FDA and industry not waiting for Congress on drug shortages

The Obama administration is permitting importation of one critical drug while a new third-party group seeks to help generic drugmakers coordinate to avoid shortages.

By Doug Trapp — Posted March 12, 2012

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Pending legislation in Congress and efforts by the private sector aimed at reducing national drug shortages largely aim to improve communication among manufacturers, distributors, federal regulators, hospitals and physicians to prevent supply problems from arising in the first place.

Reducing drug shortages remains a high priority for congressional leaders. Lawmakers have released three drug shortage bills, and at least one more is in the draft stage. Congressional committees continue to hold regular hearings on the issue. Language on shortages is expected to be included in a reauthorization of the Prescription Drug User Fee Act, which is set to expire at the end of September.

But few expect Congress to produce a quick solution to the problem of shortages, which remain an immediate threat to patient care. An estimated 217 drugs were in shortage as of early March, according to the American Society of Health-System Pharmacists. Most were generic sterile injectables, including anesthesia and chemotherapy drugs. The number of drug shortages has nearly quadrupled since 2005.

In light of the problem's scope, efforts to reduce shortages are under way away from Capitol Hill as well. The Food and Drug Administration on Feb. 21 announced that it will allow the temporary importation of Lipodox as a replacement for Doxil, a drug in critical shortage that is used to treat ovarian cancer and other illnesses. The FDA also approved a new manufacturer for methotrexate, a cancer-fighting drug in a near-shortage status.

Health industry leaders praised these and other administrative actions to alleviate shortages. "Patients and families waiting for these drugs will soon be able to get the medication they need thanks to the collaborative work of FDA, industry and other stakeholders," said Generic Pharmaceutical Assn. President and CEO Ralph G. Neas.

Meanwhile, Neas said at this article's deadline that his association will soon name an organization to run a new private, third-party program to share information about critical drug supplies. Manufacturing interruptions and poor communication among drugmakers, regulators and purchasers are key causes of drug shortages, according to federal reports.

The GPhA's Accelerated Recovery Initiative will provide real-time supply and distribution information to manufacturers and distributers of generic injectable medications currently in shortage, among other drugs. Neas said such information would allow drugmakers to anticipate shortages of critical drugs and begin increasing their supplies. The data shared will not include any price information.

On Feb. 21, the FDA issued draft regulations advising the drug industry on how to comply with an executive order President Obama issued on Oct. 31, 2011. The order requires sole manufacturers of critical, lifesaving drugs to notify the FDA six months in advance of any planned production stoppage. Drugmakers must notify the agency of potential shortfalls from manufacturing problems and shortages of ingredients needed to produce a drug.

The executive order requires the FDA to expedite reviews of drug suppliers, manufacturing sites and manufacturing changes for critical drugs in shortage. The agency said it has prevented more than 100 drug shortages since the order was issued.

The American Medical Association supports Obama's executive order and agrees on the need for additional legislation to address drug shortages, said AMA President Peter W. Carmel, MD.

"Physicians need to be able to obtain the right drugs at the right time to provide optimal care to their patients, but drug shortages threaten patient care and safety," Dr. Carmel said. "This is a complex, multifaceted problem that will require a multipronged approach to solve."

Michael Link, MD, president of the American Society of Clinical Oncology, agreed that the issue is complex. "Before we jump on a solution, we want to understand the problem."

Looking for economic root causes

Drug shortages, especially those involving sterile injectables, primarily have been driven by increased demand and manufacturing disruptions, according to many observers. Manufacturing problems have a number of causes.

"Every drug kind of has its own story," said Stephen W. Schondelmeyer, PharmD, PhD, director of the University of Minnesota's PRIME Institute, which studies the economics of the drug industry. "There's no single cause and no single solution to this problem."

Demand for sterile injectable drugs has been increasing. Dr. Link said many oncologists believe shortages of these drugs are related to their relatively low costs. Under Medicare, physician-administered pharmaceuticals are reimbursed at average sales price plus a 6% administrative fee.

Some observers -- such as Ezekiel Emanuel, MD, PhD, an oncologist and former Obama adviser -- question whether this Medicare setup allows generic prices to rebound if demand spikes. If it doesn't, manufacturers might not have sufficient incentive to maintain their generic production lines.

Legislation pending in Congress, including a bill introduced Jan. 31 by Reps. John Carney (D, Del.) and Larry Bucshon, MD (R, Ind.), largely would address the shortage issue by tackling the communication problems among the FDA and industry members. But an aide to Carney said additional legislation addressing perceived drug market dysfunctions also may be needed.

"The reimbursement issue, some of the other issues are going to need to get handled as well," said the aide, who asked not to be identified. Lawmakers and their staff continue to research the possible economic roots of shortages.

"If the price is flexible and high, there's almost never a shortage," said David Ridley, PhD, assistant professor of business and economics at Duke University. Schondelmeyer and others said the Medicare payment structure may be a factor, but its impact probably is overstated.

Generic drug manufacturers also don't see existing prices as a problem, according to Neas, of the generic drug association. He said improved communication among drugmakers, especially regarding enforcement of manufacturing standards, would help companies continue production and prevent certain shortages. Facility closings and other FDA enforcement actions have increased in the last few years, and some manufacturers say they are unsure how to comply with certain orders.

FDA officials have insisted to lawmakers that agency actions are not to blame for drug shortages. Investigators have said that more than half of all drug shortages are related to product instability and contamination that can necessitate production stoppages. The agency is working to expedite approvals of new sources of sterile injectable drugs, but those drugmakers face high startup costs and tough regulations.

"It's just a very old, not terribly profitable market," said Curtis Rooney, president of the Healthcare Supply Chain Assn., which represents 15 group purchasing organizations.

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How did the FDA handle past drug shortages?

The Food and Drug Administration recently announced it is allowing the temporary importation of a key cancer drug in short supply and has expedited approval of a new manufacturer for another cancer drug in a near-shortage status. The agency has used both tactics when responding to past drug shortages. For each of 127 shortages in 2010-11, the FDA took one of several approaches:

Action Shortages
Asked other companies to boost production 31%
Exercised regulatory discretion 28%
Expedited review of other sources 26%
Took no action 6%
Exercised discretion on importation 5%
Asked sole source to boost production 3%
Other 1%
Total 100%

Source: "A Review of FDA's Approach to Medical Product Shortages," Food and Drug Administration, October 2011 (link)

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External links

Current drug shortages, American Society of Health-System Pharmacists (link)

"Economic Analysis of the Causes of Drug Shortages," Dept. of Health and Human Services, October 2011 (link)

Accelerated Recovery Initiative proposal, Generic Pharmaceutical Assn., December 2011 (link)

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