Managing and Mitigating Drug Shortages: Andy Brailo with OSF HealthCare, Part One

This is the first article in a multi-part series.

Jerry Storm, Senior Vice President of Pharmacy Services at OSF HealthCare, joins Premier’s Chief Customer Officer, Andy Brailo, for part one of an episode of 3Q that explores how tackling the root causes of drug shortages and deploying innovative strategies can help improve access to at-risk medicines.

Andy: We consistently see shortages of drugs that have been available and in the market for years, even relatively simple products like fluids and saline. What are the reasons these products can be in short supply?

Jerry: There's an unbelievable amount of time that all the pharmacies spend trying to address drug shortages and everyone knows it's a multi-faceted issue that's driven by a whole variety of different factors. One of the most frustrating part is many of these drugs are in short supply. They're older drugs that have been around for years and they’re low-cost generics and then all of a sudden it becomes short supply. A lack of competition is probably one of the primary drivers of this.

There's a high level of generics, concentration of market which has driven down to only a few manufacturers that make them. So, when there is a surge like we had throughout the pandemic, the supply chain just doesn't have the resiliency to be able to meet those demands. Likewise, since there's only a few manufacturers that's making these drugs the ability for them to operate and to be able to up their capacity is very limited.

You add then also to not only the few number of manufacturers but many times with these generic products there's other challenging factors such as manufacturing problems. They have quality issues that gets identified that may shut a manufacturer down which leaves only one manufacture to pick up that volume. Or you have unpredictable demand, which we all experienced over the last two years with the pandemic.

You have raw material shortages where you can't find the raw product to be able to manufacture it. It could be coming from China or overseas and its tide up in the shipping chains. Then you have barriers just simply getting new suppliers online to begin manufacturing these products and all that creates really the perfect scenario for shortages.

Sustainable solutions have to decrease these barriers to get new manufacturers to enter into this marketplace. Namely time and cost to enter is expensive. What can we do to be able to minimize that cost for a manufacturer to start manufacturing a product that probably is not going to be a big money winner? In some cases, there probably will be a loss leader for them, yet maintaining the quality of standards that we all expect.

How OSF HealthCare is deploying strategies to make a difference in addressing drug shortages is the subject for part two of this 3Q episode. To view future installments of our series, click here.