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Coping With Drug Shortages: How Payers and Manufacturers Can Support Continued Patient Access

By Julia Scanlan and Brian Quirante

The COVID-19 pandemic illuminated a challenge to the U.S. healthcare system that continues to undermine effective patient care: medication shortages.  A Senate report found that drug shortages increased nearly 30% last year, with a record five-year high of 295 active drug shortages by the end of 2022.

Most recently, these shortages include drugs used to treat ADHD, common over-the-counter children’s cold and flu medicine, and even a drug intended for diabetes treatment, which was used off-label to meet the tremendous demand for weight loss medications.

Supply shortages like these are caused by a myriad of factors, including increased demand, supply chain issues, and supplier issues, which are exacerbated by the fact that nearly 80% of the manufacturing facilities responsible for making active pharmaceutical ingredients are located abroad. Shortages have cascading effects on patient access to medication, increasing delays in treatment and the risk of medication errors—not to mention the inaccessibility of sometimes life-saving therapies.

In the face of this ongoing challenge, there are several ways payers and manufacturers can respond to minimize negative patient experiences.

Alternative therapies and open formularies

Firstly, once the FDA or the American Society of Health Systems Pharmacists (ASHP) announces a drug shortage, payers can take a reactive approach by ensuring the affected product has an adequate alternative—such as a generic formulation or another option in the same therapeutic class—available on formulary. This is especially important for diseases and conditions where the continuation of therapy is critical, such as oncology.

Another approach, which many payers have taken in recent months, is to allow open access on branded products. A MMIT Rapid Response survey found that many payers considered circumstances such as “a generic shortage” or “shortages/supply issues” as appropriate for allowing a branded drug to stay on formulary.

Payers can also take a proactive approach by improving communication efforts with manufacturers and regulatory bodies, both nationally and internationally, to forecast potential or even perceived shortages. Perceived shortages can be stirred up by the media, or by patient experiences at a pharmacy that doesn’t have a certain medication in stock. In these cases, patients may begin stockpiling medications, even when they’re not due for refills, which can eventually lead to an actual shortage.

Utilization management adjustments and provider education

Secondly, payers may use utilization management, such as prior authorizations, to ensure that a product is being used for its intended indication. A recent MMIT Message Monitor survey offered some insight into this, with payers noting that they would seek to temporarily add and/or prefer products to replace drugs in the same market basket that were in short supply.

In other cases, payers might need to tighten their access restrictions. The widespread popularity of Ozempic, a drug used to treat Type 2 diabetes, drove up demand for the product as a weight loss tool, which profoundly impacted its supply chain. By enforcing stricter policies, payers could prevent future access issues by ensuring drugs are prescribed and dispensed only for their intended use.

Manufacturers should also bear the burden of due diligence by educating prescribers on the need for ordering the appropriate drug for the correct indication.

In this scenario, Ozempic’s manufacturer, Novo Nordisk, could have driven prescribers towards its Wegovy product, which shares the same molecule as Ozempic but is indicated for weight loss. It is important to note that while Ozempic and Wegovy’s respective FDA approvals were years apart, time and resources are always required to ensure the safety of a molecule’s new indication. In such situations, the onus is on the manufacturer to appropriately communicate this timeline with prescribers and payers, so the off-label risk can be accounted for.

Expedited drug reviews and a proactive approach

Lastly, at the federal level, both nationally and internationally, payers and manufacturers can work together to lobby for expedited drug reviews. Before a product launch, a country’s regulatory authority reviews new products to determine if they comply with quality standards. This is an unnecessarily lengthy and costly process which ultimately delays the production of new therapies.

If regulatory parties agree to an expedited review process, governing bodies such as the FDA can accelerate the process of alternative therapies through a variety of means, including abbreviated new generic drug applications. To boost production of new market entrants, governing bodies might also exclude high fees for manufacturers for novel, high-value therapies.

Good prescribing practices and stable supply chains can both be addressed to resolve our current issues with drug shortages. In order to be prepared for future events, however, it is imperative that manufacturers, payers, and regulatory bodies have an open dialogue on how to best maintain a balanced supply and demand. Together, they can provide resources and education to both providers and patients to ensure patients have a steady access to their therapies.

© 2024 MMIT
Julia Scanlan

Julia Scanlan

Julia Scanlan is an Associate Consultant at MMIT.

Brian Quirante

Brian Quirante, PharmD, is a Senior Consultant, Advisory Services at MMIT.

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