Reviewing ASHP's Recommendations to Alleviate Supply Chain, Drug Shortage Issues

Tom Kraus, VP of government relations, ASHP, reviews how the pandemic impacted supply chains and breaks down recommendations by the ASHP, AMA, and other organizations to prevent drug shortages in the future.

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Welcome back to PopHealth Perspectives, a conversation with the Population Health Learning Network where we combine expert commentary and exclusive insight into key issues in population health management and more.

In today's episode, Tom Kraus reviews recommendations to improve supply chain issues overall and reduce the impact of drug shortages during national emergencies.

I'm Tom Kraus. I'm the vice president of government relations from the American Society of Health-System Pharmacists (ASHP) and previously served as the chief of staff of the US Food and Drug Administration (FDA).

Can you discuss the recommendations regarding supply chain issues? What prompted them?

ASHP has been focused on drug supply chain issues for a number of years. This is an issue that our pharmacist members are constantly dealing with, trying to make sure appropriate drugs are available for patients. We work with the University of Utah on a routine basis to track drug shortages nationally.

Because this has been a longtime priority for us, we worked with the American Medical Association (AMA), the American Society of Anesthesiologists (ASA), the American Society of Clinical Oncology (ASCO), the United States Pharmacopeia (USP), and the American Heart Association (AHA) to host a summit last year focused on these issues.

More recently, several of those organizations developed specific recommendations that policymakers could take to address drug shortages.

And how much did the pandemic play into supply chain problems?

The COVID-19 pandemic certainly exacerbated drug shortages. In the early days of the pandemic, acute spikes in need for certain drugs, particularly drugs for critically ill patients such as those on mechanical ventilators, created an enormous spike in demand. That caused its own issues, but more importantly, it highlighted some of these longstanding shortages that exist, particularly for those critical care drugs.

The pandemic also demonstrated that the Strategic National Stockpile, which is a reserve of critical drugs that the United States government maintains, was completely unprepared to respond to a national-scale public health emergency. Those are some of the issues that we try to address in our recommendations.

Can you walk us through the recommendations and how you foresee they might be implemented?

There are several recommendations that the provider organizations, including ASHP, AMA, ASCO, ASA, and USP, developed to respond to and reduce drug shortages in the future.

The recommendations include creating some incentives for manufacturers to adopt new technologies, such as continuous manufacturing and other advanced manufacturing technologies. This would allow drug manufacturers to be nimbler in switching the drugs they are producing on a given line and to be able to create some of the necessary ingredients in the location where they're doing their manufacturing.

Other things can be done to improve the functioning of the Strategic National Stockpile. This is a reserve of drugs that was supposed to be able to provide immediate supply of critically needed drugs during emergencies. The reality that we saw during COVID-19, however, was that it was completely unprepared to respond to a national-scale emergency.

There were challenges like states and health care providers not knowing who in the government to turn to in order to access drugs from the Strategic National Stockpile; not having clear information about what drugs are actually in the stockpile at a given time; and not having a clear process for distributing and prioritizing those drugs. Those are all things we can address, prospectively, so that we are prepared for the next emergency.

We should also make sure we're using the stockpile and preparing it to be able to respond not just to a local disaster, like an earthquake or a hurricane, but to a public health emergency that is nationwide, like another pandemic.

I think there's a lot more opportunity for multinational cooperation around supply chain resilience and incentivizing quality. Right now, a lot of the drug shortages that we see stem from a manufacturing quality disruption.

When a plant has a manufacturing quality problem, that causes the plant to come offline, or one of their suppliers is unable to deliver a product due to a supply chain disruption. This results in an acute shortage, in a short window of time, that we didn't anticipate. There's not a lot of redundancy in the system, so it makes it very hard to pick up the slack in drug supply.

Incentives that allow manufacturers to demonstrate the robustness of their supply chain to their customers, the health care providers, would be very helpful. We think that is something the FDA could shed light on by sharing information about manufacturing quality, which would allow health system pharmacists to make their purchasing decisions based on suppliers that have the most robust supply chain. Right now, we don't have visibility into that, and there's really no way for us to have details.

The last thing I would mention is it's not just about drugs. In some cases, there are medical devices that are also essential to delivery of drugs. Think of things like syringes and personal protective equipment that are important to pandemic response. Those types of medical devices should be subject to the same requirements as drugs.

There are some requirements that Congress recently adopted—things like manufacturers informing the FDA when they anticipate a shortage, and telling the FDA what the reason for that shortage is and how long it is likely to last, so the FDA can coordinate with other manufacturers to try to respond. While some drug manufacturers are subject to those requirements, the medical device manufacturers are not. If you don't have the device necessary to administer a drug, then obviously, that's a problem in and of itself. So let's extend some of those same recommendations to device manufacturers.

Thank you, Tom. Of those recommendations, if you had to pick and choose, which do you think would provide the most benefit, and why?

Long term, I think creating some market incentives for manufacturers to invest in quality would probably have the biggest overall impact.

Keep in mind that a lot of the shortages we see are with relatively low-cost, generic drugs, with a relatively small number of manufacturers. People may think shortages affect some of the brand name drugs, but there's plenty of financial incentives for brand name drug manufacturers to make sure there is always supply.

But that's not the case for a generic drug, where you are making pennies or fractions of a penny per dose. If you're in that situation and you have a manufacturing challenge, you might just decide it's not worth it for you to bring that plant back up, or you might switch to another product that's more lucrative.

Anything we can do that sheds light on where the quality manufacturing is and allows the market to drive additional volume and revenue to those manufacturers that have invested in supply chain—that might be something that helps us create more stability in the long term.

Moving forward, where do you see the future going, in terms of what might exacerbate or alleviate these problems?

Going forward, I think we can alleviate some drug shortages by thinking about how we prepare for the next pandemic. This creates an opportunity for us to look at our policies and say, "Where did we fail during this pandemic? What have we learned, and what are the opportunities going forward?"

There's a real opportunity for policymakers to do things like improve the functioning of the Strategic National Stockpile, and make sure there are good incentives for manufacturers to be investing in the quality of their manufacturing and the robustness of their supply chains.

As we think about this, we should also be sensitive about creating redundancy in supply chains. With the pandemic, there's been discussion about domestic manufacturing of pharmaceuticals. It is a good thing to have a domestic source of pharmaceuticals. No doubt, that is something that we support.

But that shouldn't come at the expense of foreign supply chains. We actually benefit when there are both domestic and foreign sources, so there's always a viable source of product available to health care providers and patients. We shouldn't do anything that undermines currently reliable sources of product.

Is there anything else you wanted to add today?

I would just mention the challenges in drug shortages stem from the pricing and the financial challenges for generic manufacturers, so we should think about both the supply and demand side for incentives.

On the supply side, we have opportunities to improve the situation, like creating incentives for advanced manufacturing and additional manufacturing capacity, both for finished drugs as well as ingredients. We should be sensitive not to disrupt those sources of supply that are working right now, by doing things like mandating that a drug be manufactured in a certain location. That's not going to be productive.

We should also think about if there are ways to hold inventory available if we have by another emergency. The Strategic National Stockpile is one such way to hold inventory available, but the federal government could also incentivize private sector actors to hold supplies. That could be done through group purchasing organizations, distributors, or even health systems.

On the demand side, create incentives in the market for manufacturers to invest in robust supply chains. You could do that by giving purchasers greater visibility into which manufacturers have the best supply chains, so they can reward those manufacturers in the market.

Thanks for tuning in to another episode of PopHealth Perspectives. For similar content or to join our mailing list, visit populationhealthnet.com.

This transcript has been edited for clarity.