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HDMA CEO Perspective, March 27, 2014: HDMA and the Supply Chain Working to Address Cross-Cutting Challenges

March 27, 2014

As distributors, we have a unique position at the center of the pharmaceutical supply chain — the "connector" or "convener" of our supply chain trading partners, so to speak. This role has never been more important than it is today, as we start to implement the traceability legislation, identify a better way to combat the prescription drug abuse epidemic, and begin to explore the new boundaries of the global supply chain. With these issues in front of us, this year is shaping up to be a year of hard work, collaboration and new opportunities for HDMA and its members.

Activities surrounding the implementation of the unprecedented federal traceability framework, through Title II of the Drug Quality and Security Act, dominated the first quarter of the year. With the deadline of January 1, 2015, for initial electronic requirements, we have hit the ground running to ensure distributors are prepared to meet this implementation milestone.

First, HDMA has put together a cross-functional working group, the Traceability Implementation Work Group. Composed of distributor members, this group is tasked with guiding our staff throughout the implementation process, ensuring that distributor priorities are voiced as policies are adopted. HDMA also is reaching out to industry stakeholder groups, as well as federal and state regulators — including the FDA and state Boards of Pharmacy — to ensure that the Drug Quality and Security Act is implemented as efficiently as possible.

Additionally, in our quest to foster knowledge and collaboration throughout the implementation process, HDMA is hosting a series of webinars related to this issue. The first webinar will take place on April 7, with a presentation from Connie T. Jung of the FDA Center for Drug Evaluation and Research. The Association also will host our popular Traceability Seminar on November 10–12 in Arlington, Va.

Beyond traceability, the prescription drug abuse epidemic in the U.S. continues to escalate. While increased enforcement activities by the DEA have focused on keeping prescription painkillers out of the hands of those who use them for purposes other than for which they were intended, sadly, it has become harder for legitimate pain patients to access the medications they need to live comfortably.

A recent survey of 1,000 pharmacists by the National Community Pharmacists Association underscores this fact. According to the survey, 75 percent of the respondents experienced three or more delays or issues with their controlled substance orders over the past 18 months, leading to "uneven access to painkillers" for legitimate pain patients. The plight of these so-called "Opiate Refugees" was highlighted in a story by Seattle NPR station KUOW, for which I was interviewed.

In a March 10 "Weekly Address," U.S. Attorney General Eric Holder noted that along with the rise in prescription painkiller abuse, there has been a 45 percent increase in heroin overdose deaths between 2006 and 2010. Commenting on this "public health crisis," AG Holder reinforced the Justice Department's — and the DEA's — commitment to confronting this issue. He further praised DEA's efforts to deter illegal diversion of prescription drugs to non-medical users and "... practitioners that illegally dispense prescriptions, pharmacists that fill those prescriptions, and distributors that send controlled substances downstream without due diligence efforts."

While we applaud AG Holder for highlighting this critical problem, HDMA contends that only a collaborative and transparent relationship between our distributor members and the DEA will help reduce prescription drug abuse in this country. Such an approach will require the healthcare supply chain and state and federal entities to work together in close partnership to effectively stem the tide of prescription drug abuse while minimizing the potential for unintended consequences on the supply chain and legitimate patients.

There is no one-size-fits-all solution to this issue, but legislation introduced by Reps. Marino (R-Pa.) and Blackburn (R-Tenn.) — The Ensuring Patient Access and Effective Drug Enforcement Act of 2014 (H.R. 4069) — is one solution with broad support from industry stakeholders, including HDMA. While not a "silver bullet," this legislation will foster a more collaborative effort to minimize supply chain disruptions and ensure patient access to vital medications.

Additionally, HDMA has continued to work with a variety of stakeholders and legislators to recommend comprehensive solutions to mitigate prescription drug abuse. In February, the Association came together with the American Medical Association, CVS Caremark, Teva Pharmaceuticals, Cardinal Health and Prime Therapeutics to form The Alliance to Prevent the Abuse of Medicines. HDMA also participated in the National Governors Association's (NGA) Prescription Drug Abuse Reduction Policy Academy, which resulted in the February 23 report, "Reducing Prescription Drug Abuse: Lessons Learned from an NGA Policy Academy." The NGA is convening a second Policy Academy this year, under a grant by the CDC.

This is an issue that is sure to evolve throughout the coming year — both nationally and in the states. HDMA is committed to educating fellow healthcare stakeholders and policymakers on how distributors can help in the fight to end this epidemic.

Shifting gears, globalization in the healthcare supply chain is increasing, with U.S. companies crossing "traditional" borders to make new business connections and expand their reach. With some of the largest healthcare distributors extending their businesses into Asian and European markets, it has never been more important to stay abreast of this new and exciting reality. As part of this, HDMA is now in full planning mode for its first-ever International Pharmaceutical Distribution Conference, (an international version of our Distribution Management Conference), which we have set for October 22–23 in Beijing at the JW Marriott. The conference will explore the new technologies and business practices designed to preserve patient safety, enhance security and achieve efficiencies in the global marketplace.

Back on the home front, the Center for Healthcare Supply Chain Research is putting the finishing touches on its sixth annual CEO Roundtable Fundraiser, taking place on April 1 in New York City. This year, the guest of honor is George Paz, Chairman & Chief Executive Officer of Express Scripts. For further information on attending this event, contact Karen Ribler.

We also are gearing up for the 2014 Business and Leadership Conference on June 1–4 in Phoenix, Arizona. In addition to providing a forum for you to connect with your trading partners, we will be joined by former Secretary of Defense Robert Gates and Dr. Eric J. Topol of the Scripps Translational Science Institute. It should be a great meeting, and I hope to see you there.

John Gray Signature

John M. Gray
President and CEO


HDA is the national association representing primary healthcare distributors, the vital link between the nation’s pharmaceutical manufacturers and healthcare providers. Each business day, HDA member companies ensure that over 15 million prescription medicines and healthcare products are delivered safely and efficiently to more than 200,000 pharmacies, hospitals, long-term care facilities, clinics and others nationwide. HDA and its members work daily to provide value and achieve cost savings, an estimated $42 billion each year to our nation’s healthcare system.


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