If there’s one economic theory that’s familiar to those of us who aren’t economists, it’s the law of supply and demand, which holds that the price of a product or service is determined by 1) its availability and 2) the desire or willingness to consume that product or service.
When the demand for a product exceeds its availability, shortages can occur. With most types of products, learning that what you want to buy is out of stock or backordered may be annoying, but not alarming, especially when alternatives exist at a similar price. If the store is out of Diet Coke, you could try Coke Zero, Diet Pepsi, the house-brand diet cola – or just go without. No big deal
When it comes to shortages in the prescription drug market, however, consumers are anything but relaxed.
Although the Food and Drug Administration (FDA) is responsible for monitoring the prescription drug supply chain, prescription drug shortages do occur, fueled by supply issues -- manufacturing or quality problems, delays, and discontinuations – or by a sudden increase in demand. Typically, this results in price increases not just for the prescription drug that is in short supply but also for the alternative brand or generic drugs that patients turn to. While the impact may be hardest on those with low income, drug shortages affect people in all socioeconomic levels, and can have severe consequences for the U.S. health system and public health.
On the individual level, not being able to find or afford a necessary drug for yourself or a family member – or having to jump through hoops to do so – is hugely stressful and a major distraction from normal activities, like work. What’s concerning is that drug shortages are becoming increasingly common. According to US News and World Report, there were 295 drug shortages in the US in 2022, a 30% increase over 2021. So far this year, there have already been 130. While there are likely multiple factors contributing to this increase, the coronavirus pandemic has had a profound impact on the way we use and access drugs. For example, restrictions on prescribing certain drugs via telehealth were relaxed during the public health emergency and have not been reinstated Biden admin extends telehealth prescribing rules until November (msn.com). The pandemic also exposed the dangers of a lack of domestic manufacturing facilities in the US; the scarcity of COVID-19 antivirals like Paxlovid, driven by lack of supply rather than overwhelming demand, is a case in point.
The US is currently experiencing a shortage of Adderall and its associated generic versions, used to treat Attention Deficit Hyperactive Disorder (ADHD). These medications experienced a 16% utilization increase post-pandemic and use continues to soar. The media buzz has reinforced the risk to mental health and productivity that drug shortages can entail. Also in short supply are GLP-1 drugs such as Ozempic and Wegovy, which were originally approved by the FDA for the treatment of diabetes. The off-label use of these drugs to achieve dramatic weight loss has been widely publicized through social media channels such as TikTok, and the spike in demand has made access more difficult for patients with diabetes.
What can you do?
Employer health plan sponsors should be concerned. According to the Health Policy Institute, two-thirds (66%) of U.S. adults use prescription drugs and in some cases these medications are lifesaving or life-altering treatments. We can’t ignore the growing drug shortage epidemic and the impact it is already having on the health and productivity of your workforce.
When a drug shortage is directly impacting members, contact your PBM account team as a first step to ensuring risk to your members is being managed and minimized. Patient education is also important. Encourage members who may be affected by drug shortages to speak to their prescriber or provider about alternate treatment options. In many instances, an appropriate solution is usually able to be substituted until the drug previously in a shortage is marked resolved by the FDA.