COVID-19 has focused the nation’s attention on the risks associated with complex, global supply chains, particularly related to healthcare products and prescription drugs. While supply disruptions of personal protective equipment (PPE) captured headlines, the pandemic also compromised the drug supply chain. With much of the United States’ generic drugs manufactured overseas, exportation bans coupled with increased global demand created significant challenges for U.S.-based providers to secure basic, life-sustaining and life-saving therapies.
As an “easy” solution, many are now calling for manufacturers to produce medications domestically. While expanding investment in U.S. drug-making capacity is a vital component of a reliable supply strategy, moving the majority of production onshore is unrealistic.
Creating a dependable drug supply chain is a multi-faceted issue that requires a thoughtful, diversified strategy.
Almost all shortage drugs are older, low-cost generics costing less than $9/dose. Because these products don’t generate blockbuster profits, manufacturers are less willing to invest capital to improve quality, build redundant capacity or source safety stock. Over time, market competition continues to erode price and further compress profits, leading to a war of attrition where competitive players exit the market – leaving behind as few asone or two manufacturers in many important categories.
Relocating production to the United States will not address generic drugs’ inherent profitability problem. Increased regulations, environmental and otherwise, could lead to higher production costs, which begs the question: will healthcare providers trade the potential for higher costs for predictability in supply?
Say the word “shortage” to a healthcare professional and chances are the first thing that will come to mind is drug shortages. With good reason, too – there are more than 100 drugs currently at risk or not readily available for U.S. hospitals, according to the Food and Drug Administration’s (FDA) drug shortage list.
Shortages don’t just apply to drugs, however, and as 2019 has shown, healthcare providers must become more focused on shortages of the medical device variety. The shutdown of multiple medical device sterilization facilities in 2019 is poised to jeopardize the availability of devices that are critical to routine patient care. On Nov. 6, the FDA is hosting a panel to hear from stakeholders, including hospital epidemiologists and healthcare supply chain experts, on the risks associated with facility shutdowns and potential action steps.
The industry as a whole is in need of meaningful solutions. As taxpayers, patients and key stakeholders in healthcare, we must collaborate to eliminate interruptions to our healthcare supply chain. For those invested in improving healthcare from the inside, this means working across competitive boundaries and borrowing best practices from sister industries as we work to identify the root cause of these issues and provide meaningful and preventative solutions.
This week a host of organizations responded to a Senate Finance Committee request for feedback on how to better use healthcare data.
The inquiry is timely, given the widespread frustration providers have with health information technology (HIT), and electronic health records (EHR) systems in particular. This frustration stems from many HIT/EHR systems are locked in proprietary systems. This hinders technology’s ability to connect and exchange information freely between disparate systems, devices and sensors along the care continuum, thus undermining the overall goal of using HIT to improve efficiencies and reduce costs.
An example illustrates the point. Because HIT systems don’t work together, most hospitals use nurses to manually double check input from disparate “smart” devices. For instance, an infusion pump reports the level of pain medication being administered to a patient, as does the EHR. But these numbers sometimes don’t match, and must be double checked by at least two nurses to confirm the right dosing. Not only is this a step back for efficiency, but it’s also another manual process that has the potential to create errors and patient safety issues.
There are also economic consequences of data fragmentation. According to the Office of the National Coordinator (ONC), U.S. providers are spending $8 billion a year due to the lack of interoperability.
To address this problem and reduce the unnecessary fragmentation of healthcare data, it’s time to require the use of open and secure applications programming interfaces (APIs).
In April, a group of America’s leading scientists, named JASON, published a report that found the current lack of interoperability among HIT data sources is a major impediment to the exchange of health information. They recommended that EHR vendors be required to develop and implement APIs that support health data architecture. The recommendation was also endorsed by the President’s Council of Advisors on Science and Technology (PCAST) in May. Requiring open APIs as a foundational standard for healthcare data would reverse the current legacy of locked systems and enable the real-time exchange of information in EHR systems to reduce costs and improve patient safety.