7.4: Policies Affecting Drug Approval, Supply, and Cost
By the end of this section, you should be able to:
- Examine the role of the FDA in protecting public health.
- Understand the global drug manufacturing supply chain.
- Examine factors contributing to U.S. pharmaceutical costs being higher than those of other countries and their implications.
As discussed, the FDA is a regulatory body under the HHS umbrella. The FDA has broad regulatory authority and is responsible for protecting public health by ensuring the safety and efficacy of the food supply and all medical drugs, products, and devices (FDA, 2023). Table 7.8 lists examples of products over which the FDA has authority in eight regulatory areas.
| Regulatory Areas | Products over Which the FDA Has Authority |
|---|---|
| Foods |
|
| Drugs |
|
| Biologics |
|
| Medical devices |
|
| Electronic radiation products |
|
| Cosmetics |
|
| Veterinary products |
|
| Tobacco products |
|
As a regulatory body, the FDA has specific policies and regulations aimed at protecting the health and well-being of the American public. The agency develops rules and regulations based on evidence-based processes and through the input of other government agencies and subject matter experts. The FDA regulations are then published in the Federal Register , the U.S. government’s official publication for notifying the public of agency actions. FDA regulations are either required or authorized by statute.
The rules established by the FDA may come through the creation of laws by Congress, presidential executive orders, or regulations established within the FDA. Before a new drug is approved for public consumption, for example, the drug is subject to a stringent testing and research process to identify potential harm to the affected population. Once the food, drug, or other item is approved, it is then made available for public consumption.
One of the most recent FDA actions was the approval of the COVID-19 vaccine (FDA, n.d.). Although the process of approving a drug or other material for human and animal consumption generally takes years, the approval of the COVID-19 vaccine was expedited due to the nature of the COVID-19 pandemic and the need to limit new cases of the disease (FDA, n.d.). The FDA and drug makers worked at an accelerated pace to complete the required testing on the new vaccines before they were released to the public to ensure their safety and efficacy (Figure 7.5).
This video provides a brief overview of the process the FDA follows to approve new drugs.
Watch this video, and then respond to the following questions.
- What considerations are involved in the decision to test a new drug on human subjects?
- What are the three phases of clinical trials?
The Global Drug Manufacturing Supply Chain
One factor affecting the supply and cost of pharmaceutical drugs is the global drug manufacturing supply chain. A supply chain consists of the participants at each step in the process that takes a product from raw materials to finished goods sold to customers. As it relates to global drug manufacturing, the supply chain refers to the movement of the various components and materials essential to providing a drug for human consumption.
The pharmaceutical supply chain is a global, complex system. The key role players include raw material suppliers, drug manufacturers, regulatory agencies, wholesale distributors, pharmacies, pharmacy benefit managers (PBMs), health care providers, and clients (Kaylor, 2023). First, raw materials are sourced and transported for manufacturing. Pharmaceutical manufacturing in the United States has declined significantly, and up to 90 percent of needed raw materials are estimated to come from other countries (Constantino, 2021). Next, the drugs are transferred to wholesale distributors, who provide them to the pharmacies. Pharmacy benefit management companies are the intermediaries working with insurers, employers, and government programs to negotiate the prices the clients will pay for the prescriptions (Kaylor, 2023).
The supply chain’s quality and safety are essential to the United States’ national security and public health (Costantino, 2021). Standards related to the global drug manufacturing supply chain assist governments and drug manufacturers in increasing the availability of safe, quality medicines that are necessary to build client and health provider trust (U.S. Pharmacopeial Convention [USPC], 2023). Examples of standards include the processes employed by organizations, such as the FDA, before medications, foods, and other materials are deemed safe for human and animal consumption. These guidelines are necessary to promote a strong and resilient supply chain so that people have the drugs they need at the time they need them. It is imperative that such regulations are backed by science, producing high-quality development and manufacturing processes and high-quality drugs for human consumption (USPC, 2023).
The pharmaceutical supply chain faces several challenges, including supply chain visibility and rising prescription drug costs (Kaylor, 2023). These challenges became evident during the COVID-19 pandemic by negatively affecting the pharmaceutical supply chain in several ways (Choe et al., 2020):
- They prompted unexpected increases in demand for critical medications needed to treat clients with COVID-19.
- They disrupted critical medication production as supplies of these medications were rapidly depleted while manufacturers were unable to keep up with the demand.
- They delayed regulatory oversight of production as travel restrictions curtailed FDA officials’ ability to inspect manufacturing facilities.
- They interrupted global trade of medications as many countries limited their pharmaceutical exports to meet the increased demand in their own countries.
- They revealed a limited understanding of local and demand-driven shortages that are not always reflected in the current FDA database of drug shortages.
- They highlighted inadequacies in supply chain planning and management. The United States has limited ability to coordinate and share medications and instead must rely upon pharmaceutical wholesalers.
The recently established Supply Chain Disruption Task Force is working to address the supply chain issues by developing a series of recommendations for supply chain diversification (Edwards, 2021). In the interim, the United States is working to overhaul its strategic national stockpile program. The stockpile program was established to disperse medications around the country in the event of a short-term disaster or biological attack (Edwards, 2021). The United States is redesigning the program to incorporate a strategic stockpile of drug ingredients so that domestic manufacturers can quickly produce needed medications in the event of an emergency.
Pharmaceutical Costs
Americans spend more on prescription medications than citizens of other countries. A recent study determined that U.S. prescription drug prices were 2.56 times those in 32 comparable countries (Bosworth et al., 2022). Accordingly, pharmaceuticals are one of the fastest-growing components of health care spending in the United States (Ellis, 2019). In July 2022, the average price increase per drug was almost $250, an increase of 7.8 percent (Bosworth et al., 2022). That same year, the list prices of several drugs increased by more than $20,000 or 500 percent (Bosworth et al., 2022). Rising prescription drug costs are an issue for many Americans.
There are several reasons for the high drug costs (Rajkumar, 2020):
- Monopolies: Newer drugs do not yet have any alternatives or competition in the form of generic medications or comparable versions from other companies. Also, some established drugs are manufactured by a limited number of companies, decreasing competition.
- Disease severity: Clients with serious illnesses are usually willing to pay any price for a drug that can save or prolong their life.
- Research and development: Developing a new drug is a lengthy, costly process. It takes approximately 12 years and $3 billion dollars for a new drug to get approved; only 10 to 20 percent of drugs developed and tested make it to the market.
- Political power of the pharmaceutical industry: Although the federal government is aware of the need to address high drug prices, the pharmaceutical industry is an influential lobbyist that frequently limits the government’s attempts to enact change.
The increase in drug costs disproportionately impacts underrepresented and marginalized populations. As drug costs continue to rise, access to drugs will become even more problematic for these populations. Drug adherence may decline as individuals and families make difficult choices related to priorities such as choosing to pay for housing and food or for pharmaceuticals to treat disease (Ellis, 2019). This leads to continued health disparities.
State and national policymakers are exploring options to better control and lower drug costs. In 2022, Congress passed the Inflation Reduction Act to address high and rising drug prices (Bosworth et al., 2022). The law requires drug manufacturers to pay rebates to Medicare if the drug prices for Medicare beneficiaries exceed inflation.
Community health nurses must recognize the impact of high drug prices on their clients. When assessing a client’s medication history, nurses should determine if the client is adhering to the prescribed regime. If not, nurses should examine the client holistically to determine the cause. Clients may not take their medications as prescribed if they cannot afford them. Nurses should work with clients to identify programs that can help them pay for prescriptions. Alternatively, nurses could work with the prescribers to identify less costly alternatives for the client.
Read the scenario, and then respond to the questions that follow.
A client with a diagnosis of diabetes, hypertension, and congestive heart failure visits her local primary care physician for a six-week follow-up appointment after being discharged from the hospital with an exacerbation of her congestive heart failure. The client presents with shortness of breath, and her blood pressure is 190/100. The client did not bring her medications to her doctor’s visit as her discharge nurse instructed. She reports that she has been taking her medications as scheduled. The client is currently unemployed and has applied for Medicaid benefits.
- How should the nurse approach obtaining a more detailed medication history from the client?
- If the client indicates she is not taking her medications because she cannot afford them, what next step(s) should the nurse take?