Podcast

speaker-0 (00:01.176)
This is On Background, a deep dive behind the scenes with Health Policy Insiders. Please note, everyone on this podcast is representing themselves. No one is speaking for any corporate, academic, or government entity. It’s just nerds talking about healthcare. With Steve Perente, Matt Stoll, and our mystery health policy expert, JJ.

speaker-0 (00:25.24)
Welcome back to On Background. This is episode three, notable in that it is actually in part being recorded on the boat that is the namesake for the podcast. Thank you, Steve, for doing this in DC. So today our guest is Marta Wyszynska. She is formerly the director of economic staff at the FDA and is now a senior fellow at the Brookings Institution. Marta, thanks for coming on.

speaker-2 (00:50.678)
Thank you for having me.

speaker-3 (00:51.97)
So, yeah, and I, I’ve always wanted to have this podcast actually be on the boat that this podcast is named on, which is on background, you know, used to actually in a sense, should put this, it’s, it is a media reference, right? Let’s discuss that policy idea over drinks on background. That, that was the original formulation. So Marta, it’s, I’m thrilled that you’re here to join Matt and JJ on this conversation. You’ve done so many different things, but you’ve done so much more recently that’s in the pharmaceutical space and what.

really excited me about bringing you into this conversation was that there’s just so much going on that’s sort of vital that I think needs to get talked about. Kind of like when we had a previous conversation with Karen Mandelbaum talking about the privacy and high regs for interoperability to make it real. Same thing applies here. So I’m just going to start off by just having you give a little bit of a level set of sort of like things that are keeping you up at night. And then we’re going to dive into our conversation strictly in the pharma space.

speaker-2 (01:46.946)
Thanks, Steve. So what’s keeping me up at night about pharma? I will say that probably what I am thinking about the most right now is the potential impact that tariffs might have on drug supply chains. All my work currently is on prescription drug supply chains and their resilience, their reliability. I’ve done a lot of work on drug shortages.

Those shortages keep on happening. There has been a lot of interest, bipartisan interest to try to address some of these issues. you know, sort of I’ve already been in this space thinking about how to deal with existing shortages. And now there’s a big question. Will tariffs help or will they hurt? Are they terrific or terrifying?

speaker-0 (02:36.078)
And I had one question for you, well, probably a couple of questions, but so how do we, how do you measure the extent of the problem that is drug shortages and how common are they in the industry?

speaker-2 (02:47.896)
So there are about 100 drug shortages each year, and we’ve had that for over a decade. They really vary by size. We’ve had drug shortages of drugs that are used for pediatric cancer. Not many patients are taking them, but clearly vital, right? We have an ongoing shortage of ADHD drugs, which is affecting millions of people. And probably many listeners.

are affected by it. So it really varies by size, but it’s about 120 drugs the way FDA counts it, but it’s about that number of drug molecules. Those are usually generic drugs. So the drugs are off patents, not branded drugs, and a lot of them are used in the hospital setting.

So it’s much more likely to see a cancer drug being shortage than something like an oral dose pill that’s taken by many people.

speaker-3 (03:48.342)
Let’s, I think it’s, let’s get a little deeper. So I know that there are some very prominent drug shortages that are going on right now. You mentioned ADHD. What else are sort of other major ones that are out there that are concerning people that are very, very common.

speaker-2 (04:03.096)
So I will mention some of the more recent ones. So we just dealt with a massive shortage of saline. Talking about a basic product, this is basically saltwater, right? So there was a major shortage of saline that I think the markets have recovered since then. Last year or the year before, we had a major shortage of carboplatin and cisplatin, which are two very basic chemotherapy drugs that are taken by about.

a million people each year. We have had ongoing shortages of a number of drugs that are used to treat trauma patients, to revive them in trauma. think last year when I was looking up some statistics, eight out of the 14 drugs that are used in trauma were actually in shortage. So it’s pretty bad out there, Marge.

speaker-1 (04:51.666)
This is JJ. You you talk about these shortages and in particular, I’m wondering, like, for example, the ADHD shortages, is that a regional thing? Is it state by state? Are there regional sort of variations about where it’s really more of a problem in certain areas than others in general?

speaker-2 (04:53.857)
it

speaker-2 (05:12.878)
So there are actually two different measures for shortages. The FDA measure is really a market-wide shortage. So when FDA decides whether a drug is in shortage, they will actually do a market-wide assessment. And they might resolve a shortage even if there might be still local issues. Generally, these are national shortages. Again, you might see some variation.

So ADHD medications might be more available in some pharmacies than others. But this isn’t really that we don’t really have it on the West Coast versus on the East Coast or in particular states. The distribution system in the United States for these drugs tends to be very national. So that’s not usually the issue.

speaker-1 (05:59.566)
Yeah, and I just, wonder about that because that one seems like it has some potential for abuse. Again, I think that’s why it’s stuck in my head, but you know, that ADHD medication in particular.

speaker-2 (06:07.598)
Yeah, so I think it might be helpful to talk about what causes shortages. so there’s a pattern to how shortages occur. And the pattern is the same. There’s either a demand shock or a supply shock. And then the supply chains are not resilient enough to absorb that shock. That’s sort of a simple recipe for how you end up with any shortage, not just for drugs, for anything, right? What is causing the different

shortages that we mentioned. I mean, the causes are somewhat different. So with ADHD medications, we have had an increase in the number of really of adults taking ADHD medications. And so there’s been an increase in demand. It so happens that ADHD drugs are controlled substances and the Drug Enforcement Agency controlled the quota and they haven’t increased the quota. So you have an increase in demand running into a quota system. And so you end up with a shortage.

But that’s an unusual situation. a very specific idea. These shortages are very specific to that context. With saline, Hurricane Helene hit a flooded site in North Carolina that made 60, 60, 60 % of saline volume that the United States uses. And so they wipe out overnight 60 % volume of production. And so how could possibly supply chains overnight

recover with that amount of saline gone, right? The carboplatin shortage and cisplatin, there was a company that was inspected by FDA. FDA found major problems at the facility. were, this facility actually happened to be in India, so they somehow had heads up that inspectors are coming. They were shipping trucks of documents. They were actually burning some documents with acid.

I mean, we’re not talking negligence, we’re talking fraud. So after FDA inspection, which resulted in a really scathing, like what kind of quality oversight do you have? A warning letter, not a warning letter, an inspection report. The company decided to shut down production to figure out how they can sort of get back into compliance with the FDA. One of the drugs that they were making, and I don’t remember whether it was carboplatin or cisplatin.

speaker-2 (08:27.084)
hit 50 % market share. So again, suddenly there’s a whole 50 % of the production of a really important chemotherapy drug is gone. And the supply chains are not resilient enough to withstand that kind of a shock.

speaker-0 (08:42.838)
Is the lack of resilience due to… I mean, is it one easily… I imagine it’s not one easily definable route. it because there’s not enough… there are not enough suppliers due to market dynamics or economics of making the drug and selling the drug? Is it reagents? Is it distribution?

speaker-2 (09:04.814)
Yeah, it’s a great question. in some ways, you know, we tend to think of, so this is again why this happens much more in generic drugs, by the way. So we think of generic drugs as an example of a really competitive market. You have the brand patent expires. A number of companies file what are called Andoth, which is the abbreviated new drug application. They get approved by the FDA.

prices really drop, so you have a lot of entry prices drop. This is all great. There is a tremendous amount of competition because what those companies have to establish is they have to establish that they are the same as the brand. Basically, they become their perfect substitutes to each other. They’re therapeutic equivalents. It really should not matter which one you’re taking. And so the only thing that ends up mattering to buyers is the price. And what you end up

with is that price is driven to marginal cost. And if there is a, basically these companies have very little incentive to buffer their supply chains, to have a backup supplier, to, you know, to really make sure that you are going to spend enough time cleaning between one batch and another.

It’s very thin margins business. So over time, as prices really sort of drive down, you end up with fewer manufacturers that are staying in the market. It’s still a very competitive market. It’s almost like a Bertranco petition, a very competitive market with very few players. And so when then you have a shock, there is very little buffer and a large part of the market share is gone.

Part of the, there are actually usually far fewer manufacturers in what are called generic injectable market. So I previously talked about solid oral dose drugs like ADHD where you have tablets. Those markets are much more resilient. The costs of entry are much lower. For the sterile injectable drugs, we’re talking major operations. So for example, what, how much, what does it take to build a new sterile injectable facility?

speaker-2 (11:19.712)
It’s three to five years. It could be half a billion dollars and they have something like 15 miles of piping inside them. I those are like really complex operations that later on are driven down to marginal cost. This is a really bad business to be in. So it’s all kind of held by, you know, band-aids and not a particularly resilient market.

And that’s where we see most of the shortages. So about two thirds of shortages tend to be generic sterile injectables.

speaker-0 (11:53.09)
So where it’s applicable is diversion ever a big source of shortages for a given drug?

speaker-2 (11:58.818)
You mean the version S with ADHD medications?

speaker-0 (12:02.122)
And that deflection of drugs to the black market, yeah, it would be ADHD in this example.

speaker-2 (12:07.754)
ADHD is sort of very unusual. Generally, the shortages that happen, I mean, there are some drugs that are controlled substances, but that’s not, I think the reason with ADHD, it’s more that you see an increase in demand. A lot of adults are getting diagnosed with ADHD. They’re getting prescriptions for this and simply that the supply is being, you know, being kept constant.

without the ability of, so you basically don’t see an increase in supply. I wouldn’t say that you could sort of argue that, you know, that many of these people might be inappropriately using it and this is why DEA is not increasing the supply, but this by itself is not, I have not heard of a case where this would be actually driving shortages.

speaker-3 (12:53.55)
Okay. So I guess, so you’ve definitely made the case, Marta, that there’s a problem. And so what are the regulatory solutions? I mean, you’ve been deep into the space. I mean, is there something where the market is left to its own devices is not sufficient that there needs to be basically, you know, for something of a critical supply chain, either whether it’s component part of a drug or just the actual finished product, we’re not allowed to have, you know,

One dominant player, we need to have two or three dominant players. What has been discussed as options that are possible or those things just outside the scope.

speaker-2 (13:26.936)
So let me actually put a pin in this question for a second because I want to introduce one other piece that in a sense complicates our policy discussion, which is that even though the shortages have primarily been in the generic sterile injectable space, we are also, there’s a lot of concern on the part of policymakers about a type of a shortage that we really haven’t experienced.

And that’s a shortage that’s caused by geopolitical issues. So we have not had a shortage caused by export bans in the last 20 years. Maybe since MTA started tracking and since their data was being tracked. But there’s a lot of concern, for example, about our exposure to China, right? And about wanting to ensure our supply chains. When you think about

what drugs might be exposed to geopolitical conflict. We’re talking about a much different set of drugs than just generic sterile injectables, right? There are thousands of drug products, each with their own set of ingredients, made in multiple facilities around the world. sort of thinking through that geopolitical exposure could be any stage of production, not just the

last stage that happens to be with generic sterile injectables, and it could be any product. So it’s a very different scope and type of a problem. And also how you address it is very different. And there’s this policy tension right now with how do we address shortages? And sometimes there’s lack of recognition that how you solve one type of a trigger

And one type of a shortage, the ones that are caused by manufacturing quality problems, that how you solve those for genetic sterile injectables is very different than how you deal with geopolitical risks, right? So let me talk a little bit about the sterile injectables. Something that we really didn’t talk about is, you know,

speaker-1 (15:29.656)
So I think.

speaker-2 (15:36.276)
Manufacturers have these incentives because their buyers really just are buying on price. And some of it is driven by how they are reimbursed, right? So government programs and commercial pairs will basically incentivize hospitals and pharmacies, but especially hospitals to buy the cheapest version of the generic as possible. And that basically gives

little incentive for the hospital to, or at least they don’t have a direct financial incentive, to be putting any weight on reliability of supply. So they’re just weighing the price, they’re buying on price without thinking about the reliability of supply. Now there have been studies where, you know, that the cost of hospitals to drug, on drug shortages. So when a hospital is being reimbursed for a drug, they have an incentive to buy the cheapest.

It is true that there is a cost to a shortage from a hospital’s perspective. know, a patient might need to be switched to a worse drug, right? You might have to buy a more expensive, use a more expensive substitute. So there are definitely costs to hospitals of needing to deal with shortages, trying to find backups. Sometimes they might have to send a patient to a different hospital.

But when you look at that and you look at the fact that there are programs where hospitals could actually have somebody select a more reliable manufacturer, there are organizations like Civica that will vet actually the manufacturers on reliability and they will carry for you a six month buffer of the product. But it costs more and hospitals are not signing up for it. So I think, you know, there is a fundamental problem in that

hospitals don’t fully internalize the true cost of a shortage. They’re not a particularly good agent in an economic speak for a patient. They don’t really internalize the true harm that results from. And so what all the reforms have been sort of circling around is how do we incentivize hospitals to put more weight on reliability given that right now they’re not really doing it enough.

speaker-2 (17:48.236)
I think there has been a lot of talk about, they don’t know who is reliable. There are organizations that are now putting programs in place. The problem is the uptake. It’s not a problem of information. There isn’t symmetry of information. There’s no doubt about it, but it is an issue around incentives and alignment of incentives. So a lot of the programs have, the proposals have been to…

to incentivize hospitals through Medicare to pay more attention to reliability. And I would say there’s sort of three main proposals. One set is to have somebody figure out how to rate which manufacturers are more reliable. It could be FDA, it could be some trusted third party. And then Medicare will pay more. If a hospital will basically do an add-on payment, if you buy from these players, we’ll pay you a little bit more. So that’s one set of proposals.

Another set of proposals is to basically say, let the market figure it out, give hospitals incentives to sign long-term contracts, and then make sure that they are creating reliability in the supply chain based on outcomes, and then pay them more if they achieve that. And a third bucket is, let’s just punish hospitals for it.

You know, they should be doing this and we basically will penalize them if they are not, if they are experiencing shortages. So there’ve been a number of think tanks and academics that propose various solutions. The Senate Finance Committee has bipartisan draft legislation on this topic. The ASPE and the White House and the Biden administration also put out some proposals. So there’s sort general alignment with like, we’ve got to change hospital incentives.

But I think exactly what is the right mechanism that would work hasn’t been really resolved. And also, if you’re going to pay hospitals rather than punish them, where’s the money going to come from?

speaker-3 (19:42.348)
Yeah, that was actually where I was going, because when she said Medicare is gonna pay more, I’m like, mmm, maybe? Could be. But I wanna pivot to something else. Hey, God, wait!

speaker-2 (19:51.52)
We can use the terrorists to offset that. How can that?

speaker-3 (19:55.63)
Oh, we’re going to get back to terrorists. We’re going to get back. We won’t run out the clock, but I want to ask about, um, see if you know whether this makes sense. So I imagine that DOD keeps a stockpile of all sorts of drugs that they need to have somewhere. you know, whether it’s military treatment facilities or it’s bases overseas or things like that, like they are, they would be essentially a, the equivalent of of the good hospital, if you will.

that’s doubling down to make sure that they have resilient supply. Has anyone actually looked to see what the up cost is to be the good hospital based on maybe something like that where you need to have that, you need to be prepared for everything basically.

speaker-2 (20:38.574)
So actually CMS had a proposal to pay hospitals for a six month buffer for select critical drugs. And the pushback was that it was not a very efficient way to hold the inventory at the hospital level. And also you might actually end up causing shortages if suddenly you start paying hospitals and they start, you know, stockpiling six months of product. And also a recognition that shortages

JJ based too on your point. So ADHD shortages maybe are not as varied and are not, they don’t vary across regions per se, but when it comes to hospitals, they very much vary across hospitals. So what has been happening is that the more sophisticated larger hospitals, they really monitor the market. And if there is a signal that there might be a disruption in production, they go on a shopping spree.

They don’t like to call it hoarding. They call it protective purchasing. But, you know, I’ve seen data showing that hospitals went, some hospitals, large hospital systems went from having two weeks supply of Carboplatin and cisplatin to sitting on a six month supply when other smaller hospitals and clinics could not find the product whatsoever. So, you know, a proposal to hold a six month buffer.

When there’s really no downside to some people running out of the gate and stockpiling, some of these shortages like I’ve talked to manufacturers who’ve said, so the return policies are also very liberal. You can return the product you buy through a wholesaler until the drug expires. So it’s several years. So one manufacturer told me that they were getting multi-million, three years later, getting multi-million dollar returns of ventilator drugs that hospitals purchased during

during COVID. So anyway, so you would have to probably keep a very, very large stockpile of six months at least, and probably still people would be panicking and hoarding. So I don’t know, you were asking me about the cost of it, but it would have to be sizable to have that. Now, so here’s actually a difference. So there have been proposals, and I think they make a lot of sense to have set up stockpiles for drugs like, you know, some of the cancer drugs. It’s a smaller market.

speaker-2 (22:58.602)
It is totally feasible. The cost is enlarged. It’s not. Setting up a stockpile for six months of salee, we smoke. Nobody has more than a couple of days of salee because those are one liter bags. The size of it is huge. The warehouse would have to be huge. it’s a very much just in time product. So it makes sense for some products and not the others. The drugs themselves frequently are not expensive.

definitely an option in some cases.

speaker-0 (23:29.07)
I wanted to go back to tariffs and talk about what we’ve been a lot proposed in the last couple of months. have been some that have been delayed. There are a few that are apparently going forward next week. Are there good, bad or indifferent? What impact might those tariffs have on protected drug shortages and can they be a panacea for it?

speaker-2 (23:52.472)
So in general, the reason why tariffs are used as a policy tool is because they can reorganize markets. They, by putting a tariff on imported products, you end up imposing a tax on those products. to the extent that prices are going to be passed on to some extent, it’s going to vary on how, on a number of, see, this is the problem with.

talking about this at 6.30 p.m. You guys really need to be doing them at 9 a.m. when people’s brains are still working. The way tariffs can reorganize markets is that the imported products now face a tax, which in turn will to some extent raise the prices for that product. Because of that, consumers are going to shift away from the imported product towards the domestic product, which is not facing that tax. So not only is the…

market share for the domestic products increasing, but they also have some room to increase prices, right? So it’s a benefit to domestic manufacturers and that’s sort of the premise of how tariffs could work. So when I’m thinking about tariffs in the context of drug supply chains, I am really separating brand products from generic products. Branded products have very high margins and somebody

once told me they are financial institutions with some R &D arm on the side. It is they organize their supply chains globally to really minimize the tax burden. And that is a major, major driver of how they organize their supply chains. There’s

The manufacturers will use their very frequently vertically integrated with their active ingredient manufacturer. so using transfer pricing is a really important tool to figure out how to minimize taxes. In a sense, what’s going to happen here is the same thing, but now you suddenly have a change in taxes, right? You have a tariff.

speaker-2 (25:53.356)
And so there is going to be some reorganization in the supply chains. What’s really interesting, and I don’t think people, even people who are in this drug manufacturing space, in the policy space, don’t, and I’ve seen actually some media coverage explaining tariffs and some of the experts that are being quoted, don’t realize that the tariff for drugs applies the country of origin is not where the finished dosage form drug is made, but where the active ingredient is made.

So if you are an Indian manufacturer selling a drug in the United States, but your active ingredient comes from China, you are a product of China, according to Border Patrol. your tariff, so you’re an Indian manufacturer will pay a tariff on their finished dosage product of the Chinese, the 20 % is going to be now because of where they source the API. So.

what we are going to potentially some reorganizing of supply chains with a lot of focus on API. So I don’t know if you saw, for example, there was an announcement, I think, Eli Lilly yesterday that what they would be doing spending and building manufacturing facilities in the United States. If you look at it, three of the four are API manufacturing sites, which makes perfect sense if you know that really it’s the API that drives the country of origin.

So they could still make the final product and the rest of the whole supply chain outside of the US. But as long as they have the very last step of API made in the United States, the tariffs don’t touch them. So on the branded side, there’s definitely enough money and potentially an incentive to be reorganizing supply chains. Where I really worry is on the generic supply side.

The margins, the level of competition is great. The margins are very, very low for a manufacturer to come pick up and build a manufacturing facility in the U.S. Just the expected net present value just isn’t there. It just is not.

speaker-2 (27:51.818)
So what I very much expect is that on the oral solid dose side, we are going to see an increase in prices because those are largely spot markets. There aren’t many contracts. That’s basically the prices, you whoever can give you the best price at the time. If you have 90 % of the manufacturers, or I would say frequently it’s going to be a hundred percent that actually have API made outside of the U S for a particular drug, the prices will rise, right?

There’s no other option. There’s no place for players to go. So we’re going to see increases in prices. With sterile injectables, I am concerned that passing on prices is going to be much more difficult for them. Number one, a lot of them have contracts with hospitals through group purchasing organizations that tie them to a particular price for one to three years. And I’ve already seen one of these group purchasing organizations tell hospitals that they should not worry because they have these contracts in place.

So a manufacturer that makes API outside of the United States, and by the way, a lot of domestic manufacturers use API from outside of the United States and they will have to pay a tariff on that API. I would say 36%, 30 to 40 % of sterile injectables in volume are made in the United States, but they largely use API from outside the US. So their cost structure is going to go up, not just…

It will go up for domestic manufacturers and the foreign manufacturers, right? But there will be pressure when it comes to their ability to pass on the price. so I do worry, again, the markets are pretty fragile. I do worry about some companies basically throwing in the hat and they say we can’t stay in this.

speaker-1 (29:39.8)
So Marta, what can we do about this? What can you do about this?

speaker-2 (29:44.002)
What can I do about this? I don’t think I can do much, but I mean, I can make some suggestions of what we do about this. I think what’s really important is that policymakers don’t think of tariffs as the only tool that they have. There’s a lot more. They have other tools that they should deploy. The markets are not going to reorganize themselves in the way that we would want to. So if we do want to onshore generic.

drug manufacturing, we do have to more directly engage in that, either through additional tax incentives, through eliminating some of the barriers that they face or the penalties that they face. If, for example, they do have an increase in the cost of their products. So there have been proposals even in the bipartisan Senate finance bill that I mentioned to eliminate Medicaid inflation rebates.

for some of these sterile injectable drugs, generic sterile injectable drugs. So sort of direct subsidies for helping to manufacture. And I will say what we need to also be realistic about is that it would take for us to unsure our supply chains and really have them be resilient and especially trying to win independence from China. There’s just, not enough money that…

our policymakers would probably be willing to spend. So that means that we have to be really smart about it and prioritize about what we want to do rather than like raise your hand. And so some of it is prioritizing and some of it is recognizing that, you know, French shoring is not a bad idea.

speaker-3 (31:14.358)
so Martin, want to, as we’re wrapping up all this, and this has just been fascinating totally. The, the GLP question we talked a little bit about in terms of shortages, but there also is this issue. My understanding is that like, you know, on the one hand, the GLPs are coming from branded manufacturers, whether it’s coming from Legobi and all the other pieces that are out there. But there’s also all these compounding products that are out on the market too, which my understanding was the compounded markets are supposed to be kind of like.

an isolated part of the market space. They’re not supposed to turn into what seems like it’s a giant production that for all this other for the basically weight loss drugs.

speaker-2 (31:48.29)
Yeah. So the GLP market is fascinating. So these are branded products. So in a sense, it’s sort of an unusual shortage and there was a massive increase in demand. Manufacturers could not keep up with manufacturing capacity. These are sterile injectants. They require, you know, they have these, they are dispensed through pens. So this is much more sophisticated manufacturing than just pressing a bunch of pills.

So manufacturers have been spending billions of dollars trying to expand capacity. But as we talked about, a building sterile injectable capacity takes a lot of time, not just money. So, we ask the shortage and under the law, when a drug is in shortage, even if it’s patent protected, it can be compounded. So what’s unusual about this situation is a couple of things. Number one, that this is a branded product. now you basically, generics cannot be on the market. There are no generics.

but you can have compounded products on the market. And also what is really interesting is compounders have no restrictions whatsoever on marketing, unlike branded manufacturers. So if you saw the Hymns ad at the Super Bowl, a lot of people were really upset about what kind of an ad is this? know, a drug manufacturer could never do this. It’s because there was a Supreme Court ruling that basically at some point challenged a law that Congress passed that put some restrictions on marketing of compounded drugs. so…

Congress repealed that and so there’s basically no guardrails on that. What’s important about GLP-1 drugs, mean not GLP-1, compounded drugs is that they are entirely legal. Even when there is no shortage, they’re just unapproved. So they don’t go through an FDA approval process. They have to follow certain standards through the US Pharmacopeia. There’s a certain set of standards that they’re supposed to follow. Some of them are a little bit more regulated by the FDA.

There’s two kinds of them and they are allowed to make a product during a shortage. Because GLP ones are, have a really strong consumer appeal. And also it’s very difficult for a lot of consumers to get it through their insurance, right? There is, they are marketing it directly to patients and because they are competing with a brand.

speaker-2 (33:58.286)
that patients can’t get through their insurance anyway, they can sell it at a much lower price. What has happened is now we have millions of people, if not tens of millions of people, taking compounded GLP-1 drugs.

FDA just announced that semiglutite is no longer in shortage. They gave compounders a certain number of days to basically say you’re not supposed to compound anymore. They got immediately sued by the compounding association saying you didn’t follow whatever procedures. There’s a lot of money at stake, huge amount of money spent in the courts fighting with each other, suing FDA, suing, you know, compounders, suing medical spas, suing just…

lot of lawsuits. Where are we going with that shortage? Again, compounding will still be allowed for certain types of pharmacies under certain circumstances, but FDA will have to enforce it. And FDA is undergoing a lot of cuts right now.

speaker-3 (34:53.164)
Yes. That is exactly what I was hoping to hear. not that. Just the detail of all the different twists and turns in terms of what’s going on there. Imagine that lawsuit might be enjoined by the American Association of Motion Pictures. It’s well, coming up on the Oscars coming up soon. Well, we’re really reaching kind of the end of really leaning into a lot of your time for this.

speaker-2 (34:57.614)
I’m just here in Watson.

speaker-3 (35:22.114)
But this has just been fascinating on so many different levels. This is, this is the ideal world of sort of doing this thing to basically find folks that really got deep into the weeds in an area. Cause I remember Marta, when we were doing research on the insurance markets, but consumer driven health plans and all that other stuff, consumerism. Let’s just say before time, so it’d be a while back. And I would never have imagined the level of detail that you’re going into for this. mean, it’s just amazing and really valuable actually for a ride.

of people here too. So,

speaker-2 (35:54.584)
Thank you so much. Thank you for having me on.

speaker-0 (35:56.792)
What’s the last word here then?

speaker-3 (35:59.458)
I think the last word is, well, I should want to give it back to Marta. It sounds like this is a money issue, I, then this might be another conversation we should have Marta, maybe like Marta part two, which is like, we know there’s a drug rebate problem that goes on on the PBMs. You alluded to it a little bit with the Medicaid pricing piece of it. mean, that might be a policy change that pays for this, that pays for resiliency, maybe. But I think the bottom line is that anybody who thinks that this

You know, drug shortages are a simple thing. We just wave a wand and everything’s there and we can just stand up all this capacity. I mean, you’re this conversation put paid to that and how so.

speaker-2 (36:36.458)
I always say, you know, I always say if we want to have resilient supply chains, we’ll have to pay for them. And then the question is why? There’s no free lunch in this space. So if you want to go to the hospital and have a hundred percent assurance that when you have, you know, that you’ll actually have all the drugs that they’ll have them for you. Well, we’ll all have to figure out a way to pay for this somehow.

speaker-0 (36:57.996)
That’s a pretty good last word. Marta Wyszynska, thank you so much for coming on.

speaker-2 (37:02.082)
Thank you guys.