The Drug Supply Chain Macro aspects Monday September 19, 2011 David KnappToday’s objectives • Role of pharmacy in the drug supply chain • Describe the significant players • Examine current issues affecting drug distributionHistory • Discovering active ingredients • Obtaining and manufacturing drug products • Compounding dosage forms • Purity and safety of drug supply • Drug distributionRegulation of the Drug Supply • Early regulation of importation of drugs • Evolution of drug regulation – Purity – Safety – Efficacy • Role of state and local governmentsNational Supply of Pharmaceuticals • 1,200 Distinct chemical entities • 2,000 Drug products (single entities and combinations) • 8,000 Branded and generic products • 10,000 Unique strengths • 14,000 Unique dosage forms and strengths • 15,000 OTC and herbal productsPharmacy’s Role • Assure the integrity of the drug supply • Making sure that patients can receive: – The right drug products – In the right quantities – At the right time – At the right priceMacro and Micro roles for pharmacist • Familiar with micro role- front-line pharmacist • Macro roles include influences at every stage of drug supply chain • Oversight of entire systemThe drug supply chain • Manufacturers – Brand (PhRMA) – Generics Note: 80% of the active ingredients in US drug products are manufactured overseas • Repackagers • Full service wholesalers • Specialty wholesalersFull service wholesalers • Manufacturers’ biggest customers • Main source of drug products for pharmacies • Services • “Big three” now control 90-95% of wholesale market for drugsImplications for drug supply • Increase efficiency • Offer many services besides middleman • Downside: oligopolyRepackagers • Purchase generics and supply trademarked products to sellers • “In-house” repackaging by pharmacy chains or independent buying groups • Hospital repackagingSpecialty pharmaceuticals • Now account for over 20% of market (in $$) • Expensive personalized medicine (biotech drugs such as Avastin, Herceptin)…more players • Distribution centers – Operated by retailers (chains, groceries, mass merchandisers, etc) – Hospital consortiaStill others • Buying groups – Community pharmacies – Hospitals • Government purchasers and payers – VA, PHS, etc – Medicare – MedicaidIssues with drug distribution • Drug shortages • Counterfeiting • Importation • ReimportationDrug Shortages • Scope and severity • Causes…Shortages • Communication issues - transparency • Potential solutions – Expanded FDA authority to require manufacturers to notify of impending shortages – Expedited approval for pre-1938 drugs – Incentives for manufacturers to stay in market for vulnerable drugsImportation Issues • Definition: bringing in goods from a foreign country for trade or sale. – Legal only when done by manufacturer or wholesaler from an FDA-approved foreign facility. • Any other large-scale importation usually involves counterfeiting or other illegal subversion of drug supply.Reimportation Issues • Definition: Bringing back into the US products previously exported to other countries. – Legal for the original manufacturer – Exception: individuals importing drugs for personal use • Influence of drug prices • Legal status • ControversyReimportation cont. • Influence of drug prices • Legal status • ControversySummary • Assuring integrity of drug supply chain • Role of full-service wholesalers • Growing importance of specialty drugs • Decline in brand-name drugs; growth of generics • Issues: shortages, counterfeiting, importation,