News & Events

PHSL President Ann Johnson, Vice President Melissa Krause, Co-Founder Tim Kosty, and Senior Consultant Patty Milazzo will be attending the 2023 NACDS Total Store Expo in San Diego, CA on August 12th – 14th. PHSL will have an exhibit set up at booth #3240. If you would like to schedule a meeting with a PHSL team member, please click here to send us a message.

To learn more about this conference, visit the Total Store Expo website at http://tse.nacds.org

In March 2023, Lilly, Sanofi, and Novo Nordisk all announced that they will be lowering prices for several of their key insulin products.  To accomplish these price reductions, the three manufacturers have announced list price cuts ranging anywhere from 65% to 78%.  This news comes on the heels of the January 2023 introduction of the Inflation Reduction Act, which capped insulin out-of-pocket costs at $35 for Medicare beneficiaries.  This news also comes two years before the Medicare drug price negotiation program, which is slated to begin in 2026 and where insulins have the potential to be a drug included in negotiations. Another driving force for this change could be the American Rescue Plan Act of 2021, which removed the cap on rebates that manufacturers pay to Medicaid.  By proactively lowering prices now, insulin manufacturers may eliminate the risk of paying greater than 100% of AMP for Medicaid patients.

What Insulins are Included in the Price Cuts?

Based on a Novo Nordisk press release, “cutting the list price” seems to be equated with lowering the products’ Wholesale Acquisition Cost (WAC).  Using the publicly released price reduction percentages from each of the three manufacturers, PHSL predicts that the new WAC prices for key insulins will be as illustrated in the following table; however, PHSL notes that these newly anticipated WAC values are based on the current WAC values, and do not take into account any manufacturer price changes that could occur prior to the implementation.

Who Decides Which Insulin Prices to Cut?

While there have been various legislative and policy changes driving this concept, as with all drugs, it is ultimately up to the individual manufacturer to decide how to price their products. The insulin products noted in PHSL’s table are those that have been publicly stated as having price reductions applied. The manufacturers included in this list may or may not choose to reduce prices of their other insulin products. Other manufacturers may choose to reduce prices of their insulin products in the future.

Out-Of-Pocket Costs

The Inflation Reduction Act had already capped insulin out-of-pocket costs at $35 for patients with Medicare.  However, in addition to reducing the list price of their insulin products, Lilly has also announced that they will cap insulin out-of-pocket costs for commercially insured patients at $35, when prescriptions are filled at participating retail pharmacies.  Sanofi has pledged to do the same for Lantus.  Since manufacturers cannot dictate how payers set their patient copay amounts, how this will be operationally implemented for commercially insured patients has not yet been determined.  PHSL suspects that manufacturers may use e-vouchers to accomplish this.

The Improving Needed Safeguards for Users of Lifesaving Insulin Now (INSULIN) Act of 2023 was recently introduced in the U.S. Senate on April 20, 2023.  If passed, the bill would require health plans to cap out-of-pocket insulin costs at $35 for commercially insured patients in 2024.  In 2025, out-of-pocket costs would be calculated as the lesser of $35 or 25% of the list price for a 30-day supply.  With the newly lowered list prices from Lilly, Sanofi, and Novo Nordisk, 25% of the list price would often fall below the $35 threshold.  The bill indicates that pricing would need to apply “for at least one insulin of each type,” but how an insulin type is defined (i.e., long acting vs. short acting, unique active ingredient, etc.) is unknown.

Price Cut Implications

With most of the price cuts going into effect in 2024, PHSL would expect that manufacturers reduce or eliminate rebates for these insulin products.  For payers who have a large population of patients with diabetes and who rely heavily on rebates, a decrease in rebate dollars should be planned for and expected in the 2024 plan year (although the decrease in rebates is likely to be at least partially offset by lower plan paid costs upfront).

From a patient perspective, those with high prescription deductibles will benefit the most.  Once deductibles are met, commercially insured patients likely have copays at or below $35 today, and copay cards are prevalent for the above-mentioned insulin products.  For uninsured patients, Lilly, Novo Nordisk, and Sanofi all offer patient assistance programs or savings programs.  Thus, PHSL does not expect that the new price changes will have a significant impact on patient costs, except for those with high deductibles.  What are your thoughts on the newly announced insulin price reductions?  How will the price decreases impact industry stakeholders?

Posted May 16, 2023

Spring 2023 Newsletter:

Cutting Through the Online Noise – Social Listening: What Is It and How Can Pharma Benefit?

Have you been noticing the recent online chatter about weight loss drugs?  It is difficult to ignore!  That online chatter and the power of social media influencers have created unexpected market upheaval, including regional drug shortages and patients unable to secure their needed medication. Whether it is social media sites, apps, a favorite online influencer, or your trusted health site, someone is providing information, accurate or otherwise, or opinions about your product.

PHSL recently assisted a major pharmaceutical company in performing a robust dive to identify and monitor sites that present that manufacturer’s product information to healthcare professionals and consumers.  This is social monitoring. PHSL analyzed this information to determine why it was being presented to healthcare professionals and consumers. This is social listening. Monitoring is what is being said and where. Listening is analyzing to determine the why.

Social media has become an untapped wealth of information that should be monitored and analyzed.  It provides vital information, such as opinions and promotions of consumers online, which cannot be found in traditional data sources. Social listing can allow for the discovery of inaccurate, missing, and potentially dangerous product information in these sources.

Research

Manufacturers can use social listening to better understand the opinions of their products, address any negative opinions, and stay ahead of the curve by being the first to recognize trends in the industry, which may drive unanticipated financial and regulatory issues.

It is common for people to consult social media whenever they are faced with a health issue. A recent study published in the Journal of Medical Internet Research looked at inflammatory bowel disease (IBD) social media posts; over 55% of the posts included in the study were related to medication advice, beliefs about safety of IBD medications, personal experiences with medication use, or fears or anxieties about the safety of IBD therapies.  Manufacturers who are aware of specific concerns would be able to set themselves apart by addressing such concerns.

Manufacturers who utilize social listening would also be able to understand and respond to some of the buzz surrounding their products.  Take metformin, for example; nearly all healthcare professionals think of diabetes whenever metformin is mentioned, yet there is intrigue coming from Americans consumers concerning off-label uses of the drug, none of which have anything to do with diabetes.  This interest is fueled by information shared on Tik-Tok, Instagram, and health-focused blogs. Social media influence has created an enormous demand for drugs that are commonly used for the treatment of diabetes or obesity, in an effort to lose weight. Hashtags of various drug names have blown up on social media. One drug hashtag has over 600 million views and counting.

FDA and Social Media

Did you know even the FDA performs widespread social monitoring and listening?  One way the FDA is harnessing the power of social listening is to monitor and track drugs of concern.  Paula Rausch, the Associate Director of Research and Risk Communications in CDER’s Office of Communications, says the “CDER has begun to use nontraditional sources to explore the social contexts in which substances are being used, as well as to identify potential drugs of concern that may be emerging. These data can provide clues about the dynamics of use, misuse, and abuse, and potentially identify changing patterns.”  The FDA is currently monitoring more than 95 million online and social media sites.

More information on the FDA’s process can be found here.  FDA has issued guidance on social media content and a summary can be found here.

Pharmaceutical Social Monitoring and Listening

Actionable market insights are expanded through the inclusion of social monitoring analytics. Evaluation of current and future marketing strategies should incorporate the potential market dynamics of social media. Product information presented on professional, industry, and consumer-driven sites may have an effect on production and product availability planning. Off-label claims and other regulatory or legal issues may be identified as having the potential to skew current market analysis.

What exactly is the role of social listening in the pharmaceutical industry?  It seems prudent for a manufacturer to identify and monitor high-priority web sites that may publish incorrect or incomplete information about their product, especially as the FDA is also monitoring these sites.  This is important so that healthcare professionals and patients have access to the most complete and accurate product information. The results of a social listening analysis provide manufacturers with the knowledge to understand the opinions, both positive and negative, around their products on professional and patient healthcare locations.

Getting Started

The exponential growth of social media, relevant websites, and healthcare apps will only continue. Social listening can uncover invaluable information, but it is often difficult to know where to start and what to do with the findings. The different types of information retrieved must be efficiently and accurately categorized into insightful information, which can be analyzed to ultimately create the greatest benefit.  PHSL can assist in the identification and selection of online listening sites in alignment with your company’s strategy, followed by the analysis and recommendations for mitigation if necessary. Trend analysis can be performed over time for newly launched products, high-priority, or high-risk products. PHSL can focus on disease-specific or professional practice sites.

PHSL has experience helping manufacturers engage in social listening and providing strategic recommendations based on our findings.  Let us know if we can help!

Posted May 16, 2023

Spring 2023 Newsletter:

Insulin Price Cuts – What’s Included and What’s Not

PHSL Consultant Alan Sekula contributed to the January/February 2023 edition of ComputerTalk for the Pharmacist. In his Viewpoints article, Alan discusses components of the Inflation Reduction Act related to pharmacy and prescription drugs, including negotiated prices, price increase greater than inflation, benefit design and premium maximum increase, vaccine coverage, biosimilar reimbursement, and insulin payment cap.

Click here to read the article “The Inflation Reduction Act Impact on Prescriptions.” You can also access the full versions of current and past ComputerTalk issues at https://www.computertalk.com/issue-archive/.

It’s back…PHSL’s annual review of the big 3 PBM formulary exclusion list updates! Express Scripts (ESI), CVS Caremark, and OptumRx published their formulary exclusions for January 2023. Based on PHSL’s review, OptumRx leads the way with over 77 new formulary exclusions. ESI added 36 new exclusions, while CVS Caremark only excluded an additional 26 drugs. Although CVS Caremark excluded nearly 30 new drugs, they anticipate that 99.72% of their clients will not be impacted by any medication changes because of these formulary removals. The January 2023 exclusions, as researched by PHSL, are as follows:

During the review, PHSL made the following observations:

• ESI focused more attention on anticonvulsant agents. Examples of exclusions in this category include Banzel, Onfi, Klonopin, and Vimpat.
• CVS Caremark’s focus was on chemotherapy agents, such as Rubraca, Sutent, and Alimta.
• OptumRx focused on autonomic and central nervous system agents. Specific agents excluded by OptumRx are Daytrana, Ponvory, and Quillichew ER.
• All three PBMs excluded numerous respiratory products. CVS Caremark excluded Flovent Diskus, instead preferring Flovent HFA or Pulmicort Flexhaler. OptumRx excluded generic fluticasone-salmeterol products in favor of Advair Diskus, likely due to rebates.  OptumRx also excluded Dulera, Incruse Ellipta, Tudorza, Bevespi, and QVAR Redihaler.  Like OptumRx, ESI excluded Incruse Ellipta and Tudorza Pressair in favor of Spiriva.  Although many of these changes are likely rebate driven, from a clinical perspective, the Global Initiative for Asthma (GINA) guidelines were also updated in 2022 and now seem to generally prefer the combination of formoterol paired with an inhaled corticosteroid when an inhaled corticosteroid is prescribed.
• Both OptumRx and ESI excluded the Glucagen Hypokit for 2023, while the product was already excluded by CVS Caremark in 2022.The Glucagon Emergency Kit manufactured by Eli Lilly is the preferred alternative for each of these PBMs. ESI specifically notes that the Fresenius brand of the Glucagon Emergency Kit is also excluded, with only the Eli Lilly Glucagon Emergency Kit being a preferred alternative.
• As CVS Caremark did in 2022, ESI greatly restricted coverage of diabetic supplies and needles. Any insulin needle or syringe that is not BD Diabetes brand is excluded by ESI in 2023. PHSL suspects that this change is largely rebate driven.
• OptumRx still requires prior authorization for Hepatitis C, Multiple Sclerosis, and Immunomodulator treatments. In 2022, OptumRx changed many of their preferred agents by replacing Simponi Aria and Renflexis with Avsola as a preferred immunomodulator. Kesimpta and dimethyl fumarate DR replaced Tecfidera for multiple sclerosis preferred treatments. There was no change in preferred Hepatitis C medications. For 2023, no additional changes are expected.
• CVS Caremark excluded brand Narcan after previously covering the opioid reversal agent. Although no alternative agent was listed, PHSL suspects that the change is due to the introduction of numerous generic agents.
• As mentioned in our 2022 Exclusion List Review, ESI continues to use indication-based management for the “inflammatory conditions” drug class. There are no additional excluded medications this year.

Each of the major PBMs have taken a different approach to managing drug expenditure in 2023, with formulary exclusions continuing to play a significant role. PBMs exclude products because of clinical, financial, and humanistic reasons. Each PBM makes value judgements and determines what coverage is no longer warranted. This article represents PHSL’s analysis of publicly available information regarding the three PBM’s formulary exclusion for 2023. Readers are encouraged to assess the lists for themselves, using the formulary and exclusion list source information provided in the links below.

• CVS Caremark 2023 Formulary
• ESI National Preferred Formulary 2023 Exclusions
• OptumRx 2023 Premium Formulary Exclusions
• CVS Caremark Formulary Watch
• CVS Caremark 2023 Formulary Updates

Posted January 11, 2023

Winter 2023 Newsletter:

Dispenser Track and Trace: Applicability to Patients

The Drug Supply Chain Security Act, also known as the Track-and-Trace Law, has been a topic of discussion for almost a decade. The FDA announced their 10-year plan in November of 2013 with the goal that each drug product would be traceable from the moment it was manufactured to the moment it was dispensed to the patient. The end of this 10-year roll out is in sight. The FDA set a compliance deadline of November 27, 2023, with pharmacies being the last stop in this journey.

The FDA implemented multiple staged deadlines throughout the past 10 years, with the first step in 2017 being manufacturers’ development of a 2D barcode that records the product NDC, serial number, lot number, and expiration date. Since then, repackers, wholesalers, and pharmacies have adapted their systems and workflow to comply with the new 2D barcode and tracking regulations. The goal is to directly identify recalled or suspect products and those who directly handled and received them.

The focus is now on the dispenser, i.e., pharmacy or healthcare facility. Review of the regulations is generating discussion around patient level tracking and potential best practices. Currently, the FDA only requires pharmacists to:

1. Confirm that the entities you do business with are licensed and registered.
2. Receive, store, and provide transaction history, transaction information, and transactions statements (3Ts). The 3Ts must be stored for at least 6 years. When dispensing to another entity instead of to an individual patient, such as dispensing to an ambulance service, the 3Ts must be provided to first responders or the other pharmacy. If a pharmacy transfers a product to another pharmacy that is not for a specific patient, the pharmacy may need to register as a wholesaler in the future.
3. Investigate and handle any suspect or illegitimate products.
4. In the event of a recall, upon request by the FDA or other appropriate Federal or State official, the pharmacy must provide the 3Ts for that product within two business days.

Each of these requirements are not cut and dried. Pharmacies must upgrade their software and modify their workflow to meet these standards. In addition, new guidance has been published by the FDA exempting certain products from this Act, including naloxone and some COVID-19 treatment and prevention products.

Many large chain pharmacies and hospital networks already have barcode scanning and inventory systems implemented into their workflow, but some of these systems only work with linear barcodes. Third-party tech companies have jumped into action offering new technology to fill this need. For large companies, the financial commitment is understood, but for small independent pharmacies, the financial burden of meeting these requirements could be substantial.

The DSCSA 10-year plan ends with the dispenser, but industry leaders question the process being implemented by certain pharmacies. The purpose of this law is to improve the safety of the patient, so why not extend this practice to the patient level? Extending to the patient level comes with numerous benefits, but also many concerns. In terms of patient safety, those affected by a recall or illegitimate product could be directly identified and notified sooner, avoiding the need for a patient to make a trip into the pharmacy or an unnecessary phone call. This allows the pharmacist to focus on the patients truly at risk.  Patients not at risk could still be a part of the notification for peace of mind, removing any patient uncertainty. If the tracing system is automated, time pharmacy personnel previously spent checking the shelves for recalled products would be alleviated. That time can be focused on other areas of demand, like point-of-care testing.

So, how would pharmacies extend this to the patient level? Pharmacy leaders first need to ensure that their technology and software can scan 2D barcodes and link the product information to a patient profile. Ideally, the system would be able to generate a report listing each patient that received a certain NDC, lot #, and expiration date. In the pharmacy workflow, pharmacy personnel would queue a prescription to be dispensed and added to a patient profile, scan the 2D barcode, and fill the prescription just as they do now. All the changes would occur behind the computer screen. The software would generate an inventory of all products received and the 3Ts for each product. Hypothetically, if a recall is issued, the system would identify if the pharmacy even received the product and then determine who the pharmacy dispensed the product to and generate a report. The next question is how does the pharmacy notify the affected patients? Just as many systems now notify the patient via phone call, text message, or email that their prescription is ready for pick-up, the pharmacy systems would do the same with recall information.

This idea sounds great in theory, but the costs required to develop, test, and implement new software may be prohibitive.  Additional resources would also be needed to retrain employees. The accuracy of the information within a patient profile is a key component, since this would be how the patient is notified. It would be vital for pharmacy leaders to discuss and formulate a plan before extending to the patient level.

The Drug Supply Chain Security Act has reshaped the pharmacy industry to ensure patient safety. Pharmacy leaders have overcome many challenges throughout this journey, but a lot of work is still needed to meet the November 27, 2023 deadline and before pharmacies can implement tracking at the patient level. The FDA has yet to budge on the November 2023 deadline, so PHSL encourages organizations to talk with their software vendors or IT support to ensure necessary steps are being taken to meet the requirements before this deadline. PHSL also encourages pharmacy personnel to be prepared to demonstrate their ability to access the 3Ts data upon an FDA or Board of Pharmacy inspection.

PHSL has written about Track-and-Trace since President Obama signed this Act in 2013. Please see the below publications for more information:

https://phsirx.com/news-events/phsi-newsletters/track-and-trace-implementation-update

Posted January 11, 2023

Winter 2023 Newsletter:

2023 Formulary Exclusions Lists: A Review of Express Scripts, CVS Caremark, and OptumRx

PHSL Co-founder Don Dietz and PHSL Vice President Melissa Krause contributed to the November/December 2022 edition of ComputerTalk for the Pharmacist. In their Viewpoints article, Don and Melissa share their predictions on what is to come for pharmacy in 2023, including changes in pharmacy business, drug prices, payment models, pharmacy participation in PBM networks, benefit designs, and biosimilar use.

Click here to read the article “A Blank Canvas: Prognostications for 2023.” You can also access the full versions of current and past ComputerTalk issues at https://www.computertalk.com/issue-archive/.

PHSL Senior Consultants Patty Milazzo and Dave Schuetz contributed to the September/October 2022 edition of ComputerTalk for the Pharmacist. In their first Viewpoints article of a series, Patty and Dave discuss the FDA’s proposed solution to changing the NDC structure, an explanation of the stepped, multiyear approach, and key projected dates for the multiphase implementation.

Click here to read the article “Understanding the FDA’s Plans for NDCs.” You can also access the full versions of current and past ComputerTalk issues at https://www.computertalk.com/issue-archive/.

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