Coping with drug shortages: A study of government-enterprise option cooperation stockpiling strategies for drugs in shortage considering API surrogate stockpiling subsidies.

Drug shortage is a global problem, and the development of government-enterprise cooperative stockpiles of drugs in shortage, combining physical and production capacity, has become one of the most important means of coping with drug shortages. However, existing studies have tended to overlook the fact that shortages of Active Pharmaceutical Ingredients (APIs) have become an important constraint on production capacity stockpiling and that the lack of incentives and provisions for coordination of benefits have led to a double marginal effect of joint stockpiling by government and enterprises of drugs in shortage. Accordingly, this study introduced the option contract to the drug supply system composed of government and pharmaceutical enterprises and used the subsidy of API storage in lieu as an important initiative to incentivize the reserve of APIs, to construct a model of shortage drug reserve under the government's leadership. This study aims to improve the effect of government-enterprise joint stockpiling of drugs in shortage, which is of great theoretical and practical significance. According to the classification of production license types of pharmaceutical enterprises, this study established a three-level supply chain decentralized decision-making model consisting of the government, formulation enterprises, and API enterprises, and a two-level supply chain centralized decision-making model consisting of the government and API Formulation (API-F) integrated enterprises, respectively. By solving the inverse order derivation, the government-enterprise option cooperation conditions and optimal decision-making strategy were derived. The study results showed that: (i) The addition of enterprise API stockpiling mode can help the government conventional reserves, and enterprise production capacity reserves, broaden the way of drug reserves, and improve the effect of government-enterprise option cooperation; (ii) when the probability of drug shortages is high, the government should prefer the cooperation of API-F integrated enterprises, which is conducive to reducing intermediate links and government costs and improving the supply responsiveness to shortages of medicines; (iii) Setting appropriate government subsidies for API storage can incentivize enterprises to stockpile APIs and improve drug production capacity and physical supply response capability. This study took the problem of socialized stockpiling of drugs in shortage as an entry point and explored the problems and solution strategies in the government-enterprise cooperative stockpiling of drugs in shortage, which not only made some theoretical contributions to the application of options contract in the government-enterprise cooperative stockpiling of drugs in shortage but also provided new ideas and theoretical basis for the improvement of the stockpiling work of drugs in shortage.

Cheaper is not always better: Drug shortages in the United States and a value-based solution to alleviate them.

Drug shortages threaten patients' access to medications and are associated with adverse health outcomes and increased costs. Drug shortages disproportionately occur among generic drugs of limited profitability, most notably drugs administered by injection. In this perspective, we discuss how reimbursement and purchasing practices that were meant to create an efficient marketplace for generics have generated strong price pressure that threatens profitability in certain markets. We further explain how, faced with limited profitability, manufacturers lack incentives to invest in resilient supply chains, and in some cases, engage in cost-containment strategies or decide to exit the market, ultimately contributing to shortages. We propose the development and implementation of value-based reimbursement to provide needed incentives for drug purchasers and manufacturers to establish a more reliable supply chain as part of the policy solution to reduce the number and extent of drug shortages. This reimbursement model would necessitate the development of a rating system that measures supply chain resilience and maturity for each generic product. This rating would then be applied as a value-based modifier to reimbursement rates for generic products. The proposed model would result in higher reimbursement rates for generic products from more dependable supply chains, generating incentives for manufacturers to invest in supply chain resiliency. We propose the application of this reimbursement system originally in Medicare given Congressional interest on reforming Medicare payment to prevent drug shortages.

Predicting pharmaceutical prices. Advances based on purchase-level data and machine learning.

BACKGROUND: Increased costs in the health sector have put considerable strain on the public budgets allocated to pharmaceutical purchases. Faced with such pressures amplified by financial crises and pandemics, national purchasing authorities are presented with a puzzle: how to procure pharmaceuticals of the highest quality for the lowest price. The literature explored a range of impactful factors using data on producer and reference prices, but largely foregone the use of data on individual purchases by diverse public buyers. METHODS: Leveraging the availability of open data in public procurement from official government portals, the article examines the relationship between unit prices and a host of predictors that account for policies that can be amended nationally or locally. The study uses traditional linear regression (OLS) and a machine learning model, random forest, to identify the best models for predicting pharmaceutical unit prices. To explore the association between a wide variety of predictors and unit prices, the study relies on more than 200,000 purchases in more than 800 standardized pharmaceutical product categories from 10 countries and territories. RESULTS: The results show significant price variation of standardized products between and within countries. Although both models present substantial potential for predicting unit prices, the random forest model, which can incorporate non-linear relationships, leads to higher explained variance (R2 = 0.85) and lower prediction error (RMSE = 0.81). CONCLUSIONS: The results demonstrate the potential of i) tapping into large quantities of purchase-level data in the health care sector and ii) using machine learning models for explaining and predicting pharmaceutical prices. The explanatory models identify data-driven policy interventions for decision-makers seeking to improve value for money.

A proposed analytical framework for qualitative evaluation of access to medicines from a health systems perspective.

OBJECTIVE: Despite global recognition that access to medicines is shaped by various interacting processes within a health system, a suitable analytical framework for identifying barriers and facilitators from a system's perspective was needed. We propose a framework specifically designed to find drivers to access to medicines from a country's health system perspective. This framework could enable the systematic evaluation of access across countries, disease areas and populations and facilitate targeted policy development. This framework is the byproduct of a larger study on the barriers and facilitators to childhood oncology medicines in South Africa. RESULTS: Eight core (pharmaceutical) functional processes were identified from existing frameworks: (I) medicine regulation, (II) public financing and pricing, (III) selection, (IV) reimbursement, (V) procurement and supply, (VI) healthcare delivery, (VII) dispensing and (VIII) use. National contextual components included policy and legislation and health information systems. To emphasize the interlinkage of processes, the proposed framework was structured as a pharmaceutical value chain. This framework focusses on national processes that are within a country's control as opposed to global factors, and functional mechanisms versus a country's performance or policy objectives. Further refinement and validation of the framework following application in other contexts is encouraged.

Citizens' views on prices of medicines reimbursed by the National Health Service: Findings from Italian online focus groups.

INTRODUCTION: Access to medicines is one of the biggest challenges to health systems, affecting society and individuals. This study aims to explore citizens' opinions, perceptions and attitudes on the model of medicines' research and development (R&D) and price setting of medicines reimbursed by the Italian National Health Service. MATERIALS AND METHODS: We run four online focus groups, analysed through thematic analysis. INCLUSION CRITERIA: people aged 30-70 years, who had completed at least compulsory schooling (8-10 years), with no specialised knowledge about the subject. EXCLUSION CRITERIA: healthcare workers, pharmaceutical and device industry employees, researchers and medicine policy board members. We aimed to include a purposive sample of 20 participants, variable in terms of age, educational level and place of residence. RESULTS: Eleven women and six men participated. The mean age was 53 years (range: 28-73). Most (n = 15) had a university degree or attended secondary schools. Eight had a job, five were not employed, and four were retired. In general, participants supported the role of the public health service. Almost all had limited knowledge of medicines' R&D and price setting. Most asked for transparency on medicine prices and negotiation criteria. Participants considered revenues of pharmaceutical companies disproportionate and most called for containment measures of profits. Most were in favour of a stronger public intervention in R&D and prices' negotiations. Few were sceptical of the public sector's ability to play this role. DISCUSSION: Medicines' prices were discussed as a health matter. Increasing citizens' awareness of these topics is needed by providing spaces and conditions to participate in the discussion, including different perspectives and interests. PATIENT OR PUBLIC CONTRIBUTION: Members of BEUC-the European consumer organisation-proposed the project. Altroconsumo, an independent consumer organisation and OCU, a Spanish consumer organisation, participated in developing the project and the main topics to discuss. The Mario Negri Institute and Aplica cooperative-the Spanish methodological team-were involved by BEUC and their national organisations to define the methodology, organisational aspects and contents and conducted the focus groups.

Why are our medicines so expensive? Spoiler: Not for the reasons you are being told .

Often described as a natural economic trend, the prices that pharmaceutical companies charge for new medicines have skyrocketed in recent years. Companies claim these prices are justified because of the 'value' new treatments represent or that they reflect the high costs and risks associated with the research and development process. They also claim that the revenues generated through these high prices are required to pay for continued innovation.This paper argues that high prices are not inevitable but the result of a societal and political choice to rely on a for-profit business model for medical innovation, selling medicines at the highest price possible. Instead of focusing on therapeutic advances, it prioritises profit maximisation to benefit shareholders and investors over improving people's health outcomes or equitable access.As a result, people and health systems worldwide struggle to pay for the increasingly expensive health products, with growing inequities in access to even life-saving medicines while the biopharmaceutical industry and its financiers are the most lucrative business sectors.As the extreme COVID-19 vaccine inequities once again highlighted, we urgently need to reform the social contract between governments, the biopharmaceutical industry, and the public and restore its original health purpose. Policymakers must redesign policies and financing of the pharmaceutical research and development ecosystem such that public and private sectors work together towards the shared objective of responding to public health and patients' needs, rather than maximising financial return because medicines should not be a luxury.

Hospital Prices for Physician-Administered Drugs for Patients with Private Insurance.

BACKGROUND: Hospitals can leverage their position between the ultimate buyers and sellers of drugs to retain a substantial share of insurer pharmaceutical expenditures. METHODS: In this study, we used 2020-2021 national Blue Cross Blue Shield claims data regarding patients in the United States who had drug-infusion visits for oncologic conditions, inflammatory conditions, or blood-cell deficiency disorders. Markups of the reimbursement prices were measured in terms of amounts paid by Blue Cross Blue Shield plans to hospitals and physician practices relative to the amounts paid by these providers to drug manufacturers. Acquisition-price reductions in hospital payments to drug manufacturers were measured in terms of discounts under the federal 340B Drug Pricing Program. We estimated the percentage of Blue Cross Blue Shield drug spending that was received by drug manufacturers and the percentage retained by provider organizations. RESULTS: The study included 404,443 patients in the United States who had 4,727,189 drug-infusion visits. The median price markup (defined as the ratio of the reimbursement price to the acquisition price) for hospitals eligible for 340B discounts was 3.08 (interquartile range, 1.87 to 6.38). After adjustment for drug, patient, and geographic factors, price markups at hospitals eligible for 340B discounts were 6.59 times (95% confidence interval [CI], 6.02 to 7.16) as high as those in independent physician practices, and price markups at noneligible hospitals were 4.34 times (95% CI, 3.77 to 4.90) as high as those in physician practices. Hospitals eligible for 340B discounts retained 64.3% of insurer drug expenditures, whereas hospitals not eligible for 340B discounts retained 44.8% and independent physician practices retained 19.1%. CONCLUSIONS: This study showed that hospitals imposed large price markups and retained a substantial share of total insurer spending on physician-administered drugs for patients with private insurance. The effects were especially large for hospitals eligible for discounts under the federal 340B Drug Pricing Program on acquisition costs paid to manufacturers. (Funded by Arnold Ventures and the National Institute for Health Care Management.).

Portuguese Global Medicines Access Index 2021: An Indicator to Measure Access to Hospital Medicines.

OBJECTIVES: Access to innovative and effective medication is a citizen's right. The main objectives of this study were to build an indicator to measure access to medicines within hospitals, the Global Medicines Access Index, and to identify the main existing barriers. METHODS: Cross-sectional study carried out in Portuguese National Health Service hospitals. A consensus methodology (expert panel of 7 members) was used to define which dimensions should be included in the index and the weighting that each should take. The panel identified 6 dimensions: access to innovative medicines, proximity distribution, shortages, access to medicines before financing decision, value-based healthcare, and access to medication depending on cost/funding. Data were collected through an electronic questionnaire (September 2021). RESULTS: The response rate was 61.2%. Most hospitals used medicines with and without marketing authorization before the funding decision. Monitoring and generating evidence of new therapies results is still insufficient. The identified barriers were the administrative burden as the major barrier in purchasing medicines, with a relevant impact on shortages of medicines. Most respondents (87%) had a proximity distribution program, mainly implemented in the pandemic context, and the price/funding model was only identified by 10% as a barrier to access. The 2021 Global Medicines Access Index was 66%. Shortages and value-based use of medicines were the dimensions that had more influence in lowering the index value. CONCLUSIONS: The new formula used to obtain a unique and multidimensional index for access to hospital medicines seems to be more sensitive and objective and will be used to monitor access.

Assessment of the Global Fund-supported procurement and supply chain reforms at the Ethiopian Pharmaceuticals Supply Agency: a mixed-methods study.

OBJECTIVE: The Global Fund to Fight AIDS, Tuberculosis and Malaria (Global Fund) partnered with the Ethiopian Pharmaceutical Supply Agency (EPSA) in 2018-2019 to reform procurement and supply chain management (PSCM) procedures within the Ethiopian healthcare system. This assessment sought to determine the impact of the reforms and document the lessons learnt. DESIGN: Mixed-methods study incorporating qualitative and quantitative analysis. Purposive and snowballing sampling techniques were applied for the qualitative methods, and the data collected was transcribed in full and subjected to thematic content analysis. Descriptive analysis was applied to quantitative data. SETTING: The study was based in Ethiopia and focused on the EPSA operations nationally between 2017 and 2021. PARTICIPANTS: Twenty-five Ethiopian healthcare decision-makers and health workers. INTERVENTION: Global Fund training programme for health workers and infrastructural improvements OUTCOMES: Operational and financial measures for healthcare PSCM. RESULTS: The availability of antiretrovirals, tuberculosis and malaria medicines, and other related commodities, remained consistently high. Line fill rate and forecast accuracy were average. Between 2018 and 2021, procurement lead times for HIV and malaria-related orders reduced by 43.0% relative to other commodities that reported an increase. Many interview respondents recognised the important role of the Global Fund support in improving the performance of EPSA and provided specific attributions to the observed successes. However, they were also clear that more needs to be done in specific critical areas such as financing, strategic reorganisation, data and information management systems. CONCLUSION: The Global Fund-supported initiatives led to improvements in the EPSA performance, despite several persistent challenges. To sustain and secure the gains achieved so far through Global Fund support and make progress, it is important that various stakeholders, including the government and the donor community, work together to support EPSA in delivering on its core mandate within the Ethiopian health system.

Impact of China's National Centralized Drug Procurement Policy on pharmaceutical enterprises' financial performance: a quasi-natural experimental study.

Introduction: In China, the interest relationship between pharmaceutical enterprises and medical institutions has harmed the healthy development of pharmaceutical enterprises. In November 2018, the National Centralized Drug Procurement (NCDP) policy was published. The NCDP policy severs the interest relationship and significantly impacts on pharmaceutical enterprises's financial performance. Methods: Using the implementation of China's National Centralized Drug Procurement (NCDP) policy as a quasi-natural experiment, this study evaluated the impact of participation in the NCDP policy on pharmaceutical enterprises' financial performance. We developed a difference-in-difference model to estimate the change in financial performance after NCDP implementation, based on financial data on Chinese listed pharmaceutical enterprises. Results: We found that the bid-winning enterprises' financial performance significantly improved after participating in NCDP. This may be related to lower costs, market share expansion, and increased research and development investment by the bid-winning enterprises. Discussion: To further promote the high-quality development of pharmaceutical enterprises in China, the government should expand the variety of drugs on the NCDP list (NCDP drugs), while improving the drug patent protection system and the policies to support the bid-winning enterprises.

The Problem of Limited-Supply Agreements for Medicare Price Negotiation.

This Viewpoint discusses how limited-supply agreements (introduction of generic products in reduced volumes) might thwart efforts to negotiate lower prices on prescription drugs in the US.