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Here Are 4 Pharmacy Trends to Watch in 2022

Published in: Pharmacy Times

By: Jessica Daley, PharmD

Drug shortages, infrastructure and wholesaler challenges will be the backdrops of the pharmacy landscape this year.

The Greek philosopher Heraclitus said, “Change is the only constant in life.”

Never has that been truer for pharmacists.

From serving as supply chain protectors and technology extenders to leading the largest mass vaccination effort in US history, pharmacy is a central component in health care delivery now and for the future. Against this backdrop, pharmacy leaders must contend with a massive global supply chain slowdown and contribute toward improving health care’s cost, quality, and underlying data infrastructure.

What follows are 4 trends that could usher in change and some advice to help pharmacy leaders prepare.

The Short(age) End of the Stick

Despite our best efforts, providers continue to navigate about 200 active drug shortages every quarter, including COVID-19 medications and other workhorse drugs that were de-prioritized to accommodate COVID-19 vaccine production.

Many shortages are the result of marketplace dynamics that originated long ago. Historically, the pharmaceutical marketplace has rewarded the lowest-priced products, discouraging competition and creating an unhealthy “race-to-the-bottom” environment. Opaque supply chains, quality concerns, and regulatory hurdles, and unpredictable demand forecasting compound the issue, creating a perfect storm for shortages.

To tackle drug shortages once and for all, leaders must embrace quality and sustainability rather than price alone.

For instance, many organizations are leveraging committed “buyers’ clubs,” giving manufacturers accurate demand signaling, predictable revenue, and the surety needed to bolster production. One such program, ProvideGx, uses long-term contracts for accurate demand forecasting, as well as requirements that manufacturers retain an average of 3 to 6 months of active pharmaceutical ingredients and finished dose products. With this safety stock, it was possible to weather 150 percent demand spikes during COVID-19’s first wave. The program is also having a long-lasting impact, as 14 products added to ProvideGx have been delisted from the FDA drug shortage list.

As buying patterns are addressed, COVID-19 also made it clear that we need greater diversity of manufacturing and suppliers, and that includes greater domestic production. A recent report found that less than 5 percent of large-scale manufacturing sites for generics raw materials are in the United States; the majority are in China and India. Leveraging data to identify products most at-risk, pharmacy leaders are looking beyond committed contracts to co-invest in domestic pharmaceutical suppliers and for product categories that lack adequate competition, geographic diversity, or stable sources of contingency supply.

Extending commitment-driven, private-sector models to other drugs is a productive step to accommodate surge demand and increase competition. Policymaker solutions, including information-sharing requirements, streamlined regulatory approvals, and zero percent interest loans and tax incentives, can also help close the gap. Overall, in 2022 more of these initiatives will likely start bearing fruit.

A 21st Century Data Infrastructure

Another major barrier to an effective pandemic response was lack of visibility into inventory status, location, and production process for medical drugs and products.

For instance, the FDA collects information on the number of registered drug manufacturers in each country but not the actual volumes produced. The only answer to this problem is greater upstream visibility, requiring manufacturers to disclose where each component of finished product is made and in what quantities. This can allow the FDA and others to better understand risk potential and work with private-sector partners to adjust before a crisis. After an initial delay, it is encouraging to see the FDA move forward with collecting manufacturing volume data for biologics and drugs, a new authority granted under the Coronavirus Aid, Relief, and Economic Security Act.

We also need greater technology adoption to assess availability and product location, as well as major gaps. Distributors, the federal government, group purchasing organizations, manufacturers, and providers must work together to promote harmonization and interoperability within a national data infrastructure. This system would have the ability to comprehensively track critical product availability, from the raw materials, to manufacturer, to distribution, to state and national stockpiles, to end dispenser inventory.

Early in the pandemic, government agencies, pharmacy leaders, and provider organizations turned to a near real-time technology system to gain visibility into hospital inventory, including stockpiles. This progressive monitoring approach needs to extend across the supply chain, providing advanced alerts of demand and inventory levels, enabling rapid movement of product to points of care.

Beyond supply chain management, pharmacy leaders are leveraging technology for a leg up in today’s and tomorrow’s health care environment, with tools for budgeting, clinical decision-making, cost savings, and utilization support. With data on COVID-19 treatments still emerging, pharmacy leaders are leveraging clinical intelligence to help determine drugs’ appropriate use and make evidence-based care decisions. These tools are particularly useful in a pandemic, where clinical management of a disease continues to evolve and can outpace the initiation of new clinical trials.

A Wholesale Change?

COVID-19 put a spotlight on our nation’s inability to dynamically allocate medications to organizations with the greatest need. Instead, distribution relies largely on contracts that exist to meet non-crisis needs, and products go on allocation to restrict ordering when demand spikes.

Allocations are typically set to match a customer’s historic purchase volume with a goal of supply chain protection in times of disruption. A downside of allocation is that, while well-intentioned, it may limit providers in the number of products they can buy, even if they have legitimate reasons for larger orders.

A wholesaler’s ability to redistribute product across facilities or geographies is impeded by its lack of information on specific facilities’ disease burden, as well as existing contractual agreements. This was on full display at the pandemic’s height, as some facilities had a surplus of products, while others were operating in crisis mode and regularly seeking alternative, safe therapies to treat patients.

An increasing number of US pharmacy leaders have and will continue to look outside traditional wholesale channels to improve efficiency and protect product access unless wholesalers respond with more workable solutions. The movement to more demand-driven, dynamic strategies, including direct-to-manufacturer sourcing, forward buys, special distribution arrangements and other non-traditional partnerships, will grow.

One example: For drugs not on shortage but heavily backordered, because of surge demand, Premier worked with manufacturers and its own distribution partner to remove products from traditional wholesale allocations and earmark them for purchase by members. These unique partnerships allowed the dynamic allocation of products based on clinical need, rather than purchase history.

In 2022, wholesalers will be pushed to develop more sophisticated allocation methods, where products are funneled to those most in need, considering where hot spots are, as well as the projected caseloads. In addition, a dynamic allocation process needs a 2-fold approach: balancing surge demand in hospitals with consistent demand from non-acute and retail pharmacies whose patients use the drugs for chronic conditions.

Pharmacist of the Future

Gone are the days of pharmacies relegated to order filling and pill counting. Although it has always been much more than counting pills, pharmacists truly rose to the occasion amid COVID-19, expanding their roles in emergency preparedness, patient care, and vaccinations to add greater frontline value and practice at the top of their licenses.

In 2020, nearly 70 percent of the FDA’s novel drug approvals were designated in one or more expedited categories, which required pharmacist expertise to understand their appropriate use across patient populations. As the pandemic continues to bring new drug treatments to the fore, the pharmacy profession will remain front and center in allowing better understanding of medication use and supporting strong patient outcomes.

Evolving care delivery and pharmacy models are poised to become standard practice. Although telehealth, virtual care, and other digital health offerings were accessible before COVID-19, the pandemic accelerated their adoption. For pharmacists, this will bring opportunities in technology advancement and innovation via telepharmacy visits, remote order verification, and leveraging technology to oversee and verify compounding.

As the location of care shifts from hospital to home and the focus on improving patient health increasingly becomes a community-wide effort, pharmacy leaders will be expected to participate in the design and implementation of remote patient care, all while expanding their clinical and operational skillsets. This expanded scope will reshape the pharmacy school curriculum, training pharmacists and pharmacy technicians in information technology to act as care extenders, assist in billing, and optimize the technical aspects of service delivery. COVID-19 may be the final push needed to make this a reality, leading to higher quality care and improved integration of pharmacists into virtual care teams and care teams overall.

Although the pandemic emphasized pharmacy’s vital role in frontline care, it also demonstrated the urgent need for industry-wide transformation. Achieving meaningful, sustainable change in the pharmacy profession and across health care requires a focus on long-term resilience, strategies to scale quickly and efficiently, technology and data insights, and unique and unlikely partnerships.

Through these efforts, pharmacy leaders can continue to help navigate the pandemic, usher in important change and help drive health care value well into the future.

Jessica Daley, PharmD, is chief pharmacy officer and group vice president of supply chain at Premier.

This article ran in Pharmacy Times on January 19, 2022.

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