Drug shortage stewardship: Calls to action for the interconnected supply chain
When an EF-3 tornado struck the Pfizer Rocky Mount Facility in North Carolina this past summer, it required every stakeholder within the supply chain to pull together to minimize the supply constraints the tornado’s impact could have on the pharmaceutical industry.
Given that nearly 25% of Pfizer's sterile injectables — approximately 8% of all sterile injectables used in U.S. hospitals — were manufactured at the facility, it was certainly an unprecedented disaster that could have taken a turn for the worse. Pfizer, along with the Food and Drug Administration (FDA) and Vizient, worked closely to assess and communicate the impact, as well as provide recommendations for mitigating the challenges healthcare providers would face. (Fortunately, after careful evaluation and onsite assessment, Pfizer determined that the tornado primarily impacted the warehouse facility and manufacturing at the facility has since resumed.)
This natural disaster highlighted the interconnectedness of the entirety of the supply chain by showing the tornado’s effects on Pfizer’s supply downstream and the actions taken to mitigate those challenges. Even more so, it highlighted the importance of how the supply chain must communicate and act during unanticipated disasters and disruptions.
Drug shortage stewardship (DSS) is one way healthcare providers, suppliers and manufacturers can work to mitigate the ever-increasing challenges posed by drug shortages. But, let’s first take a closer look at the inner workings of the supply chain.
The interconnectivity of the supply chain
The FDA, healthcare providers, suppliers, manufacturers and group purchasing organizations (GPOs) are a few of the stakeholders who play a significant role in the pharmaceutical supply chain, making it both complex and heavily interconnected. It also means that communication and collaboration are vital. So, when any of these stakeholders works within a silo or fails to operate with transparency, there is a risk that something could go wrong.
Several calls to action based on the principles of DSS are outlined below.
Drug shortage stewardship (DSS) is a coordinated program to collectively limit the severity of a drug shortage at the national level by reducing the utilization of the affected drug at the local level.
Embracing DSS can mitigate additional disruption types such as a supply-driven, demand-driven or mixed-picture drug shortage.
DSS can also help limit the "debound effect", which occurs when overactive protective purchasing on the front end impacts the manufacturers and suppliers on the back end.
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Review definitions for Drug Shortage Stewardship, protective purchasing and debound effect to gain a better understanding of how DSS could be implemented within your organization.
Review current practices and implementation strategies for mitigating drug shortages at your organization.
The good news: DSS and protective purchasing
While the supply chain may feel complex, the good news is that there are still methods that can be implemented to mitigate a drug shortage.
Drug shortage stewardship (DSS) is a coordinated program to implement strategies, including inventory and mitigation practices, to collectively limit the severity of a shortage at the national level by reducing the utilization of the affected drug at the local level. In essence, if we all work together, we can better moderate drug shortages.
This is because whenever any member of the supply chain works within a silo or doesn’t embrace DSS, it can cause additional disruption types such as supply-driven, demand-driven or mixed-picture drug shortages, and could even lead to the “debound effect.” The debound effect is a newly-identified term that describes what happens when overactive protective purchasing — which occurs when hospitals and health systems purchase more than the average daily usage of a product on shortage — on the front end impacts the manufacturers and suppliers on the back end.
Protective purchasing makes it challenging for suppliers or manufacturers to accurately predict customer demand of a drug on shortage, so instead of basing manufacturing off historical purchasing trends and rebuilding the market with the appropriate product amount, manufacturers find themselves overproducing and underselling.
But protective purchasing isn’t inherently a bad thing. If implemented appropriately and responsibly, it can ensure availability of medications to treat patients in the current shortage landscape. However, inappropriate protective purchasing outside of the DSS framework can lead to severe, extended shortages, especially in instances where an extraordinary demand is triggered. Supply — side solutions, such as drastically increasing supply, cannot keep up with inappropriate protective purchasing. As a result, the supply chain breaks down and patients do not receive the medications they need. But coupled with DSS, appropriate protective purchasing can provide stability and limit market variations.
With the entirety of the supply chain backing DSS, we all can make a dent in drug shortages, slow their spike and one day end them for good. But it all starts with understanding how the supply chain is interconnected and then working towards a healthier healthcare for all.