As pharmaceutical manufacturers are expected to prioritize vaccine production for the nation’s COVID-19 response, Premier data finds that a range of drugs critical to patient care are slipping into shortage.
Alongside the emergence of the Omicron variant and ongoing disease spikes, the prioritization of COVID-19 vaccine production is both rational and prudent. However, a highly consolidated supply chain has created unreasonable demand and overreliance on manufacturers who find challenges in expanding production or shifting capacity in a resource-constrained environment.
Follow the Fill Rate
Knowing and understanding fill rates, the rate at which medicine purchase orders are filled and shipped, is a foundational component to pharmaceutical supply chain management and preparedness. A strong fill rate is at or near 100 percent, meaning suppliers can fulfill customer demand without stockouts, backorders or lost sales.
Premier leverages fill rate trends as one mechanism to help determine the health of the supply chain. For drugs, we consider a healthy fill rate to be above 90 percent, and anything that falls below 80 percent is an early indication that demand is outpacing supply and that shortages may be imminent.
For instance, consider the fill rate trends for methylprednisolone acetate injection. Premier’s data as of December 2021 indicates that fill rates have been below 80 percent since at least August 2021 and continue to trend downwards. In the graph below:
- The red line reflects total units member hospitals have ordered through their wholesalers;
- The yellow line reflects the total units hospitals received through their wholesaler; and
- The blue line reflects the subsequent fill rate.
Source: Premier purchasing and fill rate data
Methylprednisolone acetate is often used to treat pain and swelling that occurs with a variety of conditions, and the current fill rates are not adequate to deliver quality patient care. This particular drug shortage is a result of two of the three FDA-approved suppliers encountering manufacturing issues simultaneously.
- Per the American Society of Health-System Pharmacists (ASHP), Pfizer is facing shortages due to increased volume and capacity being dedicated to vaccine manufacturing and is not expected to recover its methylprednisolone acetate injection production until 2023.
- Another supplier is experiencing quality issues with their facility and does not have a date for when product will reenter the marketplace.
- Consequently, we are left with just one supplier in the market at this time trying to meet demand for this product.
On Dec. 7, 2021, Premier formally reported a shortage of methylprednisolone acetate injection to the FDA. On Dec. 16, 2021, the FDA added this product to their drug shortage list.
Unfortunately, methylprednisolone acetate is not the only product to slip into shortage as the main producers of generic drugs and raw materials are forced to prioritize COVID-19 vaccines as well as vaccine-related supplies and components ahead of routine production schedules. Similar dynamics exist for a range of essential products (see chart below).
Source: Premier purchasing and fill rate data
Monitoring fill rate data has allowed Premier to provide early communication to both our members and the FDA on potential or impending shortages related to COVID-19 vaccine production. The faster we can respond by working with suppliers to shore up production and working with our members to review clinical protocols and patient demand, the more likely we are to protect patient care in the U.S. COVID-19 vaccine production is not slowing down ─ and maintaining diligent review of the market will be critical to enabling access to vital therapies for providers and patients.
For more than two decades, Premier has been a leader in mitigating pervasive drug shortages. We’ve built forward-thinking capabilities to help protect the drug supply chain in times of disruption – which is why our members are faring better during COVID-19 than most others.
- ProvideGx® leverages aggregated demand from Premier members via a committed “buyers’ club” strategy – giving drug manufacturers proper demand signaling, predictable revenue and the surety needed to ramp up production or enter new markets. Efforts are paying off as members have weathered demand spikes of 150 percent or more since March 2020 – with limited interruptions in supply. And the program is having a long-lasting impact on the industry overall, as 14 products added to ProvideGx have subsequently been delisted from the FDA drug shortage list.
- Leveraging the ProvideGx platform, Rapid Commit™ assists Premier members with short-term drug market supply disruptions. Rapid Commit facilitates commitment to purchase orders for pre-approved quantities at specific limited time offers, enabling product availability while also driving cost savings.
- PremierProRx®, our private label program, focuses primarily on sterile injectable products and has protective coverage for 136 NDCs (as of Dec. 13, 2021) that are currently on the drug shortage list.
- Together with our members, we’re supporting greater drug supply chain competition, diversity and domestic production through our investments in pharmaceutical manufacturers Exela and VGYAAN.
- Premier’s own distribution partner, FFF Enterprises, helps enable timely access to products and support. Premier works with FFF and our members to dynamically allocate products to members based on clinical need in addition to purchase history, which facilitates a nimble response during tight constraints.
- With market intelligence on production capacity and release of key products, Premier nimbly connects suppliers with providers who are in need. We build trusted supplier relationships to enable open communication and sourcing avenues, and keep a keen focus on quality, redundancy and sustainability when vetting suppliers.
- We are championing advocacy efforts on behalf of healthcare providers through Premier’s Advocacy Team in Washington D.C. During the pandemic, we’ve secured more than 50 regulatory and legislative changes to enable providers’ COVID-19 response.
And we will continue to leverage our robust data capabilities to help identify and predict drug shortages and alert the FDA and ASHP, as well as proactively implement shortage mitigation strategies for our members.
About Premier’s Data
Premier tracks hospitals’ purchasing data for pharmaceuticals and supplies through its group purchasing organization, which serves 4,400 U.S. hospitals and health systems and more than 225,000 non-acute providers. Our data provides a strong early indicator of how hospitals are prioritizing drugs, devices and supplies in their efforts to treat and mitigate COVID-19 and deliver patient care overall.
- Learn about our investments in Exela and VGYAAN to secure and support domestic and diverse drug supply and manufacturing.
- See how ProvideGx is helping to tackle drug shortages and enable greater access to at-risk products.