What is driving pharmaceutical shortages?

By Maureen Aylward

The Washington Post reports that there is a serious drug shortage of several important pharmaceuticals. We looked to our Zintro experts to tell us what is happening in the pharmaceutical industry to cause this shortage and what can be done to prevent another one in the future.

Robert Farraj, an expert in hospital and oncology sales who has also worked as a retail pharmacist, says that recent pharmaceutical drug shortages have exposed a serious risk for patients and payers in the United States. “The risk exists that patients in need of specific pharmaceuticals with no viable alternative will go without adequate therapy,” Farraj says frankly. “This situation can occur for several reasons. The manufacturer can occasionally underestimate the market demand for their products, leaving gaps in coverage. Recent advances in science or new data may lead to an unexpected increase in the demand for specific therapies, leading to a shortage. And, occasionally, manufacturers may be unable to produce product up to the standards that they had agreed to with the FDA. In rare cases, manufacturers can cause intentional shortages to drive up the price of their products in the short term. This can lead to a secondary market where high demand products are auctioned at high cost.”

Farraj says several things can be done to reduce these issues. “First, manufacturers need to remain diligent in maintaining the integrity of their manufacturing facilities and complying with FDA guidelines,” he says. “Secondly, manufacturers should produce an emergency supply of unique and exclusive products to allow patients currently on therapy to continue or finish their protocol. Lastly, encourage the use of specialty pharmacy for complex medications (oncology, anemia, hepatology, and so on) to ensure managed care coverage, patient follow up and monitoring, and supply management. These steps should go a long way to reducing supply issues and improving patient outcomes.”

Samson Fung, MD, a specialist internal medicine with oncology board eligibility in Germany and an executive with pharmaceutical global strategic and operational level in major corporations, says that pharmaceutical production and the associated downstream chain (such as logistics, storage, packaging etc.) have always been a prime target for internal savings. He thinks that the major reason for increasing number of pharmaceutical shortages is due to lower profit margins. “Efficiency pressure has increased with dwindling gross profit margins caused by the expiration of major product patents,” Fung says. “Since the industry has not been able to replace this major gap through the launch of new products, the only way to sustain margins has been to lower the bottom line. As a consequence, production lines are not more planned or flexible, multi-purpose facilities. Instead, they are replaced by simpler solutions providing cheaper but less flexible outputs.”

By Maureen Aylward

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