Recent data from Premier Inc. show that drugs that have slipped into shortage as a result of COVID-19 and cracks in the supply chain, and this shortage is impacting health system pharmacists and staff.
DocWire News spoke with Jessica Daley, Group Vice President, Chief Pharmacy Officer, Premier Inc., about these shortages and the ramifications associated with them.
DocWire News: Can you provide us with some background on yourself, and the company, Premier Inc.?
Jessica Daley: Sure. So Premier is a large group purchasing organization. We represent more than 4,400 hospitals and health systems, more than 200,000 providers. And we support them in many different ways, particularly, from my group’s perspective in supply chain and pharmacy, helping them to find products and support and contracts and solutions in the market. I have been with Premier for about a year and a half. I’m responsible, as I mentioned, for our pharmacy program. So everything from contract negotiations to our field member support, where we work closely hand-in-hand with our members to make sure that they have the pharmacy products that they need to deliver high-quality patient care. I’m a pharmacist by background. I’ve had experience running supply chain for a large health system, and I’ve also spent a good deal of my career within the pharmaceutical industry. So happy to be here again.
How has the COVID-19 pandemic impacted critical drug production?
So I think one of the interesting things about the drug supply chain is that this has been a longstanding challenge. So more than a couple of decades in the making. Drug shortages have been a part of a way of the life for many of our healthcare providers, especially in the hospital segment. Many of the generic old injectable medications that you need to deliver patient care on a daily basis are often highly at risk of shortage. Now, the COVID pandemic certainly made things more challenging. So just in a normal sense, as I mentioned, we’ve had drug shortages that have lasted for decades. Certain drugs are more likely to be impacted by shortages, but when COVID hit, we saw oftentimes it spikes in demand for certain products, especially the products that you need to manage COVID patients who are on a ventilator.
So sedatives, pain medications, muscle relaxers, those types of products that again, have been in the market for forever, their generic products, they saw demand spikes of sometimes even more than 150%, depending upon where there were spikes in need of using these drugs and patients who were experiencing COVID. We saw an incredible strain on the system. In addition to that, we saw also again, in the early parts of the pandemic, just an uncertainty of what products we could use to optimally treat some patients who had COVID. And so we saw some spikes in the need for products like hydroxychloroquine or products like the steroids. So it was certainly one of those areas where we saw throughout the pandemic drug shortages persisted, but we saw very strong market signals demand increasing drastically for products that the market had a very hard time recovering and trying to backfill the demand and the need to supply those products to our customers around the country.
What data did Premier find regarding the unintended consequences of COVID-19 vaccine manufacturing on drug supply?
So this is one of those areas where we see even within the supply chain, and one of the reasons why we sometimes do see drug shortages is that it’s almost like squeezing a balloon. When you have demand and you’re putting pressure on the system, it’s going to cause the balloon to expand or potentially pop from a different area. So with the vaccine manufacturing, we really saw just a massive demand for not only some of the supplies needed to deliver vaccines, so syringes, band-aids, gloves, everything that you would need within those vaccine kits, but the sterile water or the diluent, the product that you needed to actually dilute the vaccine before you could administer it. We also saw that manufacturers who are manufacturing the vaccines were shifting some of their production lines to optimize vaccine production, because we needed to get out many millions of doses, not only to the United States, but to other countries around the world.
So we saw some shifting in prioritization for the products that they were manufacturing within their facilities. So we saw a lot of downstream challenges, not only, and again, getting the supplies that you need to administer a vaccine, shortages in syringes and needles. And we saw shortages in the products like I said, the diluents, the things that we need to actually dilute the vaccine to administer it. And those diluents aren’t just used for vaccines, they’re used in a lot of different areas around the hospital. For vaccines, for sure, but for other things like flushing IV lines. And so when we saw massive pressure to secure all of that supply for vaccination, it became difficult for our members and our healthcare systems and in this country and around the world to get those products. And as I mentioned, the vaccine production again shifted some of the focus of the manufacturing within our many key supply lines so that some other products were deprioritized.
Maybe they weren’t manufactured like they would’ve typically been on their schedule in preference for making sure we had vaccines that were produced for the market. So we definitely saw some shifts and some challenges in getting some of these products to our members to support patient care.
What can be done to address these shortages?
So there’s a lot that we’re doing to address these shortages. And again, a lot of this has been longstanding in the market. So Premier has certainly taken a stance. The COVID pandemic accelerated some of the work that we’ve been doing, but this started long before COVID hit. So one of the biggest things that we can do, certainly as a nation here in the United States is focus on building a strong supply chain that is built on a commitment. So a commitment from a provider and a supplier to manufacture the product that’s needed.
So we have a program that we’ve built, our ProvideGx drug shortage program, where we do that. We match our members, our healthcare providers with suppliers and with the distribution channel that can secure the supply that they need. So we commit to a certain amount of demand and the supplier is then able to manufacture to that demand. There’s often in the market right now, inconsistency with supply and demand. So one provider may purchase from a particular manufacturer today. They may shift that purchasing in the future. And so many of our suppliers are building their forecast for production based on some incomplete understanding of the demand.
By really strongly aligning a committed demand with our supplier base, we’ve been able to see that our members have been able to, even through the COVID pandemic, whether some of those demand spikes, because the supplier knows that they’re going to have purchases and they’re able to manufacture to that demand, they are able to then keep some safety stock and keep some additional supply in reserve for when there would be some kind of shift in demand and a spike in demand like we saw throughout COVID. So it’s important that we’re looking at finding ways to support this and really building that committed structure for challenging the drug shortage pandemic. The other thing that we’re looking at is creating a very diverse supply.
So in many instances, and we saw this happening throughout COVID, when you really dig into where the drug supplies that we are purchasing here in the United States are coming from, sometimes you have a situation where many of the providers in the country are either buying from the same supplier, or when you go way back in the supply chain, some of the raw materials that are being used to produce these drug products, we’re seeing that those are coming from either the same region of the world, or potentially even the same producer. So if there’s a challenge in production, whether it’s a manufacturing challenge, there’s a quality challenge or it’s just an increase in demand, you only have one or two suppliers that can flex their manufacturing capabilities to meet that change in market demand.
Having a diverse market allows us to not necessarily move all production to one area. So we’ve heard quite a bit through the pandemic about moving production back to the United States. We have a lot of our drug supply chain that is being manufactured, especially in India and China, and the push has been bring as much onshore as possible. At Premier what we really look at is making sure that we’re diversified. So again, it’s that squeezing the balloon analogy. Even if we moved all production to a supplier who was based in the United States, any kind of a challenge with manufacturing or quality could still squeeze that balloon and cause a problem or cause a downstream issue with supply. So having a multitude of suppliers, having a multitude of regions around the world that are manufacturing high-quality products for the United States is very important.
So I think there’s really a couple of different ways that at Premier we’ve looked at solving for that again, high-quality or high compliance agreements, but then the way that we source our contracts for our members is we work directly with the suppliers to understand and get some transparent information about their supply chains. Where our products are coming from, where the raw materials are coming from, and we’ve created our portfolio to maximize our ability to have a diverse supply chain and have no major reliance on any one area or one supplier so that we can be more flexible and we can better respond to changes in the market.
Any closing thoughts?
Yeah, I think the important thing here is, again, we’ve talked about drug shortages for many decades. It certainly has become an area of particular visibility because of COVID. We’ve seen drug shortages in the media. We’ve seen specific issues where we’ve seen hospitals or locations around the country that are dealing with patients and they can’t get the products that they need. I think what’s really important, and again, what we’ve learned, looking at high compliance, looking at building a diverse supply chain, what we’ve learned throughout our time, and managing and supporting our members through some of these drug shortage challenges is that we already have a great deal of supplier quality capability and diversity within the market. And so there is so much that we can do with the existing infrastructure, if we only come together and find ways to optimize it.
Like I said, whether it’s through committed contracts, working with suppliers to build a structure that allows for surety of demand and surety of supply, or looking at ways that we can do diversify our supply chain, there is a lot of capacity still left within our drug supply chain market. It’s about finding the right way to match our providers with our suppliers to maximize that supply chain capability. And so I’m very excited to continue to work with our members and with our suppliers to find ways to build a much healthier drug supply chain for the future.