Medication Supply And Distribution (PDF)

Medication Supply and Distribution JULIE WILKINSON, PHARMD, MS, BCPS Learning Objectives  Discuss roles and functions of the pharmaceutical industry  Explain the interactions between the Food and Drug Administration (FDA) with the pharmaceutical industry  Discuss the drug distribution...

Medication Supply and Distribution JULIE WILKINSON, PHARMD, MS, BCPS Learning Objectives  Discuss roles and functions of the pharmaceutical industry  Explain the interactions between the Food and Drug Administration (FDA) with the pharmaceutical industry  Discuss the drug distribution system in the United States  Explain concerns related to counterfeiting and drug shortages  Describe the concept of a drug pedigree  Discuss concerns about prescription drug marketing Pharmaceutical Market  Global pharmaceutical annual market almost 1.3 trillion US dollars in 2020  US spending is estimated between $350 to $595 billion  Annual growth rate of 3.6% between 2012-2017  In 2007, 40% of medications in development started in the US https://www.statista.com/statistics/275535/distribution-of-global-pharmaceutical-market-revenue/ https://www.hsph.harvard.edu/ecpe/snapshot-of-the-american-pharmaceutical-industry/   Brand name drug  The original product  Carries a trademark name  Exclusivity Pharmaceutical Products  Generic drug  Not protected by trademark  A drug manufactured after patent expiration  Multiple companies may compete https://www.hda.org/~/media/pdfs/publications/hda-role-of-distributors-in-the-us-health-care-industry.ashx   High cost (approx. $6000 or more per year) Prescribed by a specialist physician Specialty   Not self-administered Pharmaceuticals  Supply chain concerns (refrigeration, biohazard)  Safety issues require unique monitoring  33% of pharmacy revenue in 2017 and rising Biological Pharmaceutical Products  Isolated from natural sources –  Reference product human, animal, microorganism  Original product approved by  Composed of sugars, proteins, FDA nucleic acids  Biosimilar product  May be heat sensitive,  Highly similar based on analysis susceptible to microbial of purity, chemical identity, and contamination bioactivity  Examples  No clinically meaningful differences from the reference  Vaccines product in safety, purity, and  Blood potency of both safety and effectiveness  Cell-based  Gene therapy  Recombinant proteins https://www.fda.gov/files/drugs/published/Biological-Product-Definitions.pdf Prescription Spending  Over 4 billion prescriptions are filled per year in the US  Recent comparison of medication prices showed the US costs were 2-4 times higher than in the comparison countries of Australia, Canada, and France  North America accounted for 48.9% of world pharmaceutical sales in 2018  65.2% of sales of new medicines were launched in the US market gao.gov/products/gao-21-282 https://www.gao.gov/prescription-drug-spending https://www.efpia.eu/media/412931/the-pharmaceutical-industry-in-figures-2019.pdf  Value of Medicines  Medications are the most cost-effective, least invasive, and preferred option for most medical conditions https://www.efpia.eu/media/412931/the-pharmaceutical-industry-in-figures-2019.pdf Primary Flow of Medications Manufacturers Distributors Dispensers Patients Players in Pharmaceutical Distribution Payor Insurance company offering a policy for coverage of medication. Provider Health care entity that prescribes medications. In some settings the provider may dispense pharmaceuticals. Manufacturer Company that makes pharmaceuticals Distributor Purchases products from manufacturers, stores, transports Group purchasing Aggregate purchasing volume of multiples providers and pharmacies to organization (GPO) negotiate discounts with manufacturers Pharmacy benefit Negotiates formularies for medication coverage and cost with providers manager (PBM) and pharmacies Pharmacy services Provides consulting services and negotiation of contract with PBMs and administration payors for smaller pharmacies organization (PSAO) Distributors of Pharmaceuticals  Obtain the drugs from manufacturers  Distribute drugs to authorized recipients  Community pharmacies  Hospital pharmacies  Examples  Amerisource/Bergen  Cardinal  McKesson Drug Supply Chain Security Act  Aims to protect against counterfeit, contaminated, or stolen drugs  Requires end-to-end traceability of prescription pharmaceuticals through interoperable electronic systems  All trading partners must be authorized  Enables saleable returns Counterfeit  Appear identical to the original product  Result – immeasurable patient harm  Questions to consider  Does the drug or packaging look different than normal?  Has the patient had a new or unusual side effect?  Was the product purchased from an internet pharmacy? Protection Against Counterfeit  Pedigree system – record of each prior sale, purchase, or trade of medications  Drug traceability – “track and trace” transactions throughout the supply chain  Bar code  Radiofrequency identification (RFID) technology  Block chain – decentralized and distributed ledger system Safe Online Pharmacies  FDA resource: BeSafeRx: Resources for Health Professionals  BeSafeRx: Resources for Health Professionals Importation of Prescription Drugs  Ability to purchase from other countries  FDA was recently charged to work with states to import prescription drugs from Canada and other countries  Pharmaceutical manufacturers have filed a lawsuit to prevent this  Prices in Canada are 28-46% of the US price  Canada’s Patented Medicine Prices Review Board regulates drug prices https://www.kff.org/medicare/issue-brief/10-faqs-on-prescription-drug-importation/ Importation - Background  Food Drug and Cosmetic (FD&C) Act of 1938 requires only FDA approved products to be imported to and sold in the US  Medicare Modernization Act of 2003 allowed importation from Canada under certain conditions including approval by the US Health and Human Services Secretary  Disruption to the “closed” system brings concerns of counterfeit, substandard, unapproved products to enter the supply chain https://www.kff.org/medicare/issue-brief/10-faqs-on-prescription-drug-importation/ Importation  Some states have begun passing legislation to allow importation from other countries  Must submit a proposal to the HSS to show the plan to meet safety and cost savings requirements of the federal rules  Personal importation of non-FDA approved drugs is allowed in some circumstances including a serious condition with no effective alternative approved in the US  Personal importation of FDA-approved drugs is illegal, but not generally enforced https://www.kff.org/medicare/issue-brief/10-faqs-on-prescription-drug-importation/ Reimportation  Importation of drugs that were produced in the US and exported to another country  This option has been discussed as a way for individuals to achieve lower medication costs https://www.kff.org/medicare/issue-brief/10-faqs-on-prescription-drug-importation/ Stakeholder Views on Importation  PhRMA, AMA, APhA have expressed concerns  Patient and pharmacy confusion  Disruptions in health care  Potential for unexpected increases in costs  American Association for Retired Persons (AARP) and National Federation of Independent Businesses (NFIB) express support  General public – 78% favor importation from licensed pharmacies in Canada https://www.kff.org/medicare/issue-brief/10-faqs-on-prescription-drug-importation/ What is the FDA?  Food and Drug Administration  Established in 1906 with the Pure Food and Drugs Act  Part of the Department of Health and Human Services  Separate centers regulate:  Drugs (CDER - Center for Drug Evaluation & Research)  Biologics (CBER – Center for Biologics Evaluation and Research)  Medical Devices  Food  Cosmetics  Animal and Veterinary  Radio-Emitting Products  Tobacco Products   Approves drugs  Ensures safety of drugs and manufacturers  Communicates safety information to providers and the public  Recalls drugs  Communicates shortages FDA  Provides drug information  Regulates labeling and advertising  Regulates good manufacturing practices  Creates Risk Evaluation and Mitigation Strategies (REMS)  Conducts postmarketing surveillance for unanticipated problems after approval Drug Recalls  Protect the public from defective or harmful products  May be initiated by the company or at FDA request  FDA conducts oversight and provides classification:  Class I: A dangerous or defective product that could cause serious health problems or death  Class II: A product that might cause a temporary health problem, or pose slight threat of a serious nature  Class III: A product that is unlikely to cause any adverse health reaction, but that violates FDA labeling or manufacturing laws Drug Recalls  Lot numbers are used to find the affected products  Public notice depends on the extent of the recall  FDA website includes specific details of each recall  https://www.fda.gov/safety/recalls-market-withdrawals-safety-alerts  Drug Shortages  Interruptions in care – delays and substitutions  Reasons  Lack of incentives for manufacturers to produce drugs that are less profitable  No market incentive for companies to have risk management and back-up manufacturing capabilities  No incentive for early recognition of supply chain issues  Logistical and regulatory challenges to recovering after a disruption https://www.fda.gov/drugs/drug-shortages/report-drug-shortages-root-causes-and-potential-solutions  Drug Shortages  Potential to improve  Lengthened expiration dates  Improved data sharing  Risk management plans  Quantification of shortages and the harm caused  Changes to contract terms and ratings of quality processes  American Society of Health-System Pharmacists provides information and resources for pharmacists to respond  https://www.ashp.org/drug-shortages/current- shortages?loginreturnUrl=SSOCheckOnly https://www.fda.gov/drugs/drug-shortages/report-drug-shortages-root-causes-and-potential-solutions REMS  Risk Evaluation and Mitigation Strategies (REMS) REMS Overview :  REMS are required risk management plans that use risk minimization strategies beyond the professional labeling to ensure that the benefits of certain prescription drugs outweigh their risks.* A list of FDA approved REMS is available at http://www.fda.gov/Drugs/DrugSafety/PostmarketDrugSafetyInformationf orPatientsandProviders/ucm111350.htm Elements to Assure Safe Use  ETASU requirements are intended to reduce a specific serious risk listed in the labeling of the drug.  Depending on the risk, A REMS may require any or all of the following:  Prescribers have specific training/experience or special certifications  Pharmacies, practitioners or healthcare settings that dispense the drug be specially certified  Drug be dispensed only in certain healthcare settings (e.g., infusion settings, hospitals)  Drug be dispensed with evidence of safe-use conditions such as laboratory test results  Each patient using the drug be subject to monitoring  Each patient using the drug be enrolled in a registry User Fees  Prescription Drug User Fee Act (PDUFA) of 1992 required manufacturers of brand name drugs to pay a user fee to help fund FDA approval costs  FDA agrees to time goals for completion of reviews  Generic User Fee Amendments of 2012 (GDUFA) requires generic manufacturers to identify themselves & pay fees  Renewals of the acts have included funding for safety surveillance and improved communication between FDA and drug sponsors What contributes to high drug prices?  Companies can charge what “market will bear”  Specialty meds for conditions like autoimmune diseases, hepatitis C and cancer are increasing  Lobbyists influence lawmakers  Medicare unable to negotiate for pricing  Mergers and acquisitions of drug companies  Pay to delay  Greed?  Turing example raising price of Daraprim (antiparasitic) from $17.50 to $750 in 2015 Intellectual Property Terms  Patent - Granted by the U.S. Patent and Trademark Office (PTO)  gives the owner the right to exclude others from making, using or selling for a fixed period of time.  Patents are in effect for 20 years, beginning on the date of application to the PTO.  Effective Patent Life - portion of the patent term that remains after clinical testing and FDA review.  Orphan drug status is given for treatments of rare diseases affecting less than 200,000 persons in the US  7-year period of exclusivity after product approval Source: National Institute for Healthcare Management, Available online: http://www.NIHCM.org  Advertise products to prescribers Sales representatives are restricted to discussing the official product labeling Provide incentives for managed care organizations Marketing and and health systems to add the drugs to formularies detailing Provide samples to prescribers to get patients on the medications Patient assistance programs to supply the drug to patients at no cost with documented financial need Direct-to-consumer advertising Off-Label Use  Non-FDA-approved (“off-label”) indications are uses of a product that were not approved by the FDA  FDA does not prohibit off-label use  Non-FDA-approvedindications cannot be promoted by the manufacturer  Providers are responsible for reasonable, evidence-based use of medications  Brand manufacturer pays generic company NOT to market the generic Stifle competition and maintain market share Pay-for-Delay Federal Trade Commission (FTC) estimates the deals cost consumers $3.5 billion in higher drug costs annually The deals are illegal under antitrust laws and cases are detailed on the FTC website https://www.ftc.gov/news-events/media-resources/mergers-competition/pay-delay  Direct-to-Consumer Advertising (DTCA) 1997: FDA allows DTC provided “adequate provision” of information requiring fairly balancing risks and benefits. Research regarding DTC show mixed effects: One study (Berndt, 2005), reported 40% of physicians believed it was positive, 30% negative, 30% no effect. Pros: Educate consumers about conditions and symptoms; increased compliance; enhanced communication between physicians and patients Cons: Increased promotional expenditures increase price; increased demand [i.e. create demand or activate latent demand)] that increases price and/or consumer expenditures Only the U.S. and New Zealand permit DTC. Academic detailing  Also called counter-detailing  May be provided by pharmacists or pharmacy departments  Provides fair and unbalanced information to see the whole picture  May include pharmacoeconomic analysis to show best value  Insurance plans may use detailing to promote formulary compliance