Drug shortage characteristics
During the observation period (2001 through February 2012), the vast majority (94 percent) of drugs were small molecule chemical
entities and 6 percent were large molecule biologics (e.g., proteins, polyclonal antibodies). Most drug shortages (80 percent)
involved generic equivalents, only 20 percent involved branded drugs.
More than three out of four (77 percent) drug shortages in our sample were sterile injectables and 20 percent were administered
orally. Of the branded drug shortages, 81 percent were sterile injectables. The number of branded large molecule therapies
are projected to increase rapidly through 2016—10 of the top 20 drugs. And the number of generic biologics (i.e., biosimilars)
entering the market is also expected to rise sharply during the next three to five years. Given that all large molecules are
administered in a sterile injectable format, the incidence of drug shortages is expected to rise sharply and the challenge
to manage these shortages will likely intensify.
Drug shortages have occurred in a wide variety of therapeutic areas, though there are several that are disproportionately
large. One out of five drug shortages (18 percent) involve anti-infective treatments; 17 percent of shortages involve drugs
targeting diseases of the central nervous system and pain. Drug shortages targeting cardiovascular illnesses and cancer-related
illnesses represent 12 percent and 11 percent of all shortages, respectively.
The supply chain is delicately balanced where a disruption of a single manufacturer can have a huge negative impact on the
delivery of drugs to pharmacies throughout the United States. This balance is in large part a function of the highly concentrated
nature of manufacturers capable of providing sterile injectibles. Teva, Hospira, and Bedford Laboratories produced 71 percent
of sterile injectables involved in supply shortages between 2001 and February of 2012. The voluntary suspension of Ben Venue
Laboratories in the fall of 2011 due to Good Manufacturing Practice (GMP) violations, for example, resulted in a major shortage
of Doxil and placed enormous pressure on the other manufacturers to fill the void. Ben Venue is the manufacturing arm of Bedford
Laboratories, a subsidiary of Boehringer-Ingelheim.
The average product shortage duration was approximately 19 months. Four out of every 10 drug shortages is associated with
manufacturing problems. The second most common reason, accounting for 27 percent of all shortages, is high demand coming from
a variety of sources including consumers, as well as competitors looking to secure comparator drugs for clinical testing.
A little more than one out of 10 drug shortages (13 percent) is due to drug discontinuation and withdrawal from the market.
The leading cause of manufacturing delays was voluntary suspension of suppliers for requalification of equipment. Inspection
citations and raw materials shortages were infrequent reasons for drug shortages and they tended to occur outside the United
Reported primary and secondary reasons for drugs shortages, by drug classification.
Economics plays a critical role in drug shortages. Unanticipated changes in supply and demand of a generic drug are often
at the core of a drug shortage. Low-cost generics are not profitable for manufacturers and in some cases sales decline over
time. In response, a manufacturer may divert capacity to more profitable areas, perpetuating a cycle of shortages. This often
leads to a "gray market" where price gouging by third party sellers occurs.
A number of challenges prevent the FDA from acting directly against drug manufacturers. First, the FDA relies on voluntary
information provided by manufacturers since they are not legally required to supply reasons for drug shortages. The FDA is
also limited in its ability to inspect manufacturers overseas. The agency has recently increased its staffing to meet industry
demands and is currently working with manufacturers to find alternatives. Recently, for example, the FDA approved the importation
of Lipodox from Sun Pharma (a company based in India) to solve the shortage of Doxil, an oncology drug. The FDA issued a draft
guidance in October 2011 mandating that drug manufacturers report shortages. This guidance was passed by Congress in the summer