GAO Report Finds That FDA Needs Increased Authority to Address Shortages

By Jennifer M. Thomas –

A Government Accountability Office (“GAO”) Report released on December 15, 2011, the same day as a Senate Committee hearing, finds that FDA needs increased authority in order to address the growing problem of drug shortages.  In her statement before the Senate Committee on Health, Education, Labor, and Pensions, GAO Director of Health Marcia Crosse stated that according to the Report, FDA is currently “constrained in its ability to protect the public health from the impact of [drug] shortages.” 

We first posted about the serious public health problem presented by drug shortages, and the government’s search for a solution to that problem, after President Obama issued an Executive Order in early November.  Since that time, both the executive and legislative branches have focused on addressing drug shortages.  Moreover, industry appears to be taking steps to address the problem independently.  While the “Preserving Access to Life-Saving Medications Act of 2011” (S. 296, H.R. 2245) remains pending in committee, FDA announced the December 19th publication of an interim final rule to make better use of its existing shortage-related authority under the Federal Food, Drug, and Cosmetic Act (“FDCA”).  Also, the Generic Pharmaceutical Association (“GPhA”) announced its own Accelerated Recovery Initiative to “reverse current drug shortages and prevent further ones. . . .” (see here and here)

GAO Report

In its Report, the GAO confirmed much of what on-lookers, industry, and FDA already knew or suspected.  The Report cites a 200 percent increase in drug shortages between 2006 and 2011.  The 196 shortages reported in 2010 represented a record number for one year, and 2011 is on-pace to surpass that record, with 146 shortages reported as of June, 2011.  GAO reports that the average duration of a drug shortage between 2006 and 2011 has been 286 days, or approximately 9 months.  The GAO Report then goes on to analyze the causes of fifteen drug shortages that had a significant impact on public health in-depth, using information reported to FDA and obtained from four of the manufacturers involved in those shortages. Twelve out of the fifteen shortages GAO analyzed were caused primarily by manufacturing problems with other exacerbating factors such as lengthy facility improvements, etc.  The remaining shortages GAO analyzed were caused by disruptions in the supply of Active Pharmaceutical Ingredients (“APIs”). 

Sterile injectable drugs can be difficult to manufacturer and, according to FDA officials surveyed by the GAO, are currently being produced by a few aging facilities.  These factors contribute to the increase in manufacturing problems for these drugs.  The fact that very few manufacturers are producing certain drugs also means that if one manufacturer experiences manufacturing problems or supply chain issues, the others are not able to readily increase production in order to prevent a drug shortage.

According to the GAO, FDA has demonstrated that it can prevent most drug shortages if it learns of potential supply or manufacturing disruptions in advance.  However, FDA lacks statutory authority to require manufacturers to provide the agency with advance information about shortages, or to require manufacturers to take actions to prevent, mitigate, or end shortages.  As we noted in our previous discussion of this topic, FDA’s only authority with regard to drug shortages relates to life-supporting, life-sustaining medications, or those for use in preventing a debilitating disease or condition, and only when such drugs are produced by a single manufacturer.  21 U.S.C. § 356c; 21 C.F.R. § 314.81(b)(3)(iii).  Without additional authority, FDA’s ability to prevent drug shortages is very limited.

FDA Interim Final Rule

Nevertheless, FDA announced an interim final rule (Docket No. FDA-2011-N-0898) that seeks to make the most of its current FDCA authorities.  Specifically, FDA’s interim final rule modifies the agency’s interpretation of the term “discontinuance” and clarifies the term “sole manufacturer” with respect to the FDCA’s requirement that sole manufacturers notify FDA at least 6 months in advance of discontinuing certain products. 

Under the new interim rule, FDA defines “discontinuance” to “include both permanent and temporary interruptions in the manufacturing of a drug product, if the interruption could lead to a disruption in supply of the product.”  FDA states that the following circumstances, among others, would trigger “discontinuance” reporting under the agency’s new definition of that term: (1) delay in acquiring APIs or inactive ingredients that could lead to a temporary interruption in manufacturing; or (2) manufacturing shut-downs for maintenance or other routine matters, if the shut-down extends for longer than anticipated.

Further, the interim rule seeks to clarify any confusion about the definition of a “sole manufacturer” by defining that term as “an applicant that is the only entity currently manufacturing a drug product . . . whether the product is manufactured by the applicant or for the applicant under contract with one or more different entities.”  A “sole manufacturer” is such regardless of whether there are other NDA or ANDA holders for the same drug, if those other NDA or ANDA holders are not manufacturing the drug in the United States.  

FDA’s modified definition of “discontinuance” in the interim rule, in particular, may significantly increase the instances in which sole manufacturers are required to notify FDA of an impending production disturbance.  However, without action by Congress FDA will not be able expand the shortage reporting requirements much further and will remain, as the GAO report indicates, “constrained” with regard to drug shortages.