Drug shortages require new approach from industry stakeholders

A BROADER PUSH to prevent drug shortages is taking shape as a variety of stakeholders’ plans start to unfold.

After years of struggling to mitigate chronic shortages of widely used generic drugs, health systems, group purchasing organizations and drug manufacturers are taking a more proactive approach. The aim is to add some stability to a fragile supply chain to improve care and lower costs.

“The crisis we have at the moment is affordability,” said Dr. Amy Compton-Phillips, executive vice president and chief clinical officer at Providence St. Joseph Health, a founding member of provider-owned drug company Civica Rx. “We have got to change the discussion so we’re just not victims of circumstance. We will do it ourselves.”

Bolstered by the support of more than 800 hospitals, not-for-profit Civica unveiled the first two of the 14 generic drugs it plans to deliver this year—intravenous antibiotics vancomycin and daptomycin. It enlisted the help of Xellia Pharmaceuticals, which has been looking to expand its U.S. presence.

Also last week, group purchasing and consulting organization Premier and its ProvideGx subsidiary announced that it has teamed up with Fresenius Kabi to produce thiamine, lidocaine, diphenhydramine, hydromorphone and morphine sulfate. ProvideGx is targeting more than 60 drugs in shortage, beginning with sterile injectables. It partnered with Baxter International earlier this year to produce the blood pressure medication metoprolol.

Drugmaker B. Braun also announced plans to open a new facility in Daytona Beach, Fla., that will produce IV fluids. The $1 billion investment includes improvements and expansion of its existing manufacturing and distribution facilities in California and Pennsylvania.

“We have gotten to a tipping point that is driving these new models, ProvideGx being our latest evolution of this journey,” said Mike Moloney, Premier’s group vice president of integrated pharmacy.

But this new dynamic requires a mindset shift. Manufacturers and providers need to move beyond a transactional relationship to a collaborative one, Moloney added. In addition, some experts question for-profit companies’ resolve if they don’t realize a return on investment.

Many generic drugs are produced by one or two manufacturers as companies have consolidated or opted to produce more profitable products. Those manufacturers are vulnerable to production snags, quality issues, natural disasters or other unforeseen events that can throw off the entire supply chain.

As a result, healthcare costs rise and quality falls. Total drug spending per hospital admission increased by 18.5% from 2015 to 2017, according to a recent report from the American Hospital Association, the Federation of American Hospitals and the American Society of Health-System Pharmacists.

Premier analyzed the consequences of the injectable opioid shortage last year, which affected nearly all of the 116 members it surveyed. More than half said the shortage impacted patient care, including delaying or canceling surgeries or lowering patient-satisfaction scores.

Picking which drugs to start with is difficult given that more than 120 are currently in shortage, according to the Food and Drug Administration.

Civica Rx CEO Martin VanTrieste said it comes down to their level of clinical demand among member hospitals. The initial rollout will also depend on how easily they could be procured from suppliers.

One product the company does not plan to offer in the near future is insulin despite a growing chorus of calls from patients, advocates and lawmakers in recent years to address its surging costs.

VanTrieste said they ultimately decided against it because of the enormous cost, which he estimated at $40 million to $50 million to develop and another $100 million to manufacture.

“We would need to get another stakeholder to put up the capital for us to start that process,” VanTrieste said. ●