Industry Weighs In on Mfg Issues to Mitigate Drug Shortages

By Patricia Van Arnum - DCAT Editorial Director

February 13, 2019

The formation of the FDA’s Drug Shortage Task Force last year has engendered recommendations by industry stakeholders to mitigate drug shortages, including proposals for production-transparency requirements, incentives for manufacturers, and a manufacturing rating system. What is the latest?

Progress in mitigating drug shortages

The issue of drug shortages, always a concern, reached on inflection point in 2011 and 2012 when the number of drug shortages, particularly generic sterile injectable drugs, rose, causing the federal government to take action to better oversee and monitor potential drug shortages. In 2011, the US Food and Drug Administration (FDA) reported 251 drug shortages in the US, of which 183, or 73%, were for injectable drugs. In 2012, the total number of drug shortages declined to 117, with 84, or 72% of those shortages for injectable drugs.

A major reason for these shortages, as reported by the FDA, was quality/manufacturing issues, which accounted for 37% of the drug shortages in 2012, with injectable drugs accounting for the majority of these shortages. The FDA explained the issues that arise. With fewer companies making older sterile injectable drugs, it created a limited number of companies and a limited number of production lines producing those drugs. In turn, the raw material suppliers those companies used were also limited in the amount they can make due to capacity issues at their facilities. This small number of manufacturers and limited production capacity for older sterile injectables, combined with the long lead times and complexity of the manufacturing process for injectable drugs, resulted in these drugs being vulnerable to shortage. When one company has a problem or discontinues a product or production, it is difficult for the remaining firms to increase production quickly and a shortage occurs. In 2012, the FDA estimated that of the 117 drug shortages reported, 27% were due to raw material issues and 27% were attributed to delays in capacity, other capacity issues, and other quality issues. Less frequent reasons for drug shortages were increased demand for a product (5% of the shortages in 2012 were due to this cause), discontinuation of a products (2% of shortages in 2012 were for this cause), and loss of a manufacturing site (2% of shortages in 2012 were due to this reason).

To address the issue, in July 2012, President Barack Obama signed into law the Food and Drug Administration Safety and Innovation Act (FDASIA). FDASIA provided the FDA with new authorities to help the agency combat drug shortages, including reporting requirements for manufacturers to report information about shortages to the FDA, including reasons for the shortage and the expected duration of those shortages. FDASIA also required the FDA to establish a task force on drug shortages that is responsible for developing and submitting to Congress a strategic plan to enhance FDA’s response to preventing and mitigating drug shortages. The FDA submitted its first long-term strategic plan for drug shortages in 2013.

Since then, the number of drug shortages have continued to decline. In 2013, the number of drug shortages in the US, as reported by the FDA, declined to 44, of which 35, or 80%, were for injectables. A similar level was reported in 2014 with 44 shortages, of which 30 drugs, or 68%, were for injectables. In 2015 and 2016, the number of drug shortages fell again although injectables still accounted for the majority of drug shortages. In 2015, 26 drug shortages were reported in the US, of which 15, or 58%, were for injectables, and in 2016, 23 drug shortages were reported, of which 17, or 74%, were for injectable drugs.

Further initiatives and proposals to mitigate drug shortages

Continuing with its policy goal of limiting the number of drug shortages, the FDA formed last year (July 2018) a new Drug Shortages Task Force, led by Keagan Lenihan, the FDA’s Associate Commissioner for Strategic Initiatives. The task force is charged to delve into why some drug shortages remain a persistent challenge and to look for solutions to addressing the underlying causes for these shortages. The task force includes senior leaders from the FDA, the Centers for Medicare and Medicaid Services, and the Department of Veterans Affairs.

In forming the task force, FDA Commissioner Scott Gottlieb outlined several ways in which the task force will consider addressing the issues of drug shortages. He offered an option to expand the FDA’s authority (which would require Congressional authority to expand such authority) to require applicants of certain drugs to conduct a risk assessment to identify the vulnerabilities in their drug supply that could cause a shortage and to establish risk-mitigation plans to address those weaknesses proactively. He said the task force will also be exploring manufacturing issues. The FDA said it is taking steps to support new technologies that can improve manufacturing and help reduce the chance that supply disruptions will occur. The FDA has implemented an emerging technology program and established an emerging technology team to engage with companies about new production technologies that the agency believes could prevent drug shortages caused by product quality and manufacturing problems.

Since then, the FDA held a public meeting in late November 2018 (written comment allowed to be submitted until January 11, 2019) to engage the public and industry stakeholders on ways to address and mitigate drug shortages. The public meeting consisted of input from the inter-agency task force force of senior federal officials of the FDA, the Centers for Medicare & Medicaid Services, the Department of Veterans Affairs, and the Department of Defense and industry stakeholders. With this input, the FDA said the task force intends to provide a report to Congress regarding the root causes of drug shortages. The report will also include recommendations regarding new authorities the FDA or other federal agencies could use to help provide “enduring” solutions to shortages.

Stakeholder input on drug shortages: manufacturing proposals

At a recent briefing held earlier this month (February 2019), the American Society of Health-System Pharmacists (ASHP) and the American Hospital Association (AHA) featured highlights from a recent report, Recent Trends in Hospital Drug Spending and Manufacturer Shortages from AHA, ASHP, and the Federation of American Hospitals. According to the report, essentially all hospitals and group purchasing organizations that responded to the survey indicated that managing drug product shortages is at least somewhat challenging, and nearly 80% reported that managing shortages is extremely challenging. The report also found that drug shortages place a financial strain on hospitals. Nearly 80 percent of survey respondents said drug shortages had at least a moderate effect on overall drug spending during fiscal years 2015–17.

Separately, the AHA provided a series of recommendations to address drug shortages, including both manufacturing incentives and requirements as outlined below.

Strengthen manufacturers’ drug shortage disclosure requirements. The AHA recommends that Congress strengthen the current drug-manufacturer shortage-reporting requirements to include disclosure of the problem that is causing the manufacturing interruption, the extent of the shortage, and the expected duration of the shortage. It suggests that failure to provide timely notice of an interruption should result in a monetary penalty for the manufacturer. In addition, it also recommends that manufacturers should be required to report current or anticipated supply concerns, including issues pertaining to the production or acquisition of raw materials.

Incentivize manufacturing contingency plans and/or redundancies. The AHA recommends that Congress should enact incentives for drug manufacturers to establish contingency plans and/or redundant production lines to be used in the event of a shortage, specifically for drugs that have fewer than three manufacturers. It says that these plans should include prioritizing the most medically necessary products, qualifying third-party suppliers across their network, and increasing production and inventory for raw materials and finished goods.

Enhance production-transparency requirements. The AHA recommends that Congress should require manufacturers to disclose to the FDA the location of production, including situations where a contract manufacturer is used. It also says that there may be situations, such as when a natural disaster is imminent (e.g., Hurricane Maria in Puerto Rico), in which the FDA should release information simultaneously to the entire drug supply chain, including healthcare providers, about which drugs are produced at impacted locations so as to allow providers and others to engage in advance planning. To prevent “hoarding of inventory” that could result from such communication, the AHA proposes that manufacturers could put products on an allocation list to ensure that the remaining supply is distributed equitably.

Enact shortage disclosure notification requirements for certain medical devices needed to administer drugs. The AHA says that Congress should enact legislation that requires medical device manufacturers to notify the FDA in the event of an interruption or discontinuation for certain medical devices and equipment needed to administer drugs (e.g., containers needed to dilute drugs for IV infusion), similar to the 2012 FDASIA notification requirement for drug manufacturers.

Assess drug shortages as a national security threat. The AHA suggests requiring federal agencies with jurisdiction over national security to conduct an analysis of domestic drug and medical device manufacturing capability and capacity for critical products to assess whether a threat to national security exists.

Include potential risk for drug shortages as a factor in the Federal Trade Commission (FTC) reviews of drug company merger proposals. The AHA recommends that Congress should request the FTC consider the potential risk for drug shortages when reviewing drug-company mergers and acquisitions.

The AHA also recommended several regulatory proposals as outlined below. 

Establish incentives to encourage manufacturers to produce drugs in shortage. The AHA recommends that the FDA should explore additional incentives to encourage other manufactures to begin producing drugs that are in shortage.

Prevent manufacturing shutdowns. The AHA suggests that the FDA should improve the process for enforcing the current good manufacturing practices (cGMP) regulations by shortening turnaround times and improving and standardizing processes of FDA reviews to identify problems prior to shutting down facilities and is calling for a more rapid review of corrective actions taken by manufacturers to reduce the duration of supply interruptions.

Establish a quality manufacturing initiative. The AHA recommends that the FDA should establish a manufacturing rating system where higher quality manufacturing receives the higher rating and that the FDA should consider incentives for manufacturers to participate in the program. It suggests that such rating system should include factors such as whether the company has a contingency plan for production interruptions and disasters and whether the company has a plan for redundancy in production.

Expand and improve the FDA’s drug-shortages list. The AHA points out that the FDA’s drug-shortage list does not take into account drugs that are in shortage based on their administration form and dosage, and does not include drugs that are experiencing significant regional shortages. Therefore, it suggests that the FDA should expand its list of drug shortages to incorporate drugs included on the ASHP’s more comprehensive drug-shortage list. It also should include additional information that would be helpful to mitigate shortages, such as information on 503B compounders.

Develop a list of critical drugs. The AHA recommends that the FDA should use the World Health Organization’s Model Lists of Essential Medicines and other existing resources to develop a list of critical drugs needed for emergency response and for what it terms needed for "saving and preserving life." It says that the critical drug list could be used for a variety of purposes, including for: stabilizing the supply of critical drugs by working with manufacturers and the FDA to create redundant product in multiple locations in anticipation of natural disasters and other supply chain threats; assessing the quality of pharmaceutical manufacturers measured against the importance of drugs on the critical list; and providing greater transparency surrounding the sources of these drugs’ raw materials and manufacturing locations so providers can more easily assess pharmaceutical product quality.

Reduce drug waste. The AHA says that the FDA should incentivize manufacturers to market repackaged sterile injectable drugs in the dosages commonly used in clinical care to reduce waste.

Create an Office of Clinical Affairs within the Drug Enforcement Administration (DEA).The AHA says that such an office would help ensure that DEA personnel are available to address the clinical implications of shortages of controlled substances, thereby better balancing the agency’s current focus only on diversion control and enforcement.

The AHA also recommends that all stakeholders in the market, including providers, manufacturers, wholesalers, group purchasing organizations and others should communicate with the FDA as soon as a potential shortage situation is identified, and continue to share information as available. It also suggests that drug manufacturers should develop shortage action plans that would help prevent, identify and actively respond to drug shortage situations if they arise and to update these remediation plans annually.