Unveiling the Impact of Drug Shortages and Price Increases in the Pharmacy Industry
The pharmaceutical industry is facing a number of obstacles as we approach 2024, all of which need a deliberate and sophisticated strategy: The Direct and Indirect Remuneration (DIR) “Hangover”, Drug Shortages, Drug Prices, Staffing Shortages and the DSCSA delay. Please mark your calendars for our forthcoming webinar encore on January 10th, 2024 at 12 PM ET and join us as we explore these trends in-depth. To help kickstart the webinar, we’ll carefully examine the intricacies of medication shortages and price hikes in this blog, revealing a comprehensive plan to not only lessen their effects, but also set pharmacies up for success in a constantly changing market.
The Escalating Crisis of Drug Shortages
To comprehend the gravity of the situation, let’s delve into the statistics. The American Society of Health-System Pharmacists (ASHP) sounded the alarm with a staggering report of 301 active drug shortages in the first quarter of 2023, a figure unseen since 2014. This crisis extends beyond mere numbers, it disrupts the continuity of patient care, placing a substantial operational burden on pharmacies of all sizes and scopes. The ripple effect of a shortage in one critical medication can cascade into challenges in patient outcomes, financial strain and operational stress.
The root causes of these shortages are multifaceted, ranging from manufacturing issues and regulatory challenges to supply chain disruptions. As we navigate 2024, pharmacies must not only grapple with the immediate impact of these shortages, but also develop proactive strategies to fortify their supply chains against future uncertainties.
Navigating the Complexities of Drug Price Increases
While the Inflation Reduction Act promises savings for Medicare beneficiaries, the landscape isn’t without its challenges. The introduction of new drugs to the market with higher price tags, coupled with disruptions in pricing structures, necessitates a strategic approach from pharmacies. Successfully maintaining financial viability without compromising patient care requires a nuanced understanding of the evolving market dynamics.
The pricing landscape is intricately connected to various factors, including legislative changes, manufacturer decisions and market competition. The consequences of these changes are far-reaching, affecting not only the financial health of pharmacies, but also influencing the choices available to patients. As we explore strategies to navigate price increases, it’s essential to consider the broader implications on accessibility, affordability and the overall sustainability of the pharmacy ecosystem.
To effectively address the multifaceted challenges of drug shortages and price increases, pharmacies must adopt a strategic and unified approach. This approach goes beyond mere reactionary measures, it involves proactive strategies that empower pharmacies to not only weather the storms of 2024, but also emerge stronger and more resilient. Let’s delve into an exploration of a key strategy.
Unify Purchasing for Resilience
Purchasing requires a proactive and comprehensive approach in order to navigate the complexities of drug shortages and price rises. Pharmacy needs can customize this framework to meet their specific demands and circumstances. It’s not a one-size-fits-all approach. The plan, which aims to give pharmacies more leverage in the face of uncertainty, is broken down in full below:
Centralize Vendor Catalogs for Streamlined Access
In a world inundated with information, the first step in the unified purchasing strategy involves consolidating vendor catalogs into a single, accessible solution. This centralization goes beyond convenience, it’s about empowering pharmacies with the ability to make well-informed decisions efficiently. Quick access to comprehensive information enhances operational efficiency, allowing pharmacies to adapt swiftly to market dynamics. This isn’t just about having data, it’s about transforming data into actionable insights.
The benefits of centralized vendor catalogs extend to improved negotiation capabilities, enhanced visibility into pricing structures and a more profound understanding of product availability. With the ability to see the complete landscape of offerings, pharmacies can negotiate better terms, explore alternative options and strategically position themselves in a competitive market.
Furthermore, this centralization facilitates a proactive approach to addressing potential shortages. By having a comprehensive view of available products and potential disruptions in the supply chain pharmacies can develop contingency plans and establish alternative sourcing strategies. The power of centralization lies not just in its convenience, but in its ability to transform the procurement process into a strategic advantage.
Expand your Options for Flexibility
The strategy extends beyond centralization to encompass the diversification of purchasing options. It’s not just about choosing different vendors; it’s about exploring diverse packaging options as well. Diversification in packaging options allows pharmacies to adapt to changes in patient preferences, respond to specific medical requirements and enhance the overall patient experience. The key isn’t only to have alternatives, but to strategically leverage them based on real-time data and market dynamics. This all-around approach broadens the scope and flexibility of pharmacies, ensuring they’re well-equipped to meet the varied needs of their patients.
Anticipate Availability for Informed Decision-Making
In a landscape where timing is crucial, advanced knowledge of item availability and quantities offered by vendors is a proactive step. Pharmacies must move beyond reactive measures and anticipate potential shortages, planning their procurement strategies with foresight. This level of preparedness is instrumental in ensuring uninterrupted patient care.
Anticipation relies on a combination of predictive analytics, market intelligence and collaborative partnerships with vendors. Pharmacies that can forecast potential shortages before they occur gain a significant advantage in navigating the complexities of the supply chain. This involves not only monitoring current inventory levels, but also understanding the broader market dynamics that influence product availability.
Collaborative relationships with vendors become crucial in this aspect. Pharmacies that can engage in open communication with suppliers, sharing insight into their inventory needs and receiving early notifications about potential shortages, are better positioned to proactively address challenges. This collaborative approach transforms the vendor-pharmacy relationship into a strategic one, where both parties work together.
Additionally, anticipation involves staying ahead of regulatory changes, geopolitical influences and global events that can impact the availability of pharmaceutical products. The ability to anticipate challenges and opportunities requires a combination of technological tools, industry expertise and a proactive mindset.
Efficient Comparison of Prices
With a myriad of options available, the ability to quickly and accurately compare unit prices becomes a critical aspect of the strategy. It's not just about making decisions, it’s about making financially sound decisions while maintaining the quality of patient care. The strategy empowers pharmacies to navigate the complex pricing landscape, ensuring that every purchasing decision aligns with their financial goals.
Unit price comparison encompasses cost control, revenue optimization and budget management. Pharmacies that can efficiently compare each vendor’s unit prices gain a competitive edge in optimizing their financial resources. This involves leveraging technology to automate the comparison process, ensuring accuracy and speed in decision-making. Additionally, it requires a deep understanding of the factors that influence pricing, including manufacturer incentives, bulk purchase discounts and market demand fluctuations.
The strategy goes beyond simple cost-cutting measures, it’s about maximizing the value derived from every purchasing decision. This involves an approach to evaluating not just the immediate cost, but the long-term impact on patient outcomes, operational efficiency and overall financial health.
Register For Our 2024 Pharmacy Trends Webinar
This extensive exploration serves as an introduction to the complexities of 2024. However, the journey doesn’t end here. To gain a comprehensive understanding and explore the additional trends and strategies, we invite you to participate in the upcoming webinar.
The webinar promises an in-depth analysis of the DIR “hangover”, shedding light on the impending fees that will impact pharmacy profit margins. We’ll delve into staffing shortages, focusing on the critical role of pharmacy technicians and the financial implications of turnover in various roles. Additionally, we’ll unravel the intricacies of the delayed DSCSA implementation, understanding the reasons behind the delay and the implications for pharmacies.
The webinar doesn't stop at mere analysis, we’ll provide actionable strategies and insights to empower pharmacies in tackling these challenges head-on. Our expert speakers, Scot Rewerts, Director of Procurement & Strategic Partnerships at Thrifty White Pharmacy, and Calvin Hunsicker, Found and Chief Product Officer at SureCost, will share their experiences and practical tips to guide pharmacies through the challenges of 2024. Your proactive approach today will define the success of your pharmacy tomorrow.
