The coronavirus pandemic has been defined in large part by shortages. Healthcare workers continue to suffer from a dearth of personal protective equipment. Hospitals have rationed ventilators, and no human can tolerate this kind of intensive support without sedation and other drugs — illuminating another problem that extends well beyond the current situation: a substantial shortage of critical pharmaceuticals in the United States.
Driven by the pharmaceutical industry’s need to compress prices, the majority of U.S. drugs’ active pharmaceutical ingredients (APIs) are manufactured overseas. Approximately 80% of antibiotics have APIs imported from Asia, and 40% of over-the-counter drugs are sourced from China. This race to the bottom on prices was created by pharmaceutical companies making short-term contracts with manufacturers that are negotiated every six months. While this does lower prices, it also eliminates multiple manufacturers and weakens the supply chain.
We are seeing the effects of over-reliance on offshore manufacturers today. In March, India banned the export of hydroxychloroquine. (The ban has subsequently been partially lifted following pressure from the Trump Administration.) Notwithstanding the controversy over the use of hydroxychloroquine as a treatment against COVID-19, the drug has many clinical uses including treatment for malaria and auto-immune diseases such as lupus and rheumatoid arthritis. To put this into context: There are nine manufacturers of hydroxychloroquine, and the U.S. is not one of them. As a result, pharmacies have been forced to set prescription quantity limits, and autoimmune patients have been scrambling to fill their orders.
While the COVID-19 pandemic is straining our nation’s drug supply chain, this problem dates back years. According to the U.S. Food and Drug Administration, the number of ongoing drug shortages increased from 2017 to 2018 after declining from a peak in 2011. At any given time in the U.S., there are shortages of more than 100 drugs — including those used for anesthesia, palliative care and septic shock — as well as vaccines and medical supplies like sterile water. Shortages have also been lasting longer, in some cases more than eight years, according to a 2019 report from the FDA’s Drug Shortage Task Force. Sixty-two percent of the pharmaceuticals analyzed went into shortage after supply disruptions related to manufacturing or quality problems.
We cannot continue to put the health of our population at risk based on the policies of other countries. We must instead prevent drug shortages and enhance our own pharmaceutical manufacturing infrastructure — especially for priority APIs and excipients, as well as critical generic medication. We have the capacity and a large unemployed workforce that could fill the quality manufacturing jobs made available if we bring them back to the U.S.
Pharmaceutical shortages affect patient care by causing medication errors, compromising or delaying medical procedures, and requiring replacement of first-line therapies with alternative medications. In addition, medication shortages disproportionately impact disadvantaged populations, further exacerbating care disparities. By fortifying our own pharmaceutical supply-chain infrastructure, we can produce critical APIs and excipients year round, keep the market free of unnecessary regulation, avoid trade wars and make sure we have the ramp up capability in place when we have a crisis. This will help make us independent from a global supply chain — and allows us to negotiate from a position of strength.
Anthony Loiacono is CEO of Capital Rx, a pharmacy benefit manager.
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