insures accuracy.
Now the medication and supplies are finally ready to ship. If the products are to be refrigerated a Styrofoam box is used along with ice packs. I don’t know how a light Styrofoam can be so expensive, but those special formed boxes can be very expensive. In one drug study, we were required to purchase validated boxes at a cost of sixty five dollars each!
Each of those steps has associated costs, all of which must be rolled into the cost of the final product. If they weren’t the company supplying the IVs would soon be out of business.
At our company, we work very hard to find quicker, more efficient ways of producing the products we produce. Of course, we don’t compromise quality for cost. Sure we could get the products out faster, with less manpower costs of we just threw the things together and didn’t double check everything, but then we might use the wrong drug, or use the wrong diluent. People are human and errors happen, that’s why we have so many checks and balances. There are even errors when automated systems are used.
Written by David Kazarian.
David Kazarian has practiced pharmacy for over 4 decades! He as been president of a national pharmacy organization and currently sits on the board of a public company that produces products for the pharmaceutical industry. He has started two IV companies and currently is president of Infuserve America, a home IV company located in Saint Petersburg Florida.
Edited and posted by Dean A. Pedalino, HCC Pharmacy Business Solutions