Causes and cures for prescription drug shortages

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Leslie Lotano-Saba

The cyclone that hit the prescription drug industry may now seem in the distant past, but the events we’re about to discuss were set in full motion only two years ago. At the onset of the pandemic, there was widespread concern among patients who were worried about whether they’d be able to get their prescriptions filled. A common reaction to this was to stockpile the necessary meds, as people did with household paper products, shelf-stable food and other everyday needs. The spikes in demand were off the charts and concurrently, as the public health emergency took hold, certain restrictions were modified or lifted that further enabled stockpiling. One example of this was that refill-too-soon edits were relaxed, thus allowing early refills. In short, there weren’t enough prescription drugs to meet demand.

While mid-March 2020 saw an immediate reduction in the use of medical services and lowered demand for many drugs, drug utilization soon jumped back up, faster than medical services. Some people were seeking cough and cold drugs to treat COVID-related illness, but as more people got vaccinated and medical offices started re-opening, people gradually began addressing the tests and treatments for conditions that they had put on hold during the initial panic. The uneven demand disrupted pharmacy inventories, and coupled with distribution issues, created and exacerbated prescription drug shortages. As COVID variants spread, with demand not letting up, and with no end to the pandemic in clear sight, these shortages caused strain on the whole system.

Supply and staffing issues

We’ve taken a brief look at demand. Let’s now review its counterpart, supply. There’s no doubt that supply chain issues also greatly disrupted the pharmacy industry, specifically its product and people resources. Many drug manufacturers depend on other countries for raw materials, and amid a global pandemic, supply was naturally an issue, as virtually every nation in the ecosystem struggled to meet its own people’s needs.

Additionally, some companies in the drug supply chain shifted from producing particular drugs to placing their efforts into vaccine development or other drugs in high demand due to COVID — antibiotics, inhalers, cough and cold drugs, vitamins, and so on. Then, as has been covered extensively, we saw shipping container delays as ships were stuck in port or, in one case, the Suez Canal, causing delays and massive economic loss. Upon arrival, there were then further delays due to truck driver shortages.

On top of these supply and demand issues, the pandemic brought fluctuating pharmacy staff shortages — another considerable factor in throwing off drug inventories. Pharmacies experienced added workloads for vaccine testing and administration. This, on top of the mass spread of the virus, which caused staffing shortages due to illness, pressured some pharmacies to reduce their hours or even close completely. With limited staff and fewer points of checks and balances, errors become more commonplace, creating a domino effect of stress on these skeleton crews as they tried to fill too many roles in the pharmacy setting.

Did COVID indirectly cause the Adderall shortage?

While other drug shortages have been reported on, Adderall and its generic equivalent drugs for ADHD are currently in especially short supply — again due to supply and demand. On the demand side, ADHD diagnoses have been on the rise for the last decade for children and adults alike. It has been reported that there has been a spike in ADHD diagnoses because of remote learning, a kind of COVID tipping point, and the symptoms have been noticed by parents also trying to work from home. All of that ADHD has caused a huge demand for Adderall and similar alternatives.

On the supply side, this drug is a controlled substance. As such, it carries additional government restrictions in terms of manufacturer allotments of raw ingredients and production quotas. Another factor is that due to lower cost, generics are generally preferred over branded drugs by health plans. Patients with ADHD diagnoses now have to wait for generics, or else request an override from the insurance company to get the more expensive brand name drugs instead.

With Adderall in particular, there’s also been a change in format as the standard of treatment transitions from fast-acting to long-acting products. Several manufacturers of generics have discontinued production of quick-release products, throwing prescription drug inventories into further chaos. There are regulatory and market issues, as well. Some state laws preclude partial fills of controlled substances, so a pharmacy can’t spread out the supply to support multiple patients — the entire quantity must be dispensed at once to that individual who’s first in line with their prescription. The final factor is black market demand, which diverts some of the supply to illicit sales and use.

Addressing the problem: not a magic bullet, but some creative thinking

This problem will certainly persist for as long as the supply chain issues exist. That means that without cooperation and partnership throughout the ecosystem, we’ll be stuck in this negative spiral longer than necessary.

The key is that everybody — pharmacy benefit managers, pharmacies and payers — must all come together to think of creative solutions. Health plans and PBMs should consider actions like temporarily eliminating 90-day supplies of medications, or only paying for 60-day supplies, but making it financially neutral for the patient and the pharmacy.

Pharmacies could stop offering auto-refills, using digital reminders to make patients more aware of what they have on hand and the timeliness of their refill. PBMs could tighten up refill-too-soon edits where possible, and they can cooperate and work together to modify the process to make it accessible to all parties without added financial burden. A 90-day supply generally sees one dispensing fee paid to the pharmacy and one co-pay charged to the patient. Eliminating 90-day fills or reducing them to 60-day fills would also mean an administrative adjustment to ensure financial neutrality.

In working with pharmacies to begin resolving some parts of this multipronged issue, our first line of defense is to find ways to help pharmacies get better organized and optimize their costs. On the pharmacy operations level, some progress can be made by assessing inventory, demand, utilization, process, and cost on a granular level. Health plans and PBMs can look at system edits to see if they’re working appropriately to encourage or block overutilization of certain drugs, take a closer look at high-cost specialty drugs, or analyze networks, to name just a few areas that merit this type of assessment.

Concurrently, pharmacies should work toward modifying their work environments and optimizing technology to reduce the stress and burnout on their staff. They should also consider adding ancillary support to take on some of the administrative tasks currently being done by pharmacists.

There are policy-level approaches that could be taken, too. PBMs and pharmacy groups can advocate with state boards of pharmacy to modify antiquated rules and provide pharmacies with flexibility in staffing and hours, with midday breaks.

Drug shortages are a problem that didn’t arise overnight, and as laid out here, are not attributable to a single cause. Likewise, the solution is going to have to look into the issues through detailed attention to each specific factor, in addition to analyzing the entire ecosystem from 30 thousand feet. The key will be for everyone who has a stake in the pharmacy value chain to work together to create more transparency, dispensing protocols that are geared to current circumstances, better working conditions for pharmacy staff, and ultimately a more reliable and traceable supply chain.

Leslie Lotano-Saba is vice president of pharmacy solutions at global management consultancy AArete. She can be reached at [email protected]


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