Monday, March 03, 2008

The Dark Side of Pharmacy Outsourcing

I hate to be the bearer of bad news (again), but Katherine Eban, the muckraking author of 2005's Dangerous Doses, is back to take another shot at wholesalers.

Your Hospital's Deadly Secret describes the sad case of Alyssa Shinn, a premature baby who died after being given a fatal overdose of zinc from her intravenous nutrition bag, apparently due to a mistake made in the hospital pharmacy. This story was also featured on Nightline (video).

As it turns out, the hospital pharmacy had been run by outside companies for at least 10 years. Each of the big 3 wholesalers -- AmerisourceBergen (ABC), Cardinal Health (CAH), and McKesson (MCK) -- had taken a turn running the hospital's pharmacy. However, UHS was apparently managing the pharmacy at the time of Alyssa's death. [Please see Correction notice below.] According to Katherine's article, about 440 U.S. hospitals outsource the management of their pharmacies.

But just in case you miss the point, the article's subtitle reads: "Hospital pharmacies across America are being contracted out to companies with little or no medical expertise. Patients are paying the price." Oh well, there goes Katherine's invitation to the next HDMA meeting!

After I read the article, I asked Katherine for her perspective on independent pharmacy managers such as Comprehensive Pharmacy Services versus wholesalers. According to Katherine: "From what my reporting is telling me, I think they probably are better -- in large part because their sole focus is to improve pharmacy performance."

And if Katherine's story is not enough scandal for you, you can also read about Cardinal Health's alleged problems with the management of the hospital pharmacy at DeSoto Regional Health System. (See State, federal agencies probe DeSoto hospital.)

I encourage you to read these articles and make up your own mind. But I'm curious to hear the opinions of my pharmacy or wholesaler readers. Are there systemic flaws in the wholesalers' pharmacy outsourcing business or does this story simply highlight the mistakes of a few individuals at a single facility?

CORRECTION: In a previous version of this post, I had mistakenly written that McKesson was operating the pharmacy at the time of Alyssa's death. In fact, AmerisourceBergen was advising UHS in July, as the article correctly notes. I apologize for the error.


  1. Outsourcing removes a critical quality-control element in the bigger picture of patient health. It can be managed, but can also be mismanaged, and it often is in the name of managing a company's fiduciary responsibility to shareholders.

    Consider an closely-related alternative, which is when drug and biopharmaceutical manufacture is outsourced, which is becoming increasingly common as drug and biopharmaceutical companies seek to increase their own bottom lines by leaving the dirty work ... manufacture ... to others who can do it cheaper than they can.

    This isn't a catastrophe waiting to happen. This is a catastrophe that IS happening, and its only a matter of time before more and more people killed as a result.

  2. AnonymousMay 20, 2008

    I was the Director of Pharmacy for Comprehensive Pharmacy Services at De Soto Regional. CPS and DRHS BOTH attempted to coerce me into continuing illegal activities that were in place prior to my tenure. The Louisiana Department of Health issued a twenty-five page report of deficiencies at De Soto Regional. Former CEO Richard Salgueiro was terminated for refusing to continue illegal activities as well. Articles in the Shreveport Times and Tribune discuss the deficiencies we brought to the hospital's attention. This is a travesty and should never be allowed to happen in the healthcare setting.