Healthcare supply chain preps to avoid drug shortages

The healthcare supply chain is taking steps to address potential drug shortages during the Covid-19 pandemic, including working with government agencies to develop allocation strategies as well as prioritize approvals and inspections to help expedite increased capacity in the channel. 

The actions are vital steps at a time when drugs essential to providing care for Covid-19 patients are in or very near shortage, according to a survey by Charlotte, N.C.-based healthcare company Premier Inc., released this week. Premier surveyed its member network, which includes hospitals, health systems, long-term care facilities, and retail pharmacies, and analyzed its own purchasing and fill rate data to determine which drugs may be in jeopardy and outline steps the supply channel can take to address potential problems. The firm identified 15 drugs that experienced the greatest spikes in demand during March but were also unable to be supplied in the requested quantities—two early warning signals for shortages, according to Premier. 

The drugs include antimalarials and antivirals that may be effective in treating Covid-19 as well as antibiotics used to cure infections, bronchodilators for keeping airways open, and sedatives and neuromuscular blockers used to intubate patients. A Premier spokesperson said the data underscore the need to take proactive steps and do not indicate that any hospitals have been unable to treat patients due to a lack of needed drugs.

“Increased demand for these products will clearly put pressure on manufacturers’ safety stocks, creating shortages that could worsen with time unless we take fast action now,” Premier President Michael J. Alkire said in a statement releasing the survey data. “For commodity products, we can tap adjacent industries to begin production. But drug manufacturing is highly regulated, and it typically takes years and substantial investment to build additional capacity and gain U.S. Food and Drug Administration (FDA) approval. Even if the FDA expedited approvals, inspections, and other actions, drug manufacturing cannot be stood up overnight. Moreover, there are also secondary concerns about where replacement ingredients will be sourced, as many of these drugs rely on active pharmaceutical ingredients (API) from overseas.”

Supply chain companies are taking action to address those issues now. Premier, for one, is working directly with the FDA, Health and Human Services (HHS), Drug Enforcement Agency (DEA), and Federal Emergency Management Agency (FEMA) on a set of solutions aimed to keep supply lines running. 

“For example, [we have] received confirmation that the DEA has granted quota allocation requests from several manufacturers and 503B outsourcing facilities to help increase inventory for [the pain medication] fentanyl,” Soumi Saha, senior director of advocacy at Premier, said Wednesday. “As of Monday, FEMA also created a pharmacy-specific workstream to address concerns with shortages and develop an action plan to mitigate shortages of these critical drugs.”

Premier is recommending a set of actions that includes a “dynamic allocation process” that matches available supply to areas with the greatest need. Such a process should balance Covid-19 surge demand in hospitals with the consistent demand from non-acute and retail pharmacies whose patients utilize the needed drugs for chronic conditions, Alkire also said.

Premier’s recommendations include: 

• Allocation: Allocations cap orders to prior historic purchasing. Working alongside private sector partners, the nation needs a dynamic allocation process that accounts for surge demand and prioritizes the needs of acute care providers.

• Accessing the Strategic National Stockpile (SNS): The current process for accessing the SNS is cumbersome and state-specific. Working alongside private sector partners, the [Trump] Administration should create a streamlined and efficient process for accessing drugs from the SNS.

• Drug Enforcement Administration (DEA) Quotas: Ramping up production for controlled substances is contingent upon DEA allocating additional quota. The DEA should temporarily increase the threshold for allocating quota to provide added flexibility and avoid bottlenecks.

• Transportation: Active pharmaceutical ingredients and finished dose drugs that are produced overseas may be delayed in arriving to the U.S. due to port closures or other shipping delays. The government should leverage air transport to expedite transportation of necessary products.

• Transfers: Health systems should be allowed to temporarily transfer drugs freely between hospitals or other pharmacies without having to obtain licensure to distribute products. This will allow supplies to flow freely between entities in greatest need.

• Safety Stock: The current inventory levels and available safety stocks for critical medications is unknown. Working with private sector partners, the FDA needs to create a centralized data repository quantifying inventory levels for critical medications.

• Domestic Capacity: To ramp up domestic manufacturing, FDA should leverage line and tech transfers to expeditiously increase domestic manufacturing of critical drugs at U.S.-based pharmaceutical manufacturers. The President can utilize the Defense Production Act to speed the process.

• Manufacturer Incentives: Manufacturers may be hesitant to enter the marketplace for shortage drugs due to uncertainty that their products will be purchased. FDA should collaborate with private sector partners, such as Premier’s ProvideGx program, to create incentives for manufacturers to enter the marketplace through committed volume and/or co-investment.

• API Continuity: The FDA should leverage the new authority granted under Section 3112 of the CARES Act (HR 748) to require API manufacturers to begin reporting supply disruptions immediately. The FDA should also leverage this new authority to require manufacturers to disclose their exact API sources and locations of finished dosage drugs. This information will help prioritize drugs for domestic manufacturing.

• Capital Constraints: Manufacturers and distributors may be hesitant to increase inventory levels due to financial constraints. The Administration should consider providing 0 percent interest loans to these entities to accommodate surge demand.

Company officials added that shortages are most common in the hospital setting and are most acute in New York, where the majority of Covid-19 patients are receiving care.

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