A Prescription for Drug Shortages

The accelerating use of generic drugs, which now account for 70% or more of prescriptions in the United States, has been greeted with great approbation. But the lack of market forces in the highly regulated pharmaceutical industry is resulting in a worrisome trend—shortages of drugs are occurring with increasing frequency. In the last few years, the shortages are no longer limited to orphan drugs but have begun to affect familiar medications that play a central role in current treatment. On October 31, 2011, President Obama signed an executive order allowing the US Food and Drug Administration (FDA) broader latitude in its efforts to contain drug shortages. But the problem is complex and will not be easily remedied.

In 2005, the Center for Drug Evaluation and Research reported 62 drug shortages, defined by the FDA as “a situation in which the total supply of all clinically interchangeable versions of an FDA-regulated drug is inadequate to meet the current or projected demand at the patient level.”¹ There were 157 shortages in 2009, including 72 shortages of sterile injectables. By 2010, the number of shortages had increased to 178, with 132 shortages affecting sterile injectables.² This number was already exceeded by the end of the third quarter of 2011, and some predictions are between 200 and 300 drug shortages by the end of 2011.²

An increasing percentage of the drugs in short supply is in the category of older, generic “sterile injectables,” which includes intravenous medications used for chemotherapy or for anesthesia. Approximately 75% of the shortages in 2010 were in this group.³ The process of manufacturing sterile injectable drugs is complicated. The FDA attributed more than 50% of the shortages of sterile injectables in 2010 to issues with product quality (presence of particulates, microbial contamination, impurities, and crystallization). A shortage of the anesthetic propofol, only recently resolved, developed when 2 of the 3 manufacturers were affected by product recalls—Hospira, for particulate matter, and Teva, for possible microbial contamination.⁴ Similarly, the recall and resultant shortage of cytarabine (Ara-C) was related to a product quality issue of crystal formation.⁵ Because there is no substitute for cytarabine in protocols for acute myelogenous leukemia (AML), unavailability of this drug presented major problems for oncologists and their patients. However, it was found that the crystals dissolved if the vial containing cytarabine was warmed, and the FDA subsequently permitted use of available product with this advisory.

Unlike propofol and cytarabine, which are made by multiple companies, many drugs are manufactured at one site by one company. In addition, drugs may have a single supplier of active pharmaceutical ingredient. Information about the sources of pharmaceutical ingredients is proprietary, but an estimated 80% of raw material for drug manufacturing comes from foreign countries.³ Thus, the supply chain can be quite tenuous and it is only sluggishly responsive to changes in demand.

Hospitals and outpatient surgical centers have been the first affected by the shortages of sterile injectables. Premier Healthcare Alliance surveyed 228 hospitals in the second half of 2010 and found that 80% of them had experienced shortages that led to “delay or cancellation of patient care intervention.”³ Attempts to work around a shortage are fraught with hazard. When hospitals substituted etomidate for propofol, at least 8 cases of phlebitis were documented. Instances of multiple use of single-use vials of propofol led to contamination and infection with hepatitis C in Nevada. There were 9 deaths in Alabama due to bacterial contamination of hand-mixed total parenteral nutrition products when the sterile premix was unavailable.⁶ In the case of chemotherapy, there are often no reasonable substitutes for the drugs in short supply. There were 23 chemotherapy shortages in 2010 and there were already 22 shortages by August 2011, according to the Hematology/Oncology Pharmacy Association.⁷ The National Cancer Institute has been forced to place some studies on hold, and individual patients have experienced interruptions in their treatment cycles. It is tempting to resort to “gray market” vendors of drugs, but the drugs they offer at substantial markups have an unknown provenance, a very risky situation.

The common denominator for problems with these drugs is that they are older, off patent, difficult to formulate, and have a defined shelf life. “Just-in-time” inventory control results in serious problems of supply when a facility has to stop manufacturing a product for a break in protocol or routine maintenance. It is difficult for competitors to expand production to fill the gap when they are already operating at full capacity.

The profit margins are typically small on generic drugs, and there is evidence suggesting that the prices of sterile injectables in short supply were declining in the years before a shortage.⁸ According to the National Patient Advocacy Foundation, “if the manufacturer cannot have some degree of a margin on the medication, they simply do not stay in the market.”⁶ Since 2005, Medicare B pays for an injectable drug based on the actual average selling price, plus 6%, and revises their figures only every 6 months. Large contracts from pharmacy benefit managers reduce medication prices. Given the pricing structure and regulatory environment, there is no assurance of a competitive return on invested capital used for facility expansion or improvement.

Sole source suppliers and suppliers of “medically necessary products” must notify the FDA when they are discontinuing production, but otherwise notification is voluntary. With early voluntary notification, the FDA prevented 38 shortages in 2010 and 99 shortages in the first 3 quarters of 2011, a remarkable record.¹ President Obama's executive order gives expanded authority to the FDA to “require adequate advance notice” of a shortage. It also permits expedited regulatory review of facilities that would mitigate a shortage. This is a start.

The template for a solution depends on the collaboration of key stakeholders—government, industry, and consumers. The FDA needs to improve the efficiency of the regulatory process. It is unreasonable to wait 2 to 3 years for approval of an alternate manufacturing site. Congress has authorized fast track applications in other circumstances. An expedited review process should be offered for expanding the manufacture of vulnerable drugs like the sterile injectables.

Industry must take the risk of redundant capacity to provide a more reliable supply stream. Currently, Hospira, Teva, and Ben Venue are expanding capacity in the sterile injectables market, but production at these sites is not anticipated for at least 18 months. In the meantime, hospitals and physicians will have to find other ways to compensate for scarce critical generic medications. Alternate treatment regimens posted on professional society Web sites would greatly assist clinicians.

For consumers, any nudge in the direction of less regulation and more market influence means prices will increase. The rule of thumb for health care is that it is possible to optimize any 2 of 3 desirable parameters—quality, cost, and time. In the current situation, high quality and low cost have led to scarcity. The brief years of cheap generic intravenous drugs may be coming to an end. Perhaps, the old adage is correct, “be careful what you wish for.”