Drug shortages: Study examines pandemic supply chain, HHS proposes resilience incentive

While drug shortages worsened due to supply chain issues at the start of the COVID-19 pandemic, they quickly returned to pre-pandemic levels, according to research published on 5 April in JAMA. The study also found that one in seven supply chain issue reports, or 14%, were associated with drug shortages.

The objective of the paper, which was written by Katherine Callaway Kim, of the University of Pittsburgh School of Medicine, and colleagues, was to estimate the proportion of supply chain issue reports associated with drug shortages during the COVID-19 pandemic; a drug shortage was defined by a 33% decrease in units purchased within six months of a supply chain issue report. Examples of supply chain issue reports include quality concerns, such as microbial contamination, and unanticipated events such as natural disasters, recalls, and discontinuations.

The study examined 571 drugs that were subject of 731 supply chain issue reports from 2017 to 2021; these drugs were matched to 7,296 comparison drugs with no such reports. The main finding was that one in seven supply chain issue reports, or 14%, were associated with drug shortages. The study found that “supply disruptions increased for drugs with and without reports at the start of the COVID-19 pandemic and returned to prepandemic levels after May 2020.”

The study used data from 2017 to 2021 from the IQVIA Multinational Integrated Data Analysis database, which includes data for more than 85% of pharmacy purchases from wholesalers and manufacturers.

In a related commentary, authors Mariana Socal and Joshua Sharfstein, both of Johns Hopkins Bloomberg School of Public Health, wrote that the public health surveillance system should be upgraded to capture the frequency of demand-driven shortages and distribution problems, identify the drugs most affected, and provide greater transparency.

In addition, Socal and Sharfstein wrote that “more attention should be paid to responses to early warning signals. It would be useful to know what, if anything, changed when reports were sent to the FDA, which interventions mattered, and which turned out to have little impact. Understanding the trajectories of drugs that avoided going into shortage and appreciating how other drugs recover from shortages is important to identify key factors and actions that can help target policies to increase supply.”

HHS proposes resiliency metrics

Separately, HHS released a white paper last week that proposes some measures to address drug shortages. One of its key recommendations is to reward hospitals that avoid drug shortages through certain metrics like resilient purchasing behaviors. These metrics would be developed by two new programs, the Manufacturer Resiliency Assessment Program (MRAP) and a Hospital Resilient Supply Program (HRSP).

The proposal would require Congress to create these two new authorities and grant additional funding to implement these dual programs, which would use these metrics for generic sterile injectable medicines used in inpatient settings.

The HRSP would establish financial incentives or penalties to hospitals based on a combination of meeting certain requirements that would be recorded on a hospital scorecard. The scorecard could include manufacturer metrics developed by MRAP and hospital pro-resilience purchasing behavior metrics developed by HRSP using information reported to CMS by hospitals.

“While specific metrics have not yet been developed, and would be developed in collaboration with external organizations, MRAP metrics could reflect manufacturers’ quality management maturity, manufacturing redundancy, and API/KSM sourcing diversity, among other resilience-related metrics. These metrics would be intended to enhance transparency about manufacturer management practices.”

The paper states that a combination of these programs “would bring transparency into the market, link purchasing and payment decisions to supply chain resilience practices, and incentivize investments in supply chain resilience and diversification in the supply chain—including domestic manufacturing—at a scale that would drive impactful change in the market.”

A similar ratings system has been proposed by the US Food and Drug Administration to rate or rank a company’s quality management maturity (QMM) system. A proposal floated late last year by FDA proposed a plan to assign a score or rating system to companies with a high-quality management maturity rating, though the plan drew some opposition from industry. (RELATED: Industry groups express misgivings on FDA’s QMM program, Regulatory Focus 15 December 2023)

Alongside the white paper, HHS Secretary Xavier Becerra said that “advancing and implementing solutions to the nation’s drug shortages are so important, and why we want members of Congress and all actors in the supply chain to consider and act on the policy options presented in [this] white paper.”

JAMA, HHS

Drug shortages: Study examines pandemic supply chain, HHS proposes resilience incentive

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