By Todd Ebert
Key trends to watch
The year 2018 presented the healthcare sector and supply chain a year of challenges and opportunities for transformation. Natural disasters, other emergencies and critical shortages of prescription drugs, including injectable opioids, jeopardized the wellbeing of patients across the country. Policymakers also pursued solutions to the issue of rising drug prices, including the administration’s release of the HHS “Blueprint to Lower Drug Prices and Reduce Out-of-Pocket Costs.”
The Healthcare Supply Chain Association (HSCA) represents leading healthcare group purchasing organizations (GPOs), the sourcing and purchasing partners to virtually all of America’s 7,000+ hospitals, as well as the vast majority of the 68,000+ long-term-care facilities, surgery centers, clinics, and other healthcare providers. Given our unique line of sight over the entire healthcare supply chain and our experience working on the front lines of the healthcare industry, HSCA has an intimate understanding of the challenges the healthcare industry will continue to face in 2019.
Here are a few of the trends we are seeing, as well as areas of focus and policy priorities that HSCA will continue to pursue in the coming year, building on the progress HSCA made in 2018.
Drug pricing and generic drug competition
Significant price spikes for critical generic drugs and ongoing prescription drug shortages continue to jeopardize patient access to care. Patients have long relied on generic drugs to reduce costs and increase access to essential medications, and price spikes for commonly used drugs create hardship for patients and providers alike. In 2018, HSCA submitted comments on the HHS “Blueprint to Lower Drug Prices and Reduce Out-of-Pocket Costs.” HSCA applauded the Senate Judiciary Committee for advancing the CREATES Act, important legislation that would reduce prescription drug prices for patients by encouraging competition and innovation in the marketplace and end anti-competitive abuses utilized by some brand-name manufacturers. HSCA also submitted comments to FDA encouraging the swift uptake of biosimilars that prioritizes patient safety. In 2019, HSCA will continue to work with policymakers and supply chain stakeholders to increase competition in the generic drug market and find solutions to generic drug price spikes.
Despite some progress and a decline in the number of new shortages, critical drug shortages continue to jeopardize patient access to medications. These shortages have been exacerbated by several natural disasters and some manufacturing delays that have occurred over the past year. GPOs are important partners in helping hospitals and providers navigate these drug shortages to provide patient care. In 2018, HSCA called on the DEA to temporarily adjust production quotas to allow the other manufacturers to step in. The DEA subsequently did lift the production quotas for certain manufacturers, an important step for mitigating potential shortages. HSCA also submitted comments to FDA on the causes of critical prescription drug shortages and potential solutions. HSCA also convened a multi-stakeholder effort comprising leading healthcare provider organizations to develop recommended policy proposals to help prevent and address drug shortages. This Drug Shortage Working Group presented initial policy recommendations at the FDA’s public hearing on drug shortages in November of last year.
Advances in technology have led to unprecedented developments in the healthcare sphere; medical device and service technology are improving patient care and creating efficiencies in the healthcare system. However, medical devices and services, like any computer system, are vulnerable to cybersecurity threats that could jeopardize patient health, safety and privacy. With the recent wave of cyberattacks in various industries, cybersecurity will continue to be a focus and priority in the years ahead. In 2018, HSCA released key cybersecurity considerations for healthcare providers, medical device manufacturers and service providers to help protect patient health, safety and privacy. In conjunction with the release of the key considerations, HSCA also published ‘Recommendations for Medical Device Cybersecurity Terms and Conditions,’ which details potential purchasing contract terms and conditions that could help ensure rapid adoption of rigorous cybersecurity measures.
In 2018, the country experienced a wave of natural disasters and other emergencies that put stress on hospitals and healthcare providers as they served affected communities. GPOs were on the front lines of those emergencies, providing support to healthcare providers and working with manufacturers to identify and locate supplies of much-needed resources. HSCA member GPOs took steps ranging from increasing communication with members and suppliers, to identifying product availability and potential shortages, to collaborating with government agencies at the federal, state, and municipal levels. To help address the broader public threat of emergencies such as Ebola, GPOs are creating centralized response systems, conducting full-scale exercises of emergency management programs, and serving as clearinghouses of product information, educational programs, and treatment protocols.
As we head into 2019, HSCA and its members remain committed to helping hospitals and healthcare providers deliver the most effective and affordable care possible to the patients they serve.
Todd Ebert, R.Ph., is president and CEO of the Healthcare Supply Chain Association.