Prescription Drug Supply Chains: An Overview of Stakeholders and Relationships (Oct 14, 2021)
Andrew W. Mulcahy and Vishnupriya Kareddy (Payment, Cost, and Coverage Program, RAND Health Care, RAND Corporation)
Prepared for the Office of the Assistant Secretary for Planning and Evaluation (ASPE), HHS
Many stakeholders and steps are involved in the life cycle of a prescription drug as it moves from chemical synthesis and formulation through dispensing or administration to patients. The specific steps involved in prescription drug supply chains often differ depending on the type of drug, the channel of distribution, and the patient’s source of prescription drug coverage. This report describes the stakeholders involved in prescription drug supply chains and the flows of products, payments, and information between stakeholders. Although this report presents a typical supply chain for retail pharmacy drugs, it also highlights the important supply chain distinctions for specific distribution channels and for specific types of drugs. This report is intended to be a reference for those interested in the prescription drug industry and pharmaceutical policy and economics.
A key conclusion (p. 29):
The ability of policymakers to identify, assess, and respond to shortages and other disruptions in supply chains, regardless of the cause, is hampered by incomplete data. FDA does maintain databases listing the facilities and companies registered to manufacture and import APIs and finished drug products. FDA does not, however, have the regulatory authority to collect data on the volume of drugs or their constituent ingredients manufactured at different sites or on the flow of products between stakeholders. At present, policymakers’ ability to identify disruptions in drug supply chains is largely through self-report by industry stakeholders and from third-party crowdsourcing data collection efforts, such as the American Society of Health-System Pharmacists’ Drug Shortages Database (American Society of Health-System Pharmacists, undated). Although mandating drug manufacturers to report additional data would impose additional burden, richer data would allow for a more accurate assessment of drug supply chains and analysis of potential and actual disruptions.