Good afternoon everyone. Thank you for the introduction. I didn't expect my brother will be in the picture but I see him embarrassed in the front line here. So today we're going to be talking about drug shortages and high-cost medications. So I don't have any relevant financial relationship related to the content of this presentation and the objective of this talk really is to talk about the economic and clinical implications of drug shortages and high-cost medications, to describe strategies to manage high-cost medications and drug shortages, and also to review how therapeutic decisions can be made for high-cost medications in an imperfect environment. To start with I wanted to share some data on drug shortages. So this is a graph by the University of Utah Drug Information Center and it basically reports the drug shortages by year from January 2001 up to June 2022. Each yellow bar on this graph represents the new drug shortages reported that year and as you can notice towards the end from 2019 to 2022 this has been a decrease in the number of new drug shortages per year. However when we look at the active and ongoing drug shortages you'll notice there is a constant trend and actually an uptick with the number of drug shortages and the reason for this is that the existing drug shortages are not resolved so the compounding effect of the unresolved drug shortages with the new drug shortages results in a consistent increase in number of drug shortages reported every year. This graph shows the top five classes of medications that are in short supply. This includes antimicrobials, cardiovascular medications, central nervous system medications such as sedatives and analgesics, fluids and electrolytes, and hormone related medications. And as you can see also that injectables tend to be in more short supply compared to non injectables and we'll be talking more about this in the rest of these slides but this is really related to the quality control and concerns related with the production of sterile products. So what are the causes of drug shortages? There are four main reasons that include acquiring raw materials and manufacturing issues, business decisions, and supply chain issues. So with regards to raw material it accounts for 3% of the drug shortages and almost 80% of the raw materials are imported from outside the United States so anything that impacts the global supply chain would impact drug manufacturing here in the United States. This includes anything related to political conflicts, climate issues, environmental issues, trade disputes, so anything that impacts the supply chain will impact drug manufacturing. Also the delay or discontinuation of raw materials by sole source suppliers can end up in resulting in drug shortages and a common example of this is what recently happened with propofol and one of the sedatives and also in heparin. Also there could be shortage in the drug excipients or the packaging material related to specific medications. Recently over the last five years there was a shortage in the glass container that's used to package propofol which resulted in a shortage in that product. Manufacturing issues are the most common reason for drug shortages so natural disasters can impact facilities, manufacturers, hurricanes, or climate related issues can result in destruction of facilities that results in drug shortages. If you recall back in 2017 the Hurricane Maria when it hit Puerto Rico it destroyed a lot of the facilities that manufacture a lot of the medications that we use an intensive care unit that resulted in drug shortages. When it comes to injectables because of the quality control concerns related to the manufacturing of several products whenever there is an issue with the quality control the regulations of mixing of the production of these materials it takes a longer period of time to revert back to produce these injectable medications so there's always a delay when it comes to dealing with injectable medications that leads to drug shortages. And it's also this domino effect where a shortage in one medication might impact the alternative drug. An example of this is the furosemide and pumitanide drug shortages. So when one is short supply the other one gets impacted leading to drug shortage in both of those products. Also change in product formulation might result in drug shortages. An example of this when they change the propellant that's in the albuterol inhaler it took a while for the manufacturers to update the products which resulted in shortage in albuterol inhalers. Also shift of resources so a lot of generic medications are manufactured in the same lines so when they use one line to produce one med it takes out the resources from producing another medication so they want to increase supply of one medications that impact the production of other medications that are produced in the same manufacturing line. Also loss of skilled personnel so this happened during COVID-19 which resulted in a significant delay in the production a lot of medications that result in drug shortages that we all encountered our own institutions. Business decisions can lead to drug shortages so manufacturer might decide to discontinue a medication mainly to the lack of profit and financial return. Also industry consolidations and mergers can result in making decisions of discontinuing specific medications mainly to do less loss of financial return or lack of demand. Also as I mentioned earlier with injectable medications there's a potential safety concerns some manufacturers instead of trying to address these safety concerns they will decide to discontinue producing that medication because it is a better financial decision. With regard to supply chain issues this picture shows how medications are distributed to different wholesalers so one manufacturer will produce a medication they will repackage it and they will distribute it to different wholesale distributors that supply the same hospital or pharmacy so when there is a shortage in one medication it impacts all wholesale distributors which results in the impacting the distribution of these meds to the pharmacy or the hospital. Also increased demand may result in drug shortages this usually occurs when there's an approval of new indication for a specific medication or updates to a therapeutic guidelines that might prioritize one medication over the other which results in increasing demand of on that medication leading to drug shortage. Also a lot of the facilities don't have excess supply so a lot of the health systems they carry one to three month worth of supply what we refer to as just-in-time inventory so when there is a drug in short supply a lot of these hospitals cannot maintain the internal demand and they quickly deplete their supply leading to a shortage in their system. Also stockpiling is very common so large institutions might have a large purchasing power so when they sense that there's medication they're gonna go in short supply they purchase a large quantity more than that they usually will need for their health system leading to depleting the quantity in the market and drug shortage. There are three different resources that we can review to identify medications that are in short supply. These are the manufacturers, the Food and Drug Administration, and the American Society of Health System Pharmacists. There was an evaluation of these three different resources and that evaluation showed that the American Society of Health System Pharmacists website or the resource ranked highest when it came to timeliness of the information related to drug shortages providing reasons for the drug shortages and also suggestions for alternative therapy. Drug shortages have economic and clinical impacts so the annual direct costs associated with managing drug shortages across the United States is around 216 million dollars and that's not accounting for indirect costs such as the time and the labor that's placed in managing these drug shortages and of course patients get impacted because they're forced to use a more costly alternative and increasing in their out-of-pocket expenses. With a clinical impact there's an increased risk of medication errors because these health facilities will purchase different brands or concentration of medications that the providers might not be familiar with. Also clinicians would order alternative medications they're not familiar with that could lead to dosing errors and also to medication errors. Some facilities will purchase look-alike and sound-alike products which could lead to medication errors. This is an example that was reported by the Institute of Safe Medication Practices. So this hospital had a shortage in 5% sodium bicarbonate so they purchased vials that would look very similar to dextrose 5% and they used the sodium bicarb to mix medications for pediatric patients which unfortunately led to harm. Also this might delay initiation of therapy and also patients don't receive the drug of choice which might impact clinical outcomes. So how do we plan for drug product shortages? The American Journal of Health System Pharmacists published a paper defining four specific elements that are needed for the success of managing drug shortages which include having a medication shortage team, having a process for approving alternative therapies, have a resource allocation committee, and a process for addressing ethical considerations. We also discussed three different phases for managing drug shortages that included identification assessment phase, the preparation phase, and the contingency phase. Once a drug information center identifies there's a medication in short supply, the first thing they usually should do is to gather details of the drug shortage, the duration of the drug shortage, the explanation and the rationale for these shortages, and also to identify the threat to the patient and the cost associated with these drug shortages. It's very important to gather data on how much the hospital have of their specific medication so they need to know the inventory on hand and they can use different dashboards to identify this. So this is an example of a dashboard that a health system used to identify their live quantity of medications that are used for the management of COVID-19 patients looking at analgesics, sedatives, and neuromuscular blocking agents. And that health system was able to create guidelines to pivot between different therapies based on their quantity on hand. They were able to assess their burnout rate and they pivoted between different guidelines to make sure the patient care is not interrupted. During the preparation phase, usually the drug information team will try to identify therapeutic alternatives, communicate these alternatives to the frontline teams and healthcare providers, and ensure patient safety, place barriers in place to prevent any safety issues that can result from these alternative therapies. Some hospitals may rely on external relationships with other hospitals in the area to share their supply. Throughout this process, it's very important to have transparency so the patients should be aware that they're not receiving the drug of choice. They should be able to discuss the process that was involved in deciding what alternative therapies were selected for their care. And also there should be a neutral observer. They'll be able to apply this process across the board for different situations. Usually the pharmacist could be involved in making these decisions. There should be a process for appeals and revision. So if someone felt that the decision that was made with regards to denying a specific medication because of shortage, there should be a process to appeal that decision and discuss it on a higher level. And the most important thing is the process should be mandated on everyone to ensure fairness and to make sure that these decisions are not impacted by specific patients or prominence of a provider that may result in not following these rules across the board. The last phase is a contingency phase which involves risk management and liability, especially for litigations by patients who feel that they haven't received the proper care or suffer any anticipated adverse drug events. If the drug shortage is continuing for a longer period of time, there should be discussions about the budget, how much they're willing to spend on these drug shortages and alternative therapy based on the duration of the drug shortage. And finally, they can consider using compounding pharmacies to compound medications to be able to come up with alternatives that might not be available. With regard to high-cost medications, some data, Medicare spending on drugs costs around $130 billion, which is 20% of the total Medicaid expenditure. The Center for Medicare and Medicaid Services reported that the net United States spending on prescription drugs will be higher and faster than any other major health care services over the next decade. And the 2016 United States Government Accountability Office reported that more than 300 genetic drug prices increased over 100% from 2010 to 2015. Discussions on ethical issues with high-cost medication is very unique because usually when we talk about ethical considerations with health care, we discuss issues between the providers and patients. But when it comes to high-cost medications, there are external forces that are involved beyond the traditional doctor and patient relationship. This includes the pharmaceutical companies, the payers, the pharmacy, health systems, and health care financing. Also, the high-cost medication challenges what we refer to as a distributive justice, which states that there should be a fair distribution of benefits and burden across the society. This is a very controversial topic. It all evolves around who should be paying the extra cost of these high-cost medications. Should it be the patient receiving the therapy or the manufacturer who is making profit out of these medications or the government or the insurance company? So what are the causes of these expenses and high increase in medication cost? The most commonly reported reason is that pharmaceutical and biotech industries spend more than 100 billion dollars each year researching and developing new drugs. However, we all know that the main reason for companies to spend on research and development sometimes relies on profit. So usually they will spend more on the medication that will have a highest return. Also, some of these high-cost medications are considered to be a scarce resource. And since it's a scarce resource, it tends to be more expensive, which could be argued against because of the society spend more money, allocate more money for producing these medications. Then these meds are not inherently a scarce resource. Another reason is that once a drug is approved by the FDA, it receives a period of market exclusivity, which prevents production of medication similar to it. So generic products would be produced during that period, which results in keeping these medications expensive. And finally, Medicare is prohibited from negotiating drug prices, even though it's one of the highest national expenditure. They're still not allowed to negotiate for drug prices. This has been recently challenged, and there's some changes occurring with that. So what is the impact of high-cost medications? The mean out-of-pocket cost for commonly prescribed medications increased from $15 up to $300 per month. These are for some Americans who don't have health care insurance, but also patients with insurance can afford some of these high-cost medications. Some of these medications require prior authorization, which takes a long period of time for the providers to fill in the paperwork. To discuss these prior authorization with patients, explain the insurance coverage with patients, which results in delay in access, which results in a delay initiation of treatment, leading to adverse clinical consequences. And perhaps the biggest impact is that patients get involved in self-rationing. There was a study that looked into the impact of high-cost medications and patient adherence to medications, and they reported almost 20% of the patients are skimping on their medications because of the expense related to acquiring these meds, which results in a decrease in adherence and increase in treatment failure. So how do we manage high-cost meds? Unfortunately, there isn't a real solution to this. When it comes to health care, we tend to do rationing and allocation of resources. Rationing with meds could be explicit or implicit. So explicit is based on defining specific criteria for patients to receive specific medication. While implicit is rationing meds without having stated rules. Implicit rationing and explicit rationing might be unfair, but implicit rationing has high risk of bias because not having specific criteria might result in biased decisions. Allocation of high-cost medications can be done in three different ways. It could be a utilitarian approach, which focuses on maximizing the overall benefit to the society, and usually patients who will do better would receive therapies based on this approach. Or it could be a prioritarian approach, and this argues for giving priority for patients who will do worse. Or it could be an egalitarian approach, where there's an equal access for all individuals to the resources. This is similar to what we refer to as a lottery system, so any patient has a chance of receiving the medication. However, this does not include assessing patient specific criteria when it comes to decision-making. Some future direction with related to high-cost medications includes developing biosimilars, which is analogous to generics to biologic drugs. Of course, these medications have high risk, so it should be a decision made between the provider and the patient, and also evaluating these risks associated with these meds. Also, there's a direction toward having a value-based pricing, so it's pricing a drug based on the magnitude of benefit associated with that medication, and also outcome-based contracts. And finally, allowing Medicare to negotiate drug prices would help to driving prices down. Some hospitals follow a value-based formulary management. It's a new concept where to make a decision on adding a specific med to a formulary will based on using a scoring system, so they will grade the data related to efficacy, risk, cost, and societal benefit associated with these meds, and based on the overall score, they will decide on adding a medication to the formulary or not. We can't talk about medications without discussing genetic drugs, so it is a true fact that genetic drug medications do drive the cost down of the medication. There was a study that showed that the higher the number of genetic manufacturers, the greater the reduction in the price cost. Some challenges with genetic drug manufacturing is that it requires an FDA approval, which is a long, tedious process, and an expensive process, which deters manufacturers from actually pursuing having a genetic alternative. Some genetic manufacturers are actually paid or offer payments to delay or abandon producing a genetic drug, and until now, state laws do allow physicians to specify on the prescription that substitution of a genetic drug is not permitted, which delays or prevents using genetic medications and increases the chance of using more expensive alternatives. That's all I have for you. Thank you for listening.

drug shortages

high-cost medications

patient care

causes of drug shortages

economic implications

clinical implications