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Drug Distributors Mitigate Coronavirus

  • Despite a growing number of supply chain obstacles, supplies of essential medicines have remained stable – to date.

  • Drug distributors and manufacturers sourcing products and ingredients around the world are facing new trade barriers and shortages related to the care of COVID-19 patients. 

  • As the coronavirus pandemic drags on, product shortage mitigation strategies and supply chain contingency plans will be critical.

First, the good news. Major drug shortages of essential medicines for chronic diseases so far have been avoided, despite a global coronavirus pandemic infecting over 1.4 million people and causing over 80,000 deaths as of 7 April, 2020 .

To date, heart medications have been available, patients with diabetes have not faced insulin shortages and cancer patients, with some specific exceptions discussed below, have been getting the therapies they need. At the US border, “we haven’t seen any problems with imports and exports [of medicines] so far; everything is status quo,” said Anthony Orosz, assistant director, US Customs and Border Patrol, Pharmaceutical Center of Excellence and Expertise, on a 26 March webcast hosted by Rx-360, a pharmaceutical supply chain consortium. On 7 April, China announced zero COVID-19 deaths recorded, the first mortality-free day in that country since the coronavirus took hold over two months ago.   

The bad news, of course, is that the situation is changing minute to minute, as COVID-19 prompts new business closures, new international trade restrictions and new mitigation requirements that ripple across the economy, into pharmacies, and into patients’ lives. So far, no single medication or regimen has definitively proven to be an effective treatment against COVID-19, but there are many reasons to be hopeful: around the world, over 600 clinical trials are testing over 140 drugs against the SARS-CoV-2 virus and related conditions, according to Trialtrove and Pharmaprojects data as of 7 April. The downside of all that activity, particularly the clinical testing of existing therapies – such as hydroxychloroquine or tocilizumab, for example – is that patients relying on those treatments for other conditions may find them harder to access as the pandemic rages on.

On 23 March, the FDA approved a clinical trial testing Genentech Inc.’s Actemra (tocilizumab) in hospitalized patients with severe COVID-19 pneumonia, a positive development for sick patients. However, physicians administering chimeric antigen receptor T cell (CAR-T) therapies need tocilizumab for the treatment of a common inflammatory toxicity called cytokine release syndrome, which can be deadly. “With CAR-T therapies, you have to have tocilizumab, and that’s not something we ever thought we’d have trouble getting, but it’s a real concern,” said Niesha Griffith, executive director and interim chief pharmacy officer at City of Hope, a freestanding cancer center in California, during a Journal of Clinical Pathways “Outspoken Oncologist” webcast in early April. “We haven’t had any shipment-related problems. Our wholesaler is sourcing from other warehouses … to meet the needs of our cancer patients.” As if to demonstrate shifting supply chain dynamics in real-time, Outspoken Oncologist webcast host Chadi Nabhan noted in closing that two hours after Griffith made those recorded comments, she received an email from AmerisourceBergen, a large drug distributor, reporting higher than normal ordering volumes, and that customers should expect delayed deliveries in the coming weeks. The email also announced that AmerisourceBergen would modify all daily ordering cutoff times to 7:00pm for next-day orders, according to Nabhan.

Action By Drug Distributors

On 28 March– following a request made by the Healthcare Distribution Alliance (HDA), a drug distributor trade organization – the US Department of Homeland Security’s Cybersecurity & Infrastructure Security Agency confirmed drug distributors as an “essential critical infrastructure workforce.” This allows distributors to enter quarantine areas for delivery, access available cleaning and sanitation resources, and continue operating their businesses on the front lines of the pandemic.     

Erin Horvath, president, distribution services at AmerisourceBergen, told In Vivo that as of mid-March, the company had been notified of a “small amount” of drug shortages due to COVID-19. “Fortunately, the impacted products have therapeutic alternatives available,” said Horvath. “To protect access to vital medications, we are taking broad action to lift inventory across the board.” When the coronavirus outbreak began, AmerisourceBergen “immediately began anticipating products that providers, pharmacies and health systems would face more demand for, such as diabetes test kits and heart medication,” said Horvath. “We are also working with our pharmacies to ensure that they can accommodate patients with longer-term fills, such as 90-day prescriptions as opposed to 30-day fills.” 

“To protect access to vital medications, we are taking broad action to lift inventory across the board.”
- Erin Horvath

Horvath sits on the board at Healthcare Ready, a non-profit formerly known as Rx Response and comprised of leaders from the biopharmaceutical, drug distributor and retail pharmacy sectors, as well as academic, non-profit and government representatives. Health Ready’s mission is to facilitate collaboration between public health agencies and the private sector to strengthen the supply chain and protect patient access to health care during disasters. While many health systems have reported problems in securing an adequate amount of personal protective equipment (PPE) and ventilators in response to COVID-19, medicines – so far – have remained accessible. “During Hurricane Maria’s impact to Puerto Rico in 2017, AmerisourceBergen established collaborative efforts with the Federal Emergency Management Agency (FEMA), Healthcare Ready, Healthcare Distribution Alliance and Walgreen’s, along with other federal and regional officials, to work through a broad range of issues with logistics, securing government clearances, fuel deliveries, et cetera,” said Horvath. “Should COVID-19 lead to logistics issues of this nature, we would work in a similar manner to continue fulfilling deliveries of medications to the best of our ability.”

Patients taking maintenance therapies have been advised to request 90-day prescription fills to limit trips to the pharmacy, and the FDA is working to prevent artificial shortages, due to stockpiling or hoarding of medications. The FDA has begun to take “proactive steps to make sure that patients can access medications that are medically appropriate and necessary,” according to a 28 March statement from Stephen Hahn, FDA Commissioner. “Some retail pharmacies have begun implementing policies designed to limit the overprescribing and overdispensing of certain medications in order to preserve the supply nationally. We are also aware that a number of states have taken action to limit the dispensing of certain drugs, including chloroquine and hydroxychloroquine,” Hahn said. A group of medical product distributors including McKesson and Cardinal Health also received an assurance from the US Department of Justice on 4 April that it would not challenge collaborative efforts between companies to deliver PPE on anti-trust grounds.   

Supply Chain Challenges

During a press briefing on 2 April, Peter Navarro, an economic advisor to President Trump and director of the Office of Trade and Manufacturing Policy, said the US is “dangerously over-dependent on a global supply chain: for our medicines, like penicillin; our medical supplies, like masks; and our medical equipment, like ventilators.” As the pandemic spreads into new locales, manufacturers and distributors are worried that geopolitical skirmishes and trade restrictions could scramble complex supply chain operations. “The reality that a lot of our drug supply chain relies on one region of the world is definitely concerning,” said Michael Ganio, senior director, pharmacy practice and quality at the American Society of Health-System Pharmacists, on the Outspoken Oncologist webcast. “A lot of the raw materials and active pharmaceutical ingredients (API) are produced in China, and a lot of finished pharmaceuticals are made in India, so there were a lot of unknowns about what the COVID-19 impact might be,” said Ganio. “The good thing is that API and even precursor chemicals are relatively far upstream in the supply chain, so there’s time for us to find those alternatives and for the FDA drug shortage team to work with manufacturers to identify new sources before a shortage ever materializes.” 

“The good thing is that API and even precursor chemicals are relatively far upstream in the supply chain, so there’s time for us to find those alternatives and for the FDA drug shortage team to work with manufacturers to identify new sources before a shortage ever materializes.” - Michael Ganio 

Horvath at AmerisourceBergen also expressed concern about export restrictions announced in India – which were lifted on 7 April 7, after Horvath’s comments – but even in the context of ongoing restrictions, “we don’t anticipate an immediate impact to the supply chain,” said Horvath. “We feel confident that collaboration with manufacturers, in combination with the strength and diversity of the US supply chain and our broad global sourcing capabilities, will enable us to manage any supply obstacles that could arise in the future.”

That future is rapidly approaching. At least 12 countries had placed restrictions on exports as of 2 April, according to Global Trade Alert (see Exhibit 1). In the US, drugmakers and distributors were spooked by the specter of a potential executive order spearheaded by Navarro (who, incidentally, published a book in 2011 titled Death by China), which would require public purchasers to buy medical products made in the US, exclusively. In a 25 March letter signed by over 100 national and state trade organizations, including PhRMA, BIO, AdvaMed and the Healthcare Distribution Alliance, the industry groups expressed concern about “reports of a draft ‘Buy American’ executive order” that could exacerbate drug shortages. “The United States simply does not produce all of the raw materials or intermediate goods that are essential to drug development or production of the medical equipment needed to thwart this pandemic,” the letter said. As of 7 April, the “Buy American” executive order had not been released.

 

Exhibit 1
Global Trade Restrictions Related To COVID-19

Date

Country Implementing Restriction Products Affected

4 April

 

 

 

 

 

India

Export ban on hydroxychloroquine (increased restriction “without exception” following initial 24 March restrictions)

Sanitizers and ventilator exports also banned

2 April

Norway

Restricted export for multiple pharmaceutical products

1 April

Belgium

Restricted export for multiple products including hydroxychloroquine, pain medications and CNS products

31 March

United Kingdom

Parallel export ban on multiple products, including pain medications, insulin, cardiovascular products and other drugs

28 March

Argentina

Export license required for multiple products related to COVID-19

27 March

South Africa

Export permit required for multiple products including face masks, hand sanitizers, hydroxychloroquine and vaccines

24 March

Hungary

Export ban on hydroxychloroquine

20 March

Bulgaria

Export ban on quinine-based products

17 March

Indonesia

Export ban on masks, raw materials for masks, antiseptics, medical protective garments and ethyl alcohol

17 March

Czech Republic

Export ban on all medicines intended for the Czech market

16 March

Serbia

Export ban on all medicines intended for the Serbian market

Export of products developed exclusively for foreign markets are allowed

2 March

Russian Federation

Export ban on personal protective equipment

Source: Global Trade Alert

 

With or without the implementation of a new executive order, US manufacturers and distributors will likely continue to rely on global supply chains to bring drugs and devices to patients. Biopharmaceutical companies that wish to expedite imports across US borders may be eligible to join the Customs Trade Partnership Against Terrorism (CTPAT), a US Customs and Border Protection program. The public-private sector partnership program is voluntary and free to join, provided that companies can meet the organization’s minimum security criteria, and agree to work with US Customs to “protect the supply chain, identify security gaps, and implement specific security measures and best practices,” according to the CTPAT website. Benefits of becoming a CTPAT member include a reduced number of examinations, front of the line inspections, shorter wait times at the border, business resumption priority following a natural disaster or terrorist attack, and other perks. On the Rx-360 webcast, an employee at Sanofi asked Anthony Orosz whether CTPAT members, Sanofi included, would continue to receive membership benefits in the event of a US border closure. In response, Orosz said he did not anticipate a border shutdown, but that CTPAT member companies would be the first to know about any new developments. “You will have priority in the event something does happen,” he said.

COVID Impacts On Global Supplies

In Europe and beyond, export bans, price caps and supply chain diversions are being used by governments to shore up supplies and marshal support for COVID-19 patients within their own borders. Like Genentech’s Actemra (tociluzumab), AbbVie Inc.’s Kaletra (lopinavir + ritonavir), an HIV medication, is in short supply in some geographies, due to its clinical testing against COVID-19, and off-label usage by physicians for COVID-19 patients. To combat shortages, France’s regulatory agency, ANSM, announced emergency measures that allow the country to import from AbbVie versions of Kaletra intended for non-EU markets. The French agency also approved the emergency use of veterinary formulations of propofol, an anesthetic, for human patients. Stocks of propofol are diminished due to increased use of the drug as a sedative in intubated COVID-19 patients.

A number of EU members – and the UK – have announced export bans or parallel export bans, which prohibit the purchase and resale of products intended for an individual country or bloc. In Belgium, regulators placed an export ban on over forty medicines, prohibiting sales beyond the European Economic Area of products including chloroquine and hydroxychloroquine, AbbVie’s Kaletra, Genentech’s Actemra and Sanofi/Regeneron Pharmaceuticals Inc.’ Kavzara (sarilumab), all of which have entered clinical trials as potential treatments against COVID-19. In mid-March, the UK government added 82 products to parallel export ban list, including drugs to treat diabetes, bacterial infections, pain and other disorders, as well as hydroxychloroquine. The Russian government passed a law in late-March that authorizes the use of price caps for any medication or medical device for which the government detects price increases exceeding 30%. The law allows the government to set maximum retail prices for such products for up to 90 days. Commenting in a 4 April report, the European Federation of Pharmaceutical Industries and Associations (EFPIA) described the spread of trade restrictions as “not the way to go,” citing the example of a Royal Philips ventilator that requires 621 crucial components, sourced around the world.

As additional trade restrictions and emergency actions come online, manufacturers and distributors will need flexibility and contingency planning built into their supply chains. Collaboration and communication between manufacturers, drug distributors and public health systems – as well as increased transparency of inventories and ordering data – will be crucial in the coming weeks and months. In the lucky event that one of the many drugs currently in clinical trials proves effective against COVID-19, supply chains that move the quickest will save the most lives.

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