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USP Global Public Policy Position

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Identifying and addressing vulnerabilities in the upstream medicines supply chain to build resilience and reduce drug shortages

Identifying and addressing vulnerabilities in the upstream medicines supply chain to build resilience and reduce drug shortages

Issue

Identifying and addressing vulnerabilities in the upstream pharmaceutical supply chain are essential to mitigating and preventing drug shortages and to ensuring patients have access to the critical and routine medical care they need.

Supply chain vulnerabilities manifest as shortages when supply is unable to meet demand due to demand spikes, supply disruptions, or both. Currently, there is little insight available into the upstream supply chain for medicines, which refers to the drug manufacturing process where raw chemicals, key starting materials (KSMs), active pharmaceutical ingredients (APIs), and finished dosage forms (FDFs) are produced, refined, packaged, tested, and labeled. Addressing upstream supply chain vulnerabilities will build resilience that is essential for mitigating drug shortages, along with additional measures that are necessary for strengthening downstream supply chain reliability.

A wide range of governmental and nongovernmental efforts aim to bolster supply chain resilience and mitigate or prevent drug shortages, however neither a single government agency nor any industry entity has a comprehensive view of the medicines supply chain. Companies and the U.S. Government need a better understanding and mapping of their full supply chains to identify potential vulnerabilities. Additional clarity is needed to identify the root causes of many drug shortages and to effectively deploy resources to improve medicines supply chain resiliency and reduce drug shortages in the United States.

Position

USP urges policymakers, regulators, and industry to take further action to identify and respond to risks and vulnerabilities in the upstream pharmaceutical supply chain and reduce medicine supply disruptions. These actions should include risk mitigation strategies, public and private investment, and policy reforms and should be informed by the risks driving drug shortages and a thorough mapping of the U.S medicines supply chain.

  1. Building early warning capabilities
  2. Establishing a vulnerable medicines list
  3. Coordinating supply chain resilience and reliability efforts
  4. Strengthening the manufacturing base for drug products
  5. Promoting sustainable prices for generic medicines
early warning capabilities

Building early warning capabilities

USP calls for the establishment and funding of an Early Warning System and Research Coordinating Center to conduct ongoing surveillance of the pharmaceutical supply chain, provide alerts, and conduct research to fill the gaps in the mapping of the U.S. pharmaceutical supply chain. Such early warning capabilities would enable the U.S. Government and private sector pharmaceutical supply chain stakeholders to adopt a more proactive and informed approach to preventing shortages and mitigating the impact of those that do occur.

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vulnerable medicines list

Establishing a vulnerable medicines list

USP recommends the establishment of a vulnerable medicines list in the United States. This list could either complement or be a component of an essential medicines list, specifically addressing supply chain vulnerabilities. Such supply chain vulnerabilities should include sole or limited number of suppliers, geographic concentration of manufacturers and API, excipient, and KSM suppliers, political and geopolitical risks, climate change susceptibilities, manufacturing complexity, price, and other factors. Creation and utilization of vulnerable medicines lists will help prioritize medicines and properly target policy interventions and finite resources to improve medicines supply chain resiliency and preserve patient access to necessary medicines.

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Coordinating supply chain resilience and reliability efforts

Coordinating supply chain resilience and reliability efforts

USP recommends efforts to coordinate medicines supply chain resilience and reliability activities among federal agencies and non-governmental stakeholders. Coordination efforts should include the organization of multi-disciplinary efforts, defining measurable outcome metrics for implementation efforts, and strategic planning activities to maximize the utility of new programs and increase the impact of existing initiatives. Additionally, necessary authorities and sufficient funding should be allocated to lead these cross-cutting efforts to improve drug supply chain resilience and reliability.

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manufacturing base for drug products

Strengthening the manufacturing base for drug products

USP supports reforms to foster more security in the manufacturing base for U.S. drug products to reduce the risk of disruptions and shortages. Among other opportunities, this could include economic or other incentive measures that will encourage multiple suppliers for key drugs, geographic diversification of manufacturing facilities, and manufacturing location and component supply redundancies. It could also include financial incentives and the development of tools and standards to help reduce the technical barriers to wider adoption of advanced manufacturing technologies.

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prices for generic medicines

Promoting sustainable prices for generic medicines

USP understands the necessity for a fundamental shift in the market for lower-priced drugs to guarantee more certainty and predictability of both demand and supply and to increasingly value a drug’s supply chain resiliency in addition to its price. We support initiatives to measure and rate manufacturer supply chain resiliency, sustainability, and reliability.

USP also encourages policymakers and public and private drug purchasers to explore the establishment and utilization of payment and purchasing models that value and incentivize supply chain resilience and reliability and the authorization and use of longer-term guaranteed-volume contracts, in which prices are assured for a defined, guaranteed volume.

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