In order to ensure the safety and integrity of the US drug supply chain, it’s important for all parties acting within it to consider the drugs themselves as critical infrastructure to the country as a whole, not just within the pharmaceutical industry. With so much of the active pharmaceutical ingredients (APIs) of drugs being imported from other countries like India and China, drug shortages have become an increasingly significant issue that threatens the fabric of critical infrastructure within the US.
“The first point I want to make is drugs are critical infrastructure, and drug shortages have created a real challenge for us. When you think about being a pharmacist or in the health care market, or just as an American, we assume that when you need a drug, it’s going to be at the corner drugstore when you go in, or it’s going to be at the local hospital when you go there. We just can’t imagine that it wouldn’t be there,” said Stephen Schondelmeyer, PharmD, PhD, FAPhA, Professor & Director at PRIME Institute.1
Drugs are critical infrastructure because of how they must constantly remain accessible. If a patient needs a life-saving medication, they expect that drug to be available at any pharmacy they choose to visit. But when critical, life-saving medications are not accessible, a drug shortage has occurred. According to Schondelmeyer, drug shortages are a result of parties within the supply chain failing to treat drugs as critical infrastructure.
Stephen Schondelmeyer, PharmD, PhD, FAPhA, presented at the ASPL’s 2024 Developments in Pharmacy Law Seminar. | image credit: The Little Hut
While it’s not necessarily one specific party commonly responsible for allowing drug shortages to persist, there is an intricately designed system for taking APIs and getting them into the hands of patients across the country. Schondelmeyer mentioned the holes within this system that have caused drug shortages, an issue that has persisted in the US as of late.
Before exploring drug shortage statistics and what might be causing them within the US, it’s important to understand the multiple definitions of the term “drug shortage.” According to Schondelmeyer, there are 2 key definitions of drug shortages—one that is manufacturer-centric and another that is patient-centric.
READ MORE: Drug Shortages More Likely in US Than in Canada
“The FDA defines drug shortages as a period of time when the demand, or projected demand, for the drug within the US exceeds supply. Simple: Demand exceeds supply. Now, [American Society of Health-System Pharmacists (ASHP)] also has a definition, and their definition is a supply issue that affects how the pharmacy prepares or dispenses a drug product or influences patient care when prescribers use an alternative agent,” he continued.1
Because the FDA is simply focusing on supply and demand of prescription medications, their definition is centered on the manufacturer, or the market. With ASHP’s spotlight on the patient, Schondelmeyer described their definition as workflow-focused, showing that drug shortages can significantly impact how pharmacy operations are conducted.
He then presented current drug shortage statistics according to the ASHP. From 2014 until now, drug shortages in the US have increased gradually but consistently, peaking at 323 shortages by late 2023/early 2024. Furthermore, 220 is the lowest number of drugs that have been in a shortage since 2018.2
To explain why drug shortages in the US have reached such an unprecedented level, Schondelmeyer discussed the differences in upstream and downstream drug supply chains within the pharmaceutical industry. He described the phenomenon of how we as US consumers aren’t fully aware of where our medications are exactly coming from.
“We know a lot about the downstream drug supply. We’ve had shortages because of hiccups in the downstream drug supply, but that’s not the primary cause of drug shortages in the US. It does cause some, it can be managed to prevent some, but the primary cause is the upstream side, and yet that’s the side that we’re most blind to,” he said.
The downstream supply chain is when a drug starts with the manufacturer, is marketed and repackaged for dispensing, and is eventually shipped to a pharmacy and given to the patient. In the upstream supply chain, the drug’s ingredients are prepared and the drug itself is formulated into a product. It is then packaged, labeled, approved, and eventually ready to hit the US drug market.
Schondelmeyer compared the 2 sides of the pharmaceutical supply chain, stating that the outsourcing of upstream supply chain activities has caused drug shortages in the US. Indeed, for brand-name drugs, 100% of the downstream supply chain is conducted in the US, while 53% of brand-name drugs’ upstream supply chain is conducted in the US. Even more alarming, 100% of all upstream supply chain activity is conducted outside of the US for generic drugs.
Much of the upstream supply chain for US drugs has been conducted in India and China, which also carries some concerning geopolitical implications. One of the few drugs that was almost completely manufactured in the US, both upstream and downstream, was the opioid medication class of drugs, showing that, according to Schondelmeyer, when money is involved and demand is strong, US businesses will follow suit.
“This is an unacceptable performance at the market and the drug supply system. We need to do something. We need to change how we operate our drug supply system and encourage this to get better,” concluded Schondelmeyer.1
Check out more of our ASPL 2024 coverage here.
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