Welcome to
Ensuring compliance
Reducing pharmacy costs
Your solution for DSCSA Compliance
The first and only end-to-end DSCSA compliance solution
that provides visibility and transparency throughout the
entire drug supply chain.
Presents
Avoiding Drug Shortage
Price Increase
Presented by
Dwight deVera
CEO & President
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“We are constantly attempting to only have
two weeks of supply in the main pharmacy at
any given time.”
“We normally find out about a shortage
when we go to try and order the product
from our Distributor.”
Unnamed Director of Pharmacy
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Agenda
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Introductions
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Impact of Drug Shortage on Healthcare
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How we got here and Unintended Consequences
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Early Warning System
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• The first and only end-to-end DSCSA compliance
solution that provides visibility and transparency
throughout the entire supply chain.
• Designed to meet all the mandates of the DSCSA
that require compliance and also to create insight
to manage supply chain costs.
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The Contract Solution for Numerous GPOs
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The Impact
of
Drug Shortages
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Drug Shortage Visibility?
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Where We Are
Cost of Shortages
to healthcare=
$230 Million
Additional labor to
manage the
shortage= $216
Million
2014
Number of Drug
Shortages= 265
74% Increase
over 5 years
2015
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A Well-Defined Problem
• With the convenience
of injectables comes
risk.
• “A high percentage of
shortages are sterile
injectables.”
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The EpiPen Saga
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How We Got Here
and the
Unintended Consequences
of
Drug Shortages
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The Case of Glucagon
• Until recently, glucagon
wasn’t available for treating
people with diabetic
hypoglycemia.
Dextrose-50
D-50 Injector $15.49
D-50 Vial
$8.00
Glucagon
Glucagon Emergency kit $390 to $490
Glucagon (generic) kit $282.00
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Supply Side Consequences
A manufacturing issue
(possibly caused by a
regulatory issue).
A shortage of an active
ingredient or raw
material shortage.
Producing the
drug is no longer
a profitable
situation for the
manufacturer.
(or a manufacturing
issue that caused the
shortage of a raw
material).
All have one result.
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When a solution starts the problem.
The gross margin for a brand name drug that has
exclusivity starts at 97%.
When one generic competitor enters the market, the
price of the drug drops to 50%.
Patent Cliff
When the fourth generic product enters, the price
drops to 20%.
Then it’s a race to the bottom.
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It Gets Worse
Inventory Bloat
Pharmacies have it, drug
manufacturers don’t.
Supply Shock
Demand for every medication
is precision predicted which
means as soon as the
demand increases, there’s a
shock to the system.
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Because the industry
behaves like this, there’s
hoarding.
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To hoard or not to hoard?
Atropine Sulfate
Tamiflu
Reduces the length of time you
are ill by about one day
Used to treat cardiac arrest and is
critical to modern day healthcare.
There is no alternative.
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We’ll never solve the problem of
drug shortages but
we can protect against it.
Your Early Warning System
Shortage
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How do you know a drug is short?
Products used to prevent or treat a
serious or life-threatening disease or
medical condition for which there is
no other available source with
sufficient supply of that product or
alternative drug available.
A supply issue that affects how the
pharmacy prepares or dispenses a
drug product or influences patient
care when prescribers must use an
alternative agent.
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Shortage Trends
• We will utilize historic data and
proprietary algorithms to
determine a product’s
propensity for shortage
• Shortage propensity will affect
our confidence in determining if
a product will be short
• Active ingredient shortages will
feed into our algorithm to
determine the network impact
SHORTAGE CATEGORIES
Central nervous system drugs
Antibiotics
Intravenous saline, nutrients
Chemotherapy
Cardiovascular drugs
14%
27%
18%
19%
22%
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Shortage
SHORTAGE
Therapeutic
Equivalents
An internal database of all drug products
regulated by the FDA updated monthly from the
NIH RXNorm database and
FDA Orange Book/Purple Book repositories.
Therapeutic
Class
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Cost Avoidance ROI
An increased return
on investment can
be realized in a
number of ways:
Increasing revenue
Decreasing variable
expenses
Decreasing capital
expenses
Avoiding costs
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The Story of Zofran
(Ondansetron)
Generic: $7
per dose
Brand: $36
per dose
Average
monthly
utilization =
4,500 doses
Missed
opportunity
= $130,500
Missed Opportunity
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Shortage
Available Alternatives
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Value of Early Warning
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App Notification Badges
• App badge indicators will alert
application users of immediate
concerns
• Badge indicators are managed by
acknowledgement processes
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Shortage: Alert Acknowledgement
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Drug Shortages
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Shorted Drug NDCs & Equivalents
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Therapeutic Class Equivalents NDCs
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A Data Transparency and Analytical Apps Company
Ensuring compliance
Reducing pharmacy costs
Q&A
[email protected]
646.783.3172