Combating the prescription drug shortage crisis

Factors Driving the Surge in Drug Shortages

According to Ax, two primary factors have contributed to the recent surge in prescription drug shortages. First, the pandemic's impact on manufacturing facilities and labor markets has led to ongoing supply constraints, exposing vulnerabilities in the global supply chain.

"In many areas, labor shortages still remain a challenge,” Ax explained.

Second, demographic shifts and the popularity of new therapies have increased demand for various medications.

"Today, 70% of Americans take prescription medications regularly — a 14%-point increase from 2019," emphasized Ax, “while more than half take two.”

The rise in polypharmacy, where patients take multiple medications daily, further strains the supply chain. Additionally, the popularity of new drugs, such as GLP-1 agonists for weight loss, has dramatically increased demand, making it difficult for manufacturers to scale up production quickly enough.

The healthcare industry's reliance on global sourcing makes the supply chain vulnerable to international disruptions and geopolitical conflicts. Many prescriptions for American patients are manufactured abroad, and there is a lack of manufacturing capacity redundancy and transparency around supply chain disruptions.

As of 2019, 72% of active pharmaceutical ingredients (API) facilities supplying the US market are overseas, with 13% in China. China and India lead in API production due to lower costs and favorable regulations. In 2021, India filed 62% of active API drug master files, while Europe's share dropped from 49% in 2000 to 7%. Brand-name drugs are mainly made in Europe, whereas generics and their APIs are produced in Asian countries like India, China, Japan, and Singapore. India, the largest generic drug supplier, relies on China for about 70% of its APIs and raw materials.

"These factors can exacerbate shortages, making it difficult to ensure consistent drug availability," Ax stated.

Technological Solutions to Supply Chain Issues

The digitization of healthcare supply chains has offered significant potential for addressing drug shortages. Predictive data analytics and AI-powered forecasting can help anticipate demand increases, allowing manufacturers to plan ahead. Technologies like the Internet of Things and blockchain can track and verify medication inventory through the supply chain, enhancing transparency and resilience.

Ax shared that UpScriptHealth has developed a unique ecosystem that connects patients with telehealth providers and pharmaceutical companies. This integrated approach has allowed for immediate detection of supply issues and proactive corrective action.

"With UpScript’s fully integrated solution, we can immediately determine if there are supply constraints that would inform a prescribing decision," Ax elaborated.

These solutions ensure that prior authorizations are processed quickly, reducing delays and improving medication access. Through its distribution model, Ax reassured that the company could deliver medications directly to patients, bypassing traditional barriers and ensuring timely access to treatments.

Enhancing Supply Chain Efficiency

During the interview, Ax shared that UpScriptHealth's role in the distribution chain is critical for the safe, efficient, and compliant delivery of medications from manufacturers to patients. Since writing the first compliant online prescription in the US in 2002, the company has worked with pharmaceutical and medical device companies to ensure quick and easy access to necessary products.

"Through the UpScript ecosystem, patients can access in-demand weight loss treatments and receive effective therapies quickly," Ax highlighted. The company’s vertically integrated business model streamlines the distribution process, making it direct-to-consumer and reducing the need for patients to visit multiple providers.

Similarly, other companies are exploring technological solutions to address the ongoing challenges of the medication shortage, particularly for GLP-1 receptor agonists. For instance, Ro has launched a GLP-1 Supply Tracker to provide patients with real-time insights and automated alerts on GLP-1 drug availability.

Importance of Stakeholder Collaboration and Data Analytics

Ax said that addressing drug shortages requires deliberate coordination among manufacturers, distributors, providers, technology platforms, regulators, and patient advocates. Effective collaboration ensures that supply chain disruptions can be managed more efficiently, preventing widespread shortages.

Many companies use analytics to predict increases in demand for certain medications by aggregating supply and demand data. Real-time inventory data can detect early warning signs of shortages, allowing for proactive measures to prevent disruptions.

"As an example, companies could use data to predict how many flu vaccine doses or Tamiflu prescriptions would be needed for the next flu season based on past years," Ax explained.

Regulatory and Policy Changes

Regulatory and policy changes can also significantly alleviate prescription drug shortages. Incentivizing domestic manufacturing, increasing reporting requirements, and expediting approval processes are essential.

Ax pointed out that "the shortage of attention-deficit/hyperactivity disorder medication, particularly, is affected by regulation because stimulants are controlled substances regulated by the DEA." However, the DEA’s encouragement for manufacturers to increase production and forthcoming guidance on controlled substances through telehealth are positive steps forward.

Although complexities of the global supply chain have made drug shortages challenging to solve, experts like Ax suggest investment and stakeholder collaboration could lead to better transparency and insight.