The Drug Shortages Struggle

Jill Wechsler, Pharm Exec's Washington Correspondent

Jill Wechsler is Pharm Exec's Washington Corespondent

Pharmaceutical Executive

Pharmaceutical Executive, Pharmaceutical Executive-11-01-2011, Volume 0, Issue 0

Clamor for critical therapies prompts probes of prices, production practices.

Drug shortages have become much more acute in the last two years, largely due to manufacturing failures and supply chain disruptions involving critical treatments. Oncologists can't obtain widely used chemotherapies to treat seriously ill patients. Surgeons are postponing operations because they lack key anesthetics and pain medications. Doctors are struggling to obtain vital parenterals for premature babies and for patients requiring infusion. And dozens of clinical trials have been halted because investigators lack adequate supplies of cancer drugs used as components of treatment arms or as controls.

Jill Wechsler

These issues made headlines as Congressional committees held hearings in September on the drug shortage crisis and broader supply chain problems. An FDA public workshop also provided a forum for health professionals, patient advocates, drug distributors, and manufacturers to air concerns and propose remedies. The resulting publicity has boosted support on Capitol Hill for legislation that addresses pharma supply chain issues in general, and the drug shortage situation in particular. FDA has prepared a report analyzing steps it can take to tackle shortages with its current limited authority, and the Government Accountability Office (GAO) is examining the causes of and responses to the drug shortage crisis.

FDA recorded 178 drug shortages in the US in 2010, up from 157 in 2009— and much more than the 50 to 60 range of previous years, reported Edward Cox, coordinator of the drug shortage program at the Center for Drug Evaluation and Research (CDER), at the FDA workshop. The University of Utah Drug Information Service identified 210 shortages for drugs and biologics as of mid-September and is tracking some 260 active shortages nationwide.

Prices Too Low?

Three-fourths of the shortages reported to FDA last year involved sterile injectables—and almost all of them for "medically necessary" drugs, noted Howard Koh, assistant secretary for health in the Department of Health and Human Services (HHS), at a hearing before the House Energy and Commerce health subcommittee. Koh cited a long list of underlying factors: industry consolidation, lack of raw materials, changing inventory and distribution practices, production delays, rising demand, and business decisions to close down plants or exit low-profit markets.

Information, Please!

One popular remedy is for manufacturers to inform FDA in advance of supply problems. The agency reports that early warnings helped it head off 38 potential shortages in 2010 and 99 so far this year. When FDA knows of a looming supply interruption, its staff can expedite the approval of new suppliers, alternative production sites, and changes in product specifications. Agency officials also can bend the rules to keep a violative product on the market, to encourage other firms to ramp up production, and to permit temporary importation of unapproved products to fill supply gaps.

FDA officials emphasize their regulatory flexibility to counter charges that overly aggressive enforcement of manufacturing rules aggravates supply problems. The agency doesn't halt production for minor violations, they insist, but only for significant problems with drug sterility and contamination. Before requesting a drug recall or seizure, they check to make sure such action won't precipitate a shortage. However, FDA enforcers will take action when they find glass and metal particles in vials and new impurities and degradants.

Under current law, FDA often lacks information on looming shortages because only sole-source manufacturers of critical medicines have to give notice of plans to discontinue production. Some companies voluntarily inform FDA of likely short supplies, but most do not, and often such information comes in too late for timely action.

To remedy this limitation, Congress is considering legislation requiring six-months advance notification of production changes for a broad range of prescription drugs. There would be penalties for noncompliance, along with leeway for companies able to demonstrate that a problem could not be anticipated.

While advance notification may help FDA head off some shortages, the danger is that early release of information on production problems could lead to hoarding and price gouging. Hospitals and doctors report that gray market profiteers are inundating them with faxes and phone calls offering scarce drugs at huge markups. In response, Rep. Elijah Cummings of Maryland, the top Democrat on the House Oversight and Government Reform Committee, launched an investigation last month of leading secondary distributors, seeking information on sources and profits on certain drugs.

And advance notification is not always possible. FDA officials concede that many manufacturing problems cannot be anticipated, such as equipment breakdowns, plant fires, and natural disasters such as earthquakes and volcanoes that can disrupt supplies without warning.

Seeking Solutions

Manufacturers generally support stronger early notification requirements, largely to counter charges about low-quality production, and decisions to drop a critical drug that puts profits over patients. In addition to early warnings about supply problems, FDA wants industry to identify and promptly correct manufacturing violations and to implement quality-by-design strategies to prevent production failures in the future. Manufacturers can head off shortages, say FDA officials, by developing continuity of supply plans, with backup suppliers and alternative production strategies that achieve redundancy in production for key therapies. On their part, manufacturers want the Drug Enforcement Agency (DEA) to be more flexible in increasing annual quotas on active ingredients for controlled substances when a competitor halts production.

Industry also hopes that better compliance will head off more onerous regulation. Critics are urging antitrust officials to scrutinize proposed pharma company mergers more closely to assess whether a new combination would jeopardize future drug supplies. Some providers want the federal government to establish stockpiles for medically necessary drugs, as is done for treatments against bioterrorist attacks and pandemics. There's also broad support for FDA to have more resources to expand its very small drug shortage program, which was established in 1999 to manage anticipated supply disruptions with the Y2K shift to the new millennium.

Along with stiffer rules and penalties, there's interest in offering added incentives for manufacturers to enter depleted markets. These include tax credits or rebates for manufacturers that update facilities or launch production of low-profit drugs. Some kind of exclusivity could be provided for new production of drugs in short supply or identified as vulnerable to supply problems. Or, generic drug makers might be eligible for reduced user fees on applications to revise or expand production of hard-to-obtain medicines.

Balance Needed

Parallel to the shortage crisis, FDA has been campaigning for more authority to control drug counterfeiters and manage an increasingly global pharma supply chain. A number of bills before Congress would strengthen FDA's ability to halt illegal imports and to ensure quality pharmaceutical production at home and abroad.

At a hearing Sept. 14 before the Senate Health, Education, Labor, and Pensions (HELP) Committee, Deborah Autor, recently named FDA deputy commissioner for global regulatory operations and policy, presented a long wish list of policy changes that would promote drug safety and level the playing field between domestic and foreign manufacturers. Autor wants mandatory recall authority for drugs, power to detain and destroy violative imports at the border, and much stiffer penalties for noncompliance. Drug manufacturers and importers would have to register and list manufacturing facilities using identifier numbers, and importers would have to demonstrate that they meet quality standards, instead of FDA having to prove that they do not. Autor also seeks to establish a stronger track-and-trace system, which would help hospitals and physicians know whether drugs from unknown sources are legitimate. And foreign companies that refuse FDA inspections could not export to the US.

Industry supports many of these changes, but is wary that overly strict requirements could make low-profit markets less attractive to manufacturers. The challenge is to strengthen FDA without creating more shortages.

Yet, patients are waiting. Short supplies of drugs to treat children with leukemia is "shameful," lamented oncologist Len Lichtenfield at the FDA workshop. "It's hard to believe that in this country, because a drug doesn't make a lot of money, we can't provide necessary drugs and parenterals."

Jill Wechsler is Pharmaceutical Executive's Washington correspondent. She can be reached at jwechsler@advanstar.com