The opioid crisis rippling through America\u2019s communities has garnered significant media, government and corporate attention in the past few years, culminating in President Trump\u2019s recent, and perhaps overdue, declaration of a \u201cnational emergency\u201d in October of this year [1].\u00a0 Research from the Centers for Disease Control and Prevention (CDC) gives some credence to the hysteria.\u00a0 The CDC reports that physicians prescribed 259 million bottles of opioids in 2012, more than one for every American adult, and that there were 33,091 overdose deaths related to opioids in 2015, nearly triple what they were in 1999 and rapidly becoming one of the leading causes of accidental death in the U.S. [2].<\/p>\n
In recent years, both regulatory bodies and industry best practices have led to an adoption of serialization technology, or \u2018track and trace\u2019, of prescription drugs from the point of manufacturing to the patient\u2019s hands.\u00a0 This practice, enforced here in the U.S. by the Drug Quality and Security Act passed in November 2013, was originally intended to keep counterfeit drugs out of the supply chain as well as correct for issues resulting from compounding pharmacies mixing drugs [3].\u00a0 The regulation has also spurred the creation of real-time tracking software for drugs, giving manufacturers, distributors and pharmacies greater visibility into their supply chains.\u00a0 This has led to increased flexibility with drug recalls, more efficient drug development and manufacturing decision-making and improved customer relationships.<\/p>\n
McKesson, as the largest drug distributor in the U.S. with nearly $200 billion in annual revenue, has benefitted from this digitized supply chain development.\u00a0 However, upon closer examination of the opioid crisis, it appears McKesson has failed to leverage this technology to combat opioid abuse.\u00a0 Just this past January, McKesson agreed to pay a $150 million settlement for alleged violations stemming from failure to report suspicious shipments of opioids to certain geographies [4].\u00a0 This fine is the largest of its kind against any drug wholesaler in history and follows up on a $13 million civil penalty for similar violations in 2008 [4].\u00a0 Currently, McKesson, along with the two other largest drug distributors in the U.S., Cardinal and AmeriSource Bergen, are facing additional lawsuits from West Virginia, Ohio and the Cherokee Nation on the grounds of failure to notify authorities of suspicious shipments [5].\u00a0 Investors have taken notice as McKesson shares have fallen more than 40% from a peak of about $237 per share in May 2015 to $136 per share in November 2017 [6].<\/p>\n
McKesson historically distanced themselves from these types of conversations, putting much of the responsibility in the hands of manufacturers, authorities, pharmacies, doctors and patients [7].\u00a0 However, given the public pressure and financial considerations, they have re-hauled their compliance and controlled substances program yet again.\u00a0 Some of the initial courses of action included hiring employees from the DEA and other enforcement backgrounds, agreeing to independent auditors for compliance, suspending distribution of controlled substances in specific regions, adding a comprehensive diligence process on new pharmacy customers and tighter controls on the physical supply chain [8].\u00a0 In addition, McKesson has invested in more sophisticated analytics and tracking software to better flag and alert them to potential suspicious shipments to a pharmacy or region.\u00a0 On a more strategic, long-term front, McKesson has begun working with the DEA in a closely aligned partnership to hopefully share pieces of their digitized supply chain.\u00a0 And finally, McKesson has initiated policy efforts in Washington D.C., publishing a white paper and asking legislators to establish a National Patient Safety Network that would allow pharmacists to quickly and accurately check a patient\u2019s prescription history, among several other initiatives [8].<\/p>\n
McKesson has clearly taken a greater role to help solve the opioid epidemic in the U.S.\u00a0 However, the task ahead remains daunting.\u00a0 The drug distribution business is a thin margin industry and inherently competitive.\u00a0 While traceability and documentation will allow McKesson to provide a better, and perhaps more ethical, service, the competitive landscape is shifting as well.\u00a0 In addition, McKesson will also need to consider how their relationships with mom-and-pop and independent pharmacies develop, given these communities are often the hardest hit by the crisis and will be under greater scrutiny going forward.\u00a0 Ultimately, transparency in the prescription pain drug market should benefit these relationships.\u00a0 McKesson could move to improve information sharing among Prescription Drug Monitoring Programs (PDMPs), especially across state lines, leveraging its data to allow various pharmacies and physicians to understand when patients or physicians might be abusing the system.<\/p>\n
While McKesson has had to pay recently, it remains a question of how much responsibility and potential solutions for the opioid crisis lie with the pharma distributors?\u00a0 And, as McKesson and others leverage better technology to limit the proliferation of pain medications, how do they ensure that their heightened sensitivity doesn\u2019t prevent the drugs from getting to the patients who need them most?<\/p>\n
(799 words)<\/p>\n
Endnotes<\/strong><\/p>\n [1] Hirschfield Davis, Julie, \u201cTrump Declares Opioid Crisis a \u2018Health Emergency\u2019 but Requests No Funds,\u201d New York Times<\/em>, October 26, 2017, [https:\/\/www.nytimes.com\/2017\/10\/26\/us\/politics\/trump-opioid-crisis.html<\/a>], accessed November 2017.<\/p>\n [2] Rudd RA, Seth P, David F, Scholl L. Increases in Drug and Opioid-Involved Overdose Deaths \u2014 United States, 2010\u20132015. MMWR Morb Mortal Wkly Rep 2016;65:1445\u20131452. DOI: http:\/\/dx.doi.org\/10.15585\/mmwr.mm655051e1<\/a><\/p>\n [3] Drug Supply Chain Security Act of 2013 (DSCSA). HR 3204. 113th<\/sup> Congress, 54th<\/sup> session. Congressional Record<\/em> 127, no. 587. (Nov 27, 2013).<\/p>\n [4] U.S. Department of Justice, \u201cMcKesson Agrees to Pay Record $150 Million Settlement for Failure to Report Suspicious Orders of Pharmaceutical Drugs,\u201d January 17, 2017 (Washington, D.C.), [https:\/\/www.justice.gov\/opa\/pr\/mckesson-agrees-pay-record-150-million-settlement-failure-report-suspicious-orders<\/a>], accessed November 2017.<\/p>\n [5] Kacik, Alex, \u201cPharma supply chain ramps up technology to battle opioid epidemic,\u201d Modern Healthcare, <\/em>September 16, 2017, [http:\/\/www.modernhealthcare.com\/article\/20170916\/NEWS\/170919916<\/a>], accessed November 2017.<\/p>\n [6] Cortez, Michelle, \u201cDrug Distributors Fall Ahead of \u201860 Minutes\u2019 Report on Opioid Crisis,\u201d Bloomberg Markets<\/em>, October 13, 2017, [https:\/\/www.bloomberg.com\/news\/articles\/2017-10-13\/drug-distributors-fall-ahead-of-60-minutes-on-opioid-crisis<\/a>], accessed November 2017.<\/p>\n