Is FDA The Cause of Recent Drug Shortages?

Is FDA The Cause of Recent Drug Shortages?

June 19th, 2012 // 11:59 am @ jmpickett

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As the cliche goes – damned if you do, damned if you don’t. As the ongoing crisis over shortages of prescription drugs persists, a new report from the US House Committee on Oversight and Government Reform finds that a key culprit all along has been… the FDA. Instead of ensuring that the nation has a sufficient supply of safe and effective medicines, the committee charges the agency has overzealously enforced manufacturing regulations that have choked supplies.

The committee report reflects ongoing criticism from the pharmaceutical industry and others, including many Republicans, that the FDA has placed too much emphasis on product safety in the wake of the Vioxx scandal in 2004. The oft-repeated beef is that the agency has done so at the expense of patients who either need life-saving medications that are not approved quickly enough, if at all, or those who are unable to obtain treatment because manufacturers have been slapped with enforcement actions that have ground production to a halt.

In its report, the committee charges that “FDA regulatory activity has effectively shut down 30 percent of the total manufacturing capacity at four of America’s largest producers of generic injectable medications: Bedford Laboratories, Hospira Pharmaceuticals, Sandoz Pharmaceuticals and Teva Pharmaceuticals. Of the 219 drugs listed on the American Society of Health System Pharmacists shortage list as of February 21, 2012, at least 128 – 58 percent of the drugs on the shortage list – were produced by at least one facility undergoing FDA remediation,” the report states.

One of the drugmakers cited, for instance, has given up contract manufacturing. Late last year, Bedford Laboratories and Ben Venue Laboratories, which are owned by Boehringer Ingelheim, “voluntarily and temporarily” suspended operations at a troubled Bedford, Ohio, facility after the FDA and the European Medicines Agency both founded repeated violations, not the least of which was a 10-gallon can of urine found in a storage area. This prompted a police investigation (see here, here and here).

Meanwhile, Wall Street continues to speculate over whether Hospira will receive a consent decree from the FDA for sustained violations at different facilities (back story) and numerous plants run by Novartis, including some operated by its Sandoz generics unit, have been undergoing FDA scrutiny for several months (look here). In most cases, by the way, the types of medications for which shortages exists are generic injectables.

Consequently, the committee maintains that it may be another two to three years before manufacturing capacity returns to previous levels that existed before “FDA’s widespread remediation efforts.” However, the committee warns that Americans will have, by then, experienced instances of premature death, inferior treatment regimens and higher health care costs during that five-period stretching from 2010 to 2014. “The drug shortages are only the most visible result, thus far, of the FDA’s stepped up enforcement activities,” the committee charges.

“The drug shortage crisis that took off in 2010 began shortly after Margaret Hamburg became FDA Commissioner. Since this time, the FDA has failed to ensure that enforcement and compliance activities are conducted in a manner that does not create unnecessary shortages of critical drugs. In response to FDA prodding, companies producing generic injectable drugs have taken their manufacturing off-line simultaneous to other generic competitors also going off-line. These simultaneous shutdowns diminish the ability of competitors to alleviate the shortages with increased production,” the report states.

The agency, however, has taken steps to alleviate shortages. Recently, FDA officials cited ‘enforcement discretion’ to justify its response to ongoing shortages of life-saving medications. Specifically, the FDA is allowing temporary imports of two drugs due to shortages of Doxil and methotrexate (back story). Doxil, for instance, was one of the medications made by Ben Venue.

[UPDATE: Meanwhile, the committee cites an increase in the number of warning letters issued as evidence of overzealous enforcement during the past few years. “In the first year that Margaret Hamburg was FDA Commissioner,” the report states, “the number of warning letters increased 42 percent – from 474 letters to 673 letters. In Margaret Hamburg’s second year as FDA Commissioner, the number of warning letters increased a staggering 156 percent – up to 1,720 letters.”

An FDA spokeswoman writes us that “what is important to note is that in June 2009, Congress gave the agency authority over tobacco with enforcement at the retail level. Of the 1,720 warning letters they cite for Fiscal Year 2011, 1,040 are tobacco warning letters. In Fiscal Year 2011, the Center for Drug Evaluation & Research issued 108 warning letters and the Center for Biologic Evaluation & Research issued eight warning letters.” Put another way, the FDA is countering that the committee is deliberately overlooking a key distinction – not all letters pertained to drugs. END OF UPDATE].

The committee, in fact, does expand blame beyond the FDA. One “contributing factor” is the Medicare Modernization Act, which reduced prices paid by Medicare for many generic injectables, particularly older generics. Drugmakers “are reluctant to raise prices above what Medicare reimburses providers who administer them.” This is not new, but the committee has “learned that manufacturers are losing money producing generic injectable oncology drugs. When manufacturers lose money on a product, they are incentivized to switch production away from that product. Therefore, it is not surprising that many of the drugs on the shortage list are generic oncology drugs,” the report states.

Another scapegoat cited by the committee are group purchasing organizations and their ability to influence sales. “Largely because of GPO contracting and the MMA impact on changing Medicare reimbursement formula for injectable medications, individual generic injectable drugs are being produced by at most three companies. In 2010, 90 percent of generic injectable oncology drugs were produced by three or fewer manufacturers. In such a tight oligopoly, the temporary closure of a significant number of the production lines in one or two manufacturers’ facilities makes shortages much more likely” (here is the committee report).

In other words, the committee is saying that the FDA pendulum has not only swung too far, but the agency needs to take into consideration market forces and the impact its oversight of manufacturing facilities may have on production of needed medications. There is some validity to such thinking, given that shutdowns will hurt supplies. On the other hand, the FDA would also be blamed if a lack of oversight was later held responsible for shoddy manufacturing that is traced to patient harm. This reasoning would call for consistently and regularly maintained standards.