'Buy American' Policies May Pressure U.S. Drug Supply Chain

by Leslie Small

While the COVID-19 pandemic led to worrying spikes in demand for certain drugs back in March and April — spurring PBMs to swiftly establish dispensing limits — that particular storm appears to have passed. However, a push to reduce reliance on foreign-produced medicines could be the next cause for concern about the drug supply chain.

HHS on May 19 said it awarded a four-year, $354 million contract to "a team of private industry partners," led by Virginia-based startup company Phlow Corp., which will work toward expanding pharmaceutical manufacturing in the U.S. "for use in producing medicines needed during the COVID-19 response and future public health emergencies."

"That's going to be a big item, I believe," says Brian Anderson, a principal with Milliman, Inc. “I'm expecting at some point this year we will see supply chain management issues. It may not be [drugs that are tied to COVID-19 treatments] — it may be some other high-frequency generic product or something else that’s very commonly used, but then another country may use it as leverage to maintain their manufacturing position."

The U.S. is highly reliant on China and India for base ingredients used to produce drugs, and the "Buy American" philosophy is generally not workable for many pharmeceutical products, Rena Conti, Ph.D., associate research director of biopharma and public policy at Boston University, said during a May 15 webinar hosted by the Alliance for Health Policy.

Other pandemic-related drug supply issues that have affected PBMs have also been intertwined with politics. Prescriptions for hydroxychloroquine spiked in March when President Donald Trump touted the promise of using the malaria drug based on some initial research about its use on COVID-19 patients, as a new study from JAMA illustrates.

For PBMs that had already placed dispensing restrictions on hydroxychloroquine, the strategy now appears to be "stay the course."

Prime Therapeutics, LLC saw "over a 300% peak in use of hydroxychloroquine by mid/late March that has subsequently come back to baseline," says Chief Clinical Officer David Lassen, Pharm.D.

While there has been no uptick in hydroxychloroquine utilization following the president's recent comments about taking the medication, "we continue to recommend utilization management programs remain in place for this medication," Lassen adds.

From RADAR on Drug Benefits