News & Events

PHSL President Ann Johnson and Consultants Alan Sekula and Ashley Ellek will be attending AMCP Nexus 2022 in National Harbor, Maryland on October 11th-14th. According to AMCP, the conference is expected to attract over 2,500 attendees, and will include 26 education sessions, 3 keynote presentations, and over 70 exhibitors.

To schedule a meeting with a member of the PHSL team during the conference, click here to contact PHSL.

PHSL Vice President Melissa Krause and PHSL Intern Logan Graham will be presenting at the Pennsylvania Pharmacists Association 2022 Annual Conference on October 7-9 in Pocono Manor, PA. Melissa and Logan will be presenting foundational information on biosimilars, interchangeable biologics, and stakeholder considerations. Conference participants can attend their CE program “Biosimilars & Interchangeables: Key Considerations for Pharmacy” on Saturday, October 8th at 5:25 PM.

Melissa is also presenting at the session “LEADership 101: Informational Session About PPA’s Leadership Excellence and Advocacy Development Program for Pharmacists.”

To schedule a meeting with Melissa during the conference, please click here to contact PHSL.

Are you trying to keep up with the latest from pharma manufacturers and their participation in 340B? Just want to keep your pharmacy 340B compliant? The Health Resources & Services Administration (HRSA) website states, “In order to fulfill the ongoing obligation of compliance, all covered entities are required to provide oversight of the contract pharmacy, maintain auditable records and are expected to conduct, at a minimum, annual audits of their contract pharmacies, completed by an independent auditing firm. Any compliance activity or audit performed by a covered entity that indicates a violation of 340B Program requirements should be disclosed to HRSA … and include the entity’s plan to address the violation.”[1]

With the increasing pushback of manufacturers against the widespread use of contract pharmacies by covered entities (CE) participating in the 340B program, maintaining trust through internal compliance audits is even more critical to 340B program viability.

The following chart provides an overview of the 18 manufacturers who are looking to stop providing 340B discount to contract pharmacies or are looking to receive claims data to avoid paying duplicate discounts.  PHSL has captured key action dates and findings, although the chart may not be all inclusive due to the rapidly changing nature of these events.

340B Manufacturer Updates

PHSL’s 340B Third-Party Audit Service clients include both contract pharmacies and the covered entities themselves.

340B Third-Party Compliance Audit Services for Contract Pharmacy:

PHSL’s role is to ensure that the pharmacy practices comply with covered entity agreements. PHSL’s independent review provides contract pharmacy management teams with insight into the compliance with policies, procedures, and established protocols. Specifically, PHSL services include:

• Validate that contract pharmacies are complying with HRSA 340B regulations and covered entity agreements.
• Help develop the covered entity’s plan to address any 340B Program requirements violations.
• Quantify any discrepancies identified during the audit, provide a risk assessment, and recommend steps for a corrective action plan as needed.

An example of when PHSL has helped a client discover a potential violation during a “self-audit” and address it to remain compliant can be found here.

340B Third-Party Compliance Audit and Related Services for Covered Entities (CE):

In addition to the third-party audit services covered above, PHSL can assist covered entities in standing up in-house outpatient specialty pharmacies that can then access 340B drug pricing.

As more manufacturers are limiting their 340B participation based on contract pharmacy usage, many covered entities are bringing outpatient specialty and retail pharmacy services under covered entity ownership. Our consultants have experience working with several health systems to successfully stand up their own in-house specialty pharmacy.

340B Third-Party Compliance Audit Service for Manufacturers:

More drug manufacturers, eighteen as of July 2022 (see “Timeline of Events” table), are looking to stop providing 340B discounts to contract pharmacies or are looking to receive claims data to better avoid paying duplicate discounts (“double dipping”). Many manufacturer-covered entity agreements allow for auditing of claims data and 340B program compliance. PHSL can assist manufacturers with this claims data review process to audit not only standard program compliance but also ensure that specific manufacturer compliance guidelines are followed.

Who We Are

Pharmacy Healthcare Solutions LLC (PHSL) consultants have extensive healthcare industry knowledge to support clients with business strategy development, primary and secondary research, environmental scans, operational assistance, and leading-edge training programs across these market segments. With our focus squarely positioned in pharmacy and prescription products, we offer clients a 360-degree view of the markets we serve. Our diverse clientele allows us to provide market insights into the business and marketing challenges posed by a rapidly changing healthcare market and enables our consultants to develop strategies and solutions that best meet our clients’ needs.

[1] https://www.hrsa.gov/opa/implementation-contract

Posted September 12, 2022

Fall 2022 Newsletter:

Management of Drug Shortages in the U.S.

In April 2022, PHSL asked website visitors to weigh in on how drug supply shortages in 2022 had changed compared to shortages in 2021. Forty-four percent of respondents believe more products are being impacted in 2022, while another 44% believe the same number of products are being impacted. According to the University of Utah Drug Information Service and reported by the American Society of Health-Systems Pharmacists (ASHP), the total number of active drug shortages in 2022 (262 products) has not yet hit the peak seen in early 2021 (271 products). However, new (recently reported) drug shortages at the midpoint of 2022 are on pace to surpass the number of new drug shortages in 2021, as seen in the chart below.

Source : https ://www.ashp.org/drug-shortages/shortage-resources/drug-shortages-statistics

Publicly available information on drug shortages is available from two main sources:

1. The FDA’s Drug Shortage Staff (DSS), which resides in the Center for Drug Evaluation & Research (CDER).
2. Drug Shortage Bulletins developed by the University of Utah Drug Information Service and distributed by ASHP.

Both organizations report on drug shortages for different purposes and audiences.

While the FDA works to mitigate issues, drug shortages can still occur quickly and unexpectedly. During the early months of the COVID-19 pandemic, an increased demand for critical hospital medications and those treating symptoms of respiratory illnesses resulted in drug shortages. There were also issues acquiring raw materials and packaging, which was being prioritized for COVID-19 vaccines. In response to the pandemic, the FDA Drug Shortage Staff monitored the supply chain, asking manufacturers to evaluate their entire supply chain for potential impact.

However, drug shortages and supply chain issues have been an issue since long before the COVID-19 pandemic. Drug shortages occur for a variety of reasons:

• Manufacturing and Quality Issues
• Production Delays
• Discontinuations
• Increased Demand

The FDA CDER states that its mission is to “prevent, mitigate and alleviate drug shortages,” while the DSS seeks to oversee and facilitate the resolution of all drug shortage situations. The DSS facilitates temporary and long-term strategies, coordinating risk/benefit decisions and distributing shortage information by working with suppliers and facilities.   The FDA maintains a list of current drug shortages, resolved drug shortages, and discontinuations on the FDA website.

In a 2019 report, an FDA Task Force identified three root causes for drug shortages:

1. Lack of incentives for manufacturers to produce less profitable medications
2. The market does not reward manufacturers for mature quality management systems
3. Logistical and regulatory issues make it difficult for the market to recover from disruption

The report also offered three recommendations for enduring solutions to address shortages:

1. Understanding the impact of drug shortages on patients and the contracting practices that may contribute to shortages
2. Developing a rating system to incentivize manufacturers for quality management system maturity (when drug manufacturers have consistent, reliable, robust business process to achieve objectives and promote continual improvement)
3. Promoting sustainable private sector contracts to ensure reliable supply of medically important drugs

The FDA published the draft guidance document “Risk Management Plans to Mitigate the Potential for Drug Shortages” in May 2022 “to help stakeholders develop, maintain, and implement risk management plans (RMPs) to proactively assist in the prevention of human drug product and biological product shortages.” The FDA seeks to address problems by requiring that manufacturers notify the FDA about supply disruptions, delays, discontinuations, and certain manufacturing changes. Manufacturers are required to notify DSS no later than 5 days after a manufacturing interruption and before a supply disruption. If a product will be discontinued by a manufacturer, the FDA requires 6 months advanced notice.

The FDA seeks to prevent shortage by receiving early notification, allowing for the prioritization of products that are medically necessary and maintaining availability when possible. The FDA communicates possible shortage concerns in the market to other suppliers, which prompts them to look at their demand and supply.  The FDA may also consider expedited reviews of company proposals and in rare cases, drug importation from other countries. The FDA has implemented programs attempting to mitigate shortages through outsourcing facilities and has created the “essential medicines list” to reduce reliance on foreign suppliers.

While the FDA helps to prevent and manage drug shortages with a focus on medically necessary drugs, ASHP reports all submitted and substantiated supply issues to provide “practitioner-focused resources to help the healthcare community manage shortages.” ASHP provides frequent updates on shortages, noting available manufacturers, products on allocation, and discontinuations. ASHP states that their information includes “unapproved drugs and unlabeled uses (when well-researched and reported to be safe and effective); recommendations for therapeutic alternatives; drug to drug comparisons and comparisons within individual drug classes; and safety recommendations.”

Respondents to the PHSL poll were split between those that believe shortage will get worse in 2022 and those that believe they will not change. A small number also believe shortages improved in 2022. A closer look at the types of drugs impacted by these shortages may help explain these differing opinions. In 2021 and the first half of 2022, more than 60% of all shortages reported by ASHP were for injectable drugs, which are more likely to be used in a hospital or specialty setting compared to products dispensed in a community setting.

Source: https://www.ashp.org/drug-shortages/shortage-resources/drug-shortages-statistics

Drug shortages occur for a variety of reasons and will continue to present challenges in healthcare. The FDA cannot require a manufacturer to make a drug, but it does have a clear plan to monitor and assist when potential shortages are identified.

On the provider side, ASHP provides valuable information on drug shortages and product considerations to help minimize the effects of shortages on patient care. These organizations have helped to avert drug shortages and provide key details for providers impacted by these shortages, but can more be done? Will a focus on US-based production be the key to minimizing shortages?

Posted September 12, 2022

Fall 2022 Newsletter:

Manufacturer 340B Participation Updates

PHSL Senior Consultant Patty Milazzo and PHSL Intern Arvin Sequeira contributed to the July/August 2022 edition of ComputerTalk for the Pharmacist. In their Viewpoints article, Patty and Arvin discuss both the opportunities and challenges pharmacies, payers, and prescribers may face when incorporating pharmacogenetic testing and data into practice.

Click here to read the article “Pharmacogenetics: Pharmacy Evolution Rolls On.” You can also access the full versions of current and past ComputerTalk issues at https://www.computertalk.com/issue-archive/.

PHSL President Ann Johnson contributed to the July 2022 Pharmacy Management Edition of MedHealth Outlook. In this feature, Ann highlights the importance of drug pricing compendia for pharmaceutical, device, or digital therapeutics companies. Click here to read the article.

Pharmacy Healthcare Solutions, LLC (PHSL) is pleased to announce national recertification as a Women’s Business Enterprise (WBE) and as a Women-Owned Small Business (WOSB) by WBENC East, a regional certifying partner of the Women’s Business Enterprise National Council (WBENC).  This marks three years of WOSB and WBE certification for PHSL.

We know that supplier diversity initiatives are important.  By including women-owned businesses among their consulting support suppliers, pharmaceutical manufacturers, payers, PBMs, and other industry stakeholders demonstrate their commitment to fostering diversity.  PHSL asks any current clients with supplier diversity initiatives to contact PHSL’s principals Ann Johnson or Melissa Krause for a copy of the certification. We would welcome the opportunity to have our WBE and WOSB certification listed with your company!

Founded in 1997, WBENC is the nation’s leader in women’s business development and the leading third-party certifier of businesses owned and operated by women, with more than 13,000 certified Women’s Business Enterprises, 14 national Regional Partner Organizations, and over 300 Corporate Members. More than 1,000 corporations representing America’s most prestigious brands as well as many states, cities, and other entities accept WBENC Certification. For more information, visit www.wbenc.org.

PHSL President Ann Johnson and Vice President Melissa Krause were featured in the March/April 2022 issue of the Pennsylvania Pharmacists Association’s (PPA) publication Pennsylvania Pharmacist. In this feature, Ann and Melissa share their leadership advice and lessons as Principals of PHSL. Both Ann and Melissa are active members of PPA and the Allegheny County Pharmacists Association (ACPA). Click here to read the Leadership Feature, or access the entire Pennsylvania Pharmacist publication here.

There is no doubt that pharmacists’ role in immunizations dramatically increased with the COVID-19 pandemic, as pharmacies administered vaccinations to much of the country’s population.  In addition to solving a public health crisis, at approximately $40 per dose, the Medicare Part B administration fees for COVID-19 initial and booster vaccines created additional revenues for pharmacies.  With declining drug ingredient cost reimbursement rates and negligible dispensing fees, vaccines were a welcomed revenue stream for many pharmacies.

As we approach the annual flu season, another vaccine opportunity will present itself to pharmacies.  Medicare Part B payments for vaccine administration have increased 77%  this year.  For influenza, pneumococcal, and hepatitis B vaccines, the administration reimbursement increased from $16.94 per dose in 2021 to $30 per dose in 2022.  This change is a nice reversal in immunization reimbursement rate trends, after we saw the rate decrease from $20.88 to $16.94 in 2019.

For 2022, the Medicare Part B pharmacy payment for COVID-19 vaccine administration remains at $40 per dose.  Because commercial reimbursement rates often follow the rates set by Medicare, it is expected that this administration rate increase will have wider reaching effects, beyond simply those of the Medicare population.

For the 2022-2023 flu vaccine, two of the four strains included in the quadrivalent vaccine will differ from the 2021-2022 version.  This coming fall, the influenza vaccine will include the following strains:

• H3N2 component: A/Darwin/9/2021 (H3N2)-like virus (for egg-based vaccines) or A/Darwin/6/2021 (H3N2)-like virus (for cell culture or recombinant vaccines)
• Influenza B: B/Austria/1359417/2021-like virus
• Influenza B: B/Phuket/3073/2013 (B/Yamagata lineage)-like virus
• Influenza A: A/Victoria/2570/2019 (H1N1) pdm09-like virus (for egg-based vaccines) and A/Wisconsin/588/2019 (H1N1) pdm09-like virus (for cell culture or recombinant vaccines)

Knowing that two new strains are included should enable pharmacists and healthcare practitioners to have more educated discussions with their patients concerning the importance of receiving the 2022-2023 influenza vaccine.  With the increased reimbursement rates available to pharmacies, we expect that vaccines will continue to play a key role in retail pharmacy profitability, as pharmacies continue to seek alternative revenue streams outside of traditional drug dispensing.

Posted June 28, 2022

Summer 2022 Newsletter:

U.S. Reliance on Foreign Sources of API

Active Pharmaceutical Ingredient (API) production is a complex and global process. APIs are the active biological or chemical components of any drug. The process of converting raw ingredients and turning them into APIs through various chemical, biochemical, or fermentation processes can be expensive and can lead to a considerable portion of the total drug cost. The production of APIs has been concentrated overseas to reduce costs, with 72% of those facilities found outside of the US. In the chart below, we can see the total production of APIs used in the US market.  Interestingly, although not unexpectedly, only 30% of the API facilities used for US drugs comes from North America.

U.S. Food & Drug Administration. (2019, October 29). Safeguarding pharmaceutical supply chains in a global economy. U.S. Food and Drug Administration. Retrieved May 30, 2022, from https://www.fda.gov/news-events/congressional-testimony/safeguarding-pharmaceutical-supply-chains-global-economy-10302019

The below graph shows the API sources of the top 100 brand name drugs in Medicare Part D in 2018.  Although this data is a few years old, we do not expect that significant changes in API origin have taken place since that time.

*Multiple countries may be represented for a single API

Adapted from Levitt, G., & Mueller, L. (2022, January). Not Made in the USA: The Global Pharmaceutical Supply Chain and Prospects for Safe Drug Importation. Pharmacy Checker. Retrieved May 30, 2022, from https://cdn.pharmacychecker.com/pdf/Not+Made+in+the+USA+-+2022.pdf

Comparing the two charts above, a large discrepancy is noted for India and China.  While India and China account for over 30% of the API facilities for all drugs, they account for only 2% of the top 100 brand drugs.  The following table indicates that China and India account for 44% of the kilogram mass of pharmaceutical imports, yet only 11.7% of the dollar value (i.e., generics).  Meanwhile, Germany and Ireland account for 60% of the dollar value and less than 10% of kilogram mass (i.e., brands).

Public Citizen. “China Is the Top Source of U.S. Pharmaceutical Imports, with India and Mexico Also Major Sources.” Public Citizen, 7 Apr. 2020.

The PharmacyChecker report focuses on top brands, and therefore China and India each only account for a single imported brand API.  These results make sense due to the high cost of single-source brand drugs.  Brand companies typically rely on high quality materials from trusted sources and labor to ensure continued supply to avoid disruptions and lost sales, oftentimes from the large number of registered API facilities in Europe.

These APIs, often imported from various countries, are critical to the development of drugs which enter the supply chain to be delivered to patients in healthcare facilities and pharmacies. Errors in containment, contamination, and other aspects of the supply chain can cause drug shortages in pharmacies and hospitals.  These shortages may delay treatment, potentially affecting hundreds of thousands of people. During the pandemic, supply chain issues were abundant. China, which doubled the number of registered facilities producing APIs between 2010 and 2019, has seen many disruptions in supply of its products. 57% of companies reporting worsened lead times in getting their products to the market to meet demand, according to the Institute for Supply Chain.

With supply chain issues being a continued and growing problem for American markets, the FDA suggests the use of new technologies in advanced manufacturing, such as continuous manufacturing or the Emerging Technology Program (ETP), to streamline processes and guarantee safety and efficacy or products. The FDA states that these innovations, “can be used to reduce the Nation’s dependence on foreign sources of APIs, increase the resilience of our domestic manufacturing base, and reduce quality issues that trigger drug shortages or recalls.” With the increasing production of APIs overseas, it is important to consider the supply chain and quality control issues that may arise.  Manufacturers may consider the use of homegrown production of APIs to combat those risks. Domestic supply and European supply of drugs and biologics can alleviate or lessen the risk for these products.

PHSL expects that more manufacturers, even commodity generic manufacturers, will have an increased emphasis on using US or EU-sourced API for their drugs in the future, if the cost is comparable.  The COVID-19 pandemic is a reminder that worldwide events can have a significant impact on Americans receiving their daily medications.

Posted June 28, 2022

Summer 2022 Newsletter:

Vaccine Profitability Increases for Pharmacies