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IVIG is approved to treat certain blood disorders (such as some leukemias) where the patient’s body does not produce enough antibodies, and in bone marrow transplant patients. Patients with neurological conditions like multiple sclerosis may also benefit. IVIG therapy is also approved for treatment of patients with autoimmune diseases, such as rheumatoid arthritis and lupus, in which the patient’s body produces antibodies against itself.

IVIG can be safely administered
in an outpatient setting such as a doctor’s office or infusion at home, or in the hospital.

Many patients receiving IVIG therapy need to receive it regularly – generally monthly – for life. Unfortunately, availability of this life-saving product or access issues may prevent patients from receiving the treatment they need. This is the result of a cascade of events in the healthcare supply chain – events that impact both supply and demand.

Currently, five manufacturers have FDA clearance to supply IVIG to the U.S. market: Baxter, ZLB Behring, Talecris, Grifols and Octapharma. The first three of those control the lion’s share of the U.S. market. These companies take the "raw material" of IVIG – human blood plasma – obtained through plasma collection centers. Through a specialized and time-consuming manufacturing process, they turn it into IVIG as well as other products, such as albumin.

Several years ago demand for IVIG was less-developed than today. Product was more abundant, and prices therefore lower. Then manufacturers closed their plasma collection centers, in turn limiting the manufacture of IVIG. At the same time, demand began to grow. As the above analysis by Citigroup Investment Research shows, we can expect supply to lag behind demand for some time to come1, and prices to remain high.

Availability is further constrained by distribution channels. Unlike other pharmaceutical products, plasma products are primarily sold through a relatively small number of specialty distributors. Much of the product is currently committed to specific contracts when it is delivered to the distributors. These contracted entities include group purchasing organizations (GPOs), physicians, hospitals and other providers who self-contract for the product. It is safe to say that no one – GPO or individual provider – gets as much product as they want because the supply is limited.

Based on terms in particular manufacturer agreements, each contracted entity receives a fixed allocation of product from that manufacturer. In GPOs, members, in turn, receive a fixed amount, usually in proportion to the member’s historical use. With rising new demand and allocations based on historical data, many members are challenged to obtain enough IVIG for their needs.

A challenging dynamic is how to accommodate hospitals and other providers who choose to switch their GPO alliance. These caregivers need uninterrupted access to their IVIG (and albumin) supplies in order to provide patient care. For that to happen in today’s supply crunch, the hospital’s allocation should be portable and move with them to their new GPO. Unfortunately, some GPOs have signaled that they will refuse to allow a member to take their allocation with them. One manufacturer has taken the high road by writing portability language into its current GPO agreements.

Supply is not meeting demand, particularly for hospitals, because demand is growing.

One reason hospitals need more IVIG is a change in reimbursement. The Medicare Modernization Act, effective January 2005, lowered the Medicare payment for IVIG administered in physician offices and the home. As a result, according to Paul Chilcutt, M.S., R.Ph., executive director, MedAssets Supply Chain Systems, some physicians appeared to shift IVIG treatment of Medicare patients back to the hospital setting, intensifying the pressure on the acute care supply.

Demand is also being influenced by how the product is being prescribed by physicians. The Advisory Committee on Blood Safety and Availability of the Department of Health and Human Services notes that "providers have reported that the majority of their IVIG use is for off-label indications. Off-label use may have increased, contributing to rising demand."

Obviously, many components of IVIG supply and demand are beyond the power of the purchasing professional to control. But an honest "risk assessment" will enable you to advise executive management on the challenges:

• Understand how the hospital manages off-label use. The P&T Committee should have policies that prioritize IVIG prescribing to FDA-labeled uses, for patients whose illnesses have been shown to benefit from IVIG and for whom no alternatives are available.

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