Drug Shortage Optimism: FDA, Industry Expect Faster Resolution Than GPhA

Industry skeptical that quality metrics will help situation and argues reimbursement rate is not key shortage factor; FDA keeping database of ex-U.S. companies that could help relieve shortages.

The Generic Pharmaceutical Association is more pessimistic about the time it will take for generic drug manufacturing capacity to improve, alleviating the current shortage situation, than FDA and Hospira Inc., a new report on drug shortage solutions indicates.

The report, released March 26, summarizes the discussions and recommendations from the second Drug Shortages Summit convened by the American Hospital Association, the America Society of Anesthesiologists, the American Society of Clinical Oncology, the American Society of Health-System Pharmacists and the Institute for Safe Medication Practices in April 2013.

GPhA Senior VP-Scientific & Regulatory Affairs David Gaugh estimates that it may take five to 10 years to fully resolve the manufacturing capacity issues that are contributing to drug shortages. Roughly 30% of total industry production capacity of sterile injectables is currently inactive for various reasons, Gaugh said at the shortage summit. Generic sterile injectables account for the majority of U.S. shortages.

However, Hospira said at the meeting that their product shortages will likely be resolved much sooner than these estimates, a view that was echoed by FDA. While the report offers a snapshot on thinking that is almost a year old, it offers a window into how the various stakeholders have been approaching the problem.

Gaugh said the a number of factors could speed up his five to 10 year estimate, including FDA’s drug shortage program staff’s unprecedented collaboration with industry on alleviating shortages, the number of new companies that are preparing to enter the generic market for the first time and the recent passage of the generic drug use fee act.

But Gaugh said that companies with fixed production capacity continue to add new generic products to their portfolios, which may prevent an early resolution of drug shortages.

Upgrade, Don’t Degrade, Manufacturing

Both Hospira and GPhA recommended staggering the timing of future remediation efforts so that the maximum number of manufacturing plants can remain in operation.

Hospira also said that remediation would be facilitated if FDA allowed companies more lead time to implement the agency’s expectations for new procedures or new technologies.

FDA and industry need to collaborate to find a “workable pathway,” that allows firms to upgrade and remediate without shutting down or closing numerous production lines, Hospira VP-Government Affairs Juliana Reed said. This approach is particularly relevant for sole-source manufacturers and may help prevent a shortage or avoid worsening an existing one.

Hospira: Low Reimbursement Not Huge Shortage Factor

Despite what is often cited as one of the main factors for drug shortages – the low reimbursement rates for old generic products that despite meager economic incentives are expensive and complicated to produce – Reed discounted the theory that low reimbursement rates imposed by the Medicare Modernization Act are a significant cause of shortages.

“Nor did she fully concur that low pricing of generic injectables affect maintenance of quality conditions in manufacturing facilities,” the summit report says.

Hospira’s Reed also was unconvinced that evidence demonstrating a product was of higher quality than another would persuade buyers to pay higher prices for drugs, noting that current good manufacturing practices are the minimum standard for quality and that hospitals are under pressure to reduce costs.

FDA is currently looking to prevent drug shortages by incentivizing drug manufacturers to invest in quality, through the establishment of quality metrics. FDA hopes such metrics would lead to the market rewarding companies that invest in quality manufacturing (Also see "FDA Quality Metrics Could Lead Market to Pay for Quality, Prevent Shortages, Woodcock Says" - Pink Sheet, 28 Feb, 2013.).

But practitioners at the meeting also reiterated that paying more for drugs in the face of intense pressure to control or cut costs would be a challenge to justify if differences in quality are minor, or imperceptible, the summit report says.

Reed suggested that FDA or the government provide incentives such as tax credits, grants, offsets of filing fees or expedited review vouchers to companies that invest in production of drugs that cost less to buy than produce or that build in redundancy or other contingencies.

FDA nixed at least one of these possible incentives at the meeting. The agency said that waiving user fees for generics to help deal with shortages would not be a meaningful incentive as the generic user fee is low, less than $100,000.

FDA Has Database Of Shortage Fixes

The agency said it is maintaining a database of drug makers that currently market products in other countries that have expressed interest in assisting with shortages if they occur. Some of these companies have begun to seek approval for the products so they can market them in the U.S., it added at the meeting.

FDA recently said it is working with another supplier to alleviate the nitroglycerin shortage and the supply could increase in a matter of weeks (see related story, (Also see "Shortage Within A Shortage: Baxter Adjusts Allocation Of I.V. Products As Shortage Drives Demand" - Pink Sheet, 26 Mar, 2014.)).

However, companies who have pending ANDAs for products in shortage have been critical of FDA’s review timelines for these products despite the agency giving them expedited review status (Also see "Drug Shortages: Purchasers Requiring Paybacks; FDA’s Review Policy Questioned" - Pink Sheet, 10 Mar, 2014.).

FDA also said it has requested that manufacturers with unreleased shortage products that are nearing expiry or have already expired submit data FDA can use to support extending expiration dates, saying that some companies in this situation have submitted such data.

The agency also said they would consider extending the expiry date for products already in the field.