This is an excerpt from Medically Necessary, a health care supply chain newsletter. Subscribe here.
The news: The Food and Drug Administration used tools like regulatory flexibility and expedited applications to avoid nearly 200 drug shortages in 2020, according to a new report.
The agency hasn’t prevented that many shortages since 2012, when the problem was more severe.
In the midst of a pandemic that dramatically increased demand for some drugs, the FDA took far more actions to avoid shortages compared to previous years.
The numbers: There were relatively few new shortages of drugs in 2020, but the number of ongoing shortages reached its highest levels since 2013.
There were 43 new shortages of drugs in 2020. That’s fewer than in the two previous years and down from a high of 250 in 2011. However, there were 86 ongoing shortages at the end of 2020, up from a low of about 40 in 2017.
FDA’s annual drug shortage report blamed the increasing number of ongoing shortages on the closure of manufacturing facilities for remediation purposes and increased demand for some drugs because of the COVID-19 pandemic.
The response: The situation could have been much worse though. FDA officials took a significantly higher number of actions to prevent drug shortages, compared to previous years.
FDA expedited the review of 489 applications to produce drugs last year, nearly double the number from 2019. The agency also exercised regulatory flexibility 110 times, compared to 57 times in 2019.
Walmart will sell private brand analog insulin
The news: Walmart plans to sell a private label version of analog insulin. The price for uninsured patients would be significantly lower than normal, but some critics say it’s not a big step forward. Drugmaker Novo Nordisk will manufacture the product.
A vial of analog insulin will cost about $73. Walmart claims that’s up to 75% lower than the price of branded analog insulin products.
The numbers: According to the American Diabetes Association, Americans with diabetes spend more than $9,600 per year on medical treatment for the disease.
A vial of Novo Nordisk’s brand name analog insulin has a retail price of more than $300 on GoodRx. With a coupon, a vial can cost as low as $100. In 2016, the company estimated that insurers typically pay slightly less than $150 per vial.
Some research suggests that the cost of production for insulin is substantially lower than any of those prices, Axios reports.
The response: The new product will be much cheaper than drugs that are currently available, but LA Times business columnist Davd Lazarus, who has Type 1 diabetes, said the move simply highlights the problems with the supply chain for insulin.
“Walmart’s version of the lifesaving drug is largely identical to insulins sold by the others,” he wrote in a column on Wednesday. “If Walmart can profitably sell insulin at a fraction of current prices, why hasn’t anyone else done so before now?”
Others dished out similar criticisms, questioning why manufacturers were charging so much for a product that doesn’t cost much to produce.
“While any option that may save someone from going into further debt to get their essential medicines is a step in the right direction, it is not addressing the root of the problem,” Elizabeth Rae, founder of the diabetes advocacy organization T1International, told STAT.
The effect: A Bloomberg headline describes Walmart’s move as a way to “counter Amazon’s drug push.”
Amazon acquired the telepharmacy company PillPack in 2018 and introduced Amazon Pharmacy in 2020.
Lazarus wrote that he’s hopeful that Walmart’s push to lower the price of insulin will encourage other drugmakers to do the same.
Eli Lilly CEO David Ricks, whose company also produces insulin, told CNBC that he welcomes the competition and hopes it leads to lower prices for patients.
“That’s great news for patients,” he said. “We welcome all solutions that could lower out-of-pocket costs. … Any efforts to smash through that and deliver better value to patients I’m for.”