[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]
EXAMINING THE INCREASE IN DRUG SHORTAGES
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON HEALTH
OF THE
COMMITTEE ON ENERGY AND COMMERCE
HOUSE OF REPRESENTATIVES
ONE HUNDRED TWELFTH CONGRESS
FIRST SESSION
__________
SEPTEMBER 23, 2011
__________
Serial No. 112-88
Printed for the use of the Committee on Energy and Commerce
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COMMITTEE ON ENERGY AND COMMERCE
FRED UPTON, Michigan
Chairman
JOE BARTON, Texas HENRY A. WAXMAN, California
Chairman Emeritus Ranking Member
CLIFF STEARNS, Florida JOHN D. DINGELL, Michigan
ED WHITFIELD, Kentucky Chairman Emeritus
JOHN SHIMKUS, Illinois EDWARD J. MARKEY, Massachusetts
JOSEPH R. PITTS, Pennsylvania EDOLPHUS TOWNS, New York
MARY BONO MACK, California FRANK PALLONE, Jr., New Jersey
GREG WALDEN, Oregon BOBBY L. RUSH, Illinois
LEE TERRY, Nebraska ANNA G. ESHOO, California
MIKE ROGERS, Michigan ELIOT L. ENGEL, New York
SUE WILKINS MYRICK, North Carolina GENE GREEN, Texas
Vice Chairman DIANA DeGETTE, Colorado
JOHN SULLIVAN, Oklahoma LOIS CAPPS, California
TIM MURPHY, Pennsylvania MICHAEL F. DOYLE, Pennsylvania
MICHAEL C. BURGESS, Texas JANICE D. SCHAKOWSKY, Illinois
MARSHA BLACKBURN, Tennessee CHARLES A. GONZALEZ, Texas
BRIAN P. BILBRAY, California JAY INSLEE, Washington
CHARLES F. BASS, New Hampshire TAMMY BALDWIN, Wisconsin
PHIL GINGREY, Georgia MIKE ROSS, Arkansas
STEVE SCALISE, Louisiana JIM MATHESON, Utah
ROBERT E. LATTA, Ohio G.K. BUTTERFIELD, North Carolina
CATHY McMORRIS RODGERS, Washington JOHN BARROW, Georgia
GREGG HARPER, Mississippi DORIS O. MATSUI, California
LEONARD LANCE, New Jersey DONNA M. CHRISTENSEN, Virgin
BILL CASSIDY, Louisiana Islands
BRETT GUTHRIE, Kentucky KATHY CASTOR, Florida
PETE OLSON, Texas
DAVID B. McKINLEY, West Virginia
CORY GARDNER, Colorado
MIKE POMPEO, Kansas
ADAM KINZINGER, Illinois
H. MORGAN GRIFFITH, Virginia
7_____
Subcommittee on Health
JOSEPH R. PITTS, Pennsylvania
Chairman
MICHAEL C. BURGESS, Texas FRANK PALLONE, Jr., New Jersey
Vice Chairman Ranking Member
ED WHITFIELD, Kentucky JOHN D. DINGELL, Michigan
JOHN SHIMKUS, Illinois EDOLPHUS TOWNS, New York
MIKE ROGERS, Michigan ELIOT L. ENGEL, New York
SUE WILKINS MYRICK, North Carolina LOIS CAPPS, California
TIM MURPHY, Pennsylvania JANICE D. SCHAKOWSKY, Illinois
MARSHA BLACKBURN, Tennessee CHARLES A. GONZALEZ, Texas
PHIL GINGREY, Georgia TAMMY BALDWIN, Wisconsin
ROBERT E. LATTA, Ohio MIKE ROSS, Arkansas
CATHY McMORRIS RODGERS, Washington JIM MATHESON, Utah
LEONARD LANCE, New Jersey HENRY A. WAXMAN, California (ex
BILL CASSIDY, Louisiana officio)
BRETT GUTHRIE, Kentucky
JOE BARTON, Texas
FRED UPTON, Michigan (ex officio)
(ii)
C O N T E N T S
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Page
Hon. Joseph R. Pitts, a Representative in Congress from the
Commonwealth of Pennsylvania, opening statement................ 1
Prepared statement........................................... 3
Hon. John Shimkus, a Representative in Congress from the State of
Illinois, opening statement.................................... 5
Hon. Frank Pallone, Jr., a Representative in Congress from the
State of New Jersey, opening statement......................... 5
Hon. Henry A. Waxman, a Representative in Congress from the State
of California, opening statement............................... 6
Hon. Fred Upton, a Representative in Congress from the State of
Michigan, prepared statement................................... 158
Hon. John D. Dingell, a Representative in Congress from the State
of Michigan, prepared statement................................ 160
Hon. Edolphus Towns, a Representative in Congress from the State
of New York, prepared statement................................ 161
Witnesses
Howard K. Koh, Assistant Secretary of Health, Department of
Health and Human Services...................................... 7
Prepared statement........................................... 11
Jonathan M. Kafer, Vice President Sales and Marketing, Teva
Health Systems................................................. 66
Prepared statement........................................... 69
John M. Gray, President and CEO, Healthcare Distribution
Management Association......................................... 78
Prepared statement........................................... 80
Kevin J. Colgan, Corporate Director of Pharmacy, Rush University
Medical Center, on behalf of the American Society of Health-
System Pharmacists............................................. 87
Prepared statement........................................... 89
Mike Alkire, Chief Operating Officer, Premier, Inc............... 101
Prepared statement........................................... 103
W. Charles Penley, Chair, Government Relations Committee,
American Society of Clinical Oncology.......................... 117
Prepared statement........................................... 120
Richard Paoletti, Vice President, Operations: Pharmacy,
Laboratory, and Radiology, Lancaster General Health............ 131
Prepared statement........................................... 133
Robert S. DiPaola, Director, The Cancer Institute of New Jersey.. 141
Prepared statement........................................... 144
Submitted Material
Statement, dated September 23, 2011, of the National Coalition
for Cancer Research, submitted by Mr. Pallone.................. 25
Statement, dated September 23, 2011, of the National Community
Pharmacists Association, submitted by Mr. Pitts................ 32
Letter, dated September 22, 2011, from J. Evan Sadler, President,
American Society of Hematology, to subcommittee leadership,
submitted by Mr. Pitts......................................... 35
Statement, dated September 23, 2011, of the Generic
Pharmaceutical Association, submitted by Mr. Pitts............. 39
Statement, dated September 23, 2011, of Fight Colorectal Cancer,
submitted by Mr. Pallone....................................... 151
EXAMINING THE INCREASE IN DRUG SHORTAGES
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FRIDAY, SEPTEMBER 23, 2011
House of Representatives,
Subcommittee on Health,
Committee on Energy and Commerce,
Washington, DC.
The subcommittee met, pursuant to call, at 9:36 a.m., in
room 2322 of the Rayburn House Office Building, Hon. Joseph
Pitts (chairman of the subcommittee) presiding.
Members present: Representatives Pitts, Burgess, Shimkus,
Myrick, Murphy, Blackburn, Gingrey, Lance, Cassidy, Guthrie,
Walden, Pallone, Dingell, Schakowsky, Matheson, DeGette, and
Waxman (ex officio).
Staff present: Clay Alspach, Counsel, Health; Ray Baum,
Senior Policy Advisory/Director of Coalitions; Marty
Dannenfelser, Senior Advisor, Health Policy and Coalitions;
Andy Duberstein, Special Assistant to Chairman Upton; Debbee
Keller, Press Secretary; Jeff Mortier, Professional Staff
Member; Katie Novaria, Legislative Clerk; John O'Shea,
Professional Staff Member, Health; Chris Sarley, Policy
Coordinator, Environment and Economy; Alan Slobodin, Deputy
Chief Counsel, Oversight; Heidi Stirrup, Health Policy
Coordinator; John Stone, Associate Counsel; Phil Barnett,
Democratic Staff Director; Stephen Cha, Democratic Senior
Professional Staff Member; Alli Corr, Democratic Policy
Analyst; Eric Flamm, FDA Detailee; Ruth Katz, Democratic Chief
Public Health Counsel; Elizabeth Letter, Democratic Assistant
Press Secretary; and Karen Lightfoot, Democratic Communications
Director and Senior Policy Advisor.
Mr. Pitts. This subcommittee will come to order. The chair
recognizes himself for 5 minutes for an opening statement.
OPENING STATEMENT OF HON. JOSEPH R. PITTS, A REPRESENTATIVE IN
CONGRESS FROM THE COMMONWEALTH OF PENNSYLVANIA
In 2005, 61 drug shortages were reported to FDA. By 2010,
there were 178 reported drug shortages, 132 of which involved
sterile injectable drugs. So far this year, FDA has continued
to see an increasing number of shortages, especially those
involving older sterile injectable drugs. These shortages have
involved cancer drugs, anesthetics used for patients undergoing
surgery, as well as drugs needed for emergency medicine, and
electrolytes needed for patients on IV feeding.
It appears that there are many potential causes of these
drug shortages. In some cases, shortages have been caused by
quality and manufacturing issues. Additionally, production
delays at the manufacturer level, including limited production
lines for certain older drugs, and difficulty in receiving raw
materials and components from suppliers have caused drug
shortages. Many raw material suppliers also experience capacity
problems at their facilities, causing delays that ripple
through the drug production process.
Shortages can also result from a company discontinuing a
particular drug. Certain drugs are susceptible to shortages,
particularly those that are complex to manufacture, such as
injectable drugs, or require longer lead times. FDA cannot
compel a company to manufacture a particular drug, and, if
there is a shortage of that drug, it cannot compel other firms
to increase their capacity. Further, companies are not required
to notify FDA in advance of a potential drug shortage, unless a
company is discontinuing a sole source, medically necessary
drug. In that case, a company must inform FDA 6 months in
advance.
Drug shortages have real effects on real patients. Due to
shortages, patients have not received the appropriate drugs for
their conditions, often getting a less effective drug or a more
costly substitute as a result. According to a study done by
Premier Healthcare Alliance of 228 hospitals, retail
pharmacies, and other health care facilities, nearly 90 percent
of hospitals reported a drug shortage in the last half of last
year that may have caused a patient safety issue, resulted in a
procedure's delay or cancellation, required a more expensive
substitute, or resulted in a pharmacist compounding a drug.
I look forward to hearing from our witnesses today about
their experiences with drug shortages and learning what
remedies they believe are necessary. I would like to say a
special hello to Richard Paoletti, Vice President, Operations;
Pharmacy, Laboratory, and Radiology at Lancaster General
Hospital in my home district.
Lancaster General is the largest employer in the 16th
Congressional District, and, for 10 of the past 13 years, it
has been named among the ``Top 100 Hospitals in America'' by
Thomson Reuters, a leading source of healthcare business
intelligence. The hospital is also helping to revitalize the
northwestern part of Lancaster City through a partnership with
Franklin and Marshall College.
Again, thank you to our witnesses, and I will yield the
balance of my time to Congressman Shimkus from Illinois.
[The prepared statement of Mr. Pitts follows:]
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[GRAPHIC] [TIFF OMITTED] 77032.002
OPENING STATEMENT OF HON. JOHN SHIMKUS, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF ILLINOIS
Mr. Shimkus. Thank you, Mr. Chairman. And we want to
welcome our folks at the 2 panels. Obviously, this is of
concern. I am a market-based conservative capitalist, and
whenever there is a lag in a commodity good or product, you
have to really wonder about the demand and the supply and the
available cost because when there is limited supply and a high
demand, cost should go up.
So that begs a question is, what is constraining the market
signals from producing the product that the consumers need? Is
that insurance companies? Is that government reimbursement
rates? Is that the State Medicaid provisions? That is what I
will be looking at because the bigger the government is, the
more manipulative it gets in the market services, the less its
ability to provide goods and services to consumers.
So we appreciate that and look forward to it, and I yield
back my time, Mr. Chairman. Thank you.
Mr. Pitts. The chair thanks the gentleman and recognizes
the ranking member of this subcommittee, Mr. Pallone, for 5
minutes.
OPENING STATEMENT OF HON. FRANK PALLONE, JR., A REPRESENTATIVE
IN CONGRESS FROM THE STATE OF NEW JERSEY
Mr. Pallone. Thank you, Mr. Chairman. I want to thank you
for holding today's hearing on this important issue. I am
encouraged by the bipartisan nature of this effort and thank
our witnesses for joining us.
Today, we will discuss the recent increase in drug
shortages that have been the subject of numerous reports. Drug
shortages appear to be on the rise at an alarming rate and are
threatening the supply of some of our most important
medications from lifesaving oncology drugs to antibiotics that
rid us of infection to antiseptics that get us through the most
minor surgical procedures. These drugs have become an important
part of our healthcare system.
No patient must be told that their chemotherapy must be
postponed because the only drug used to treat their type of
cancer is unavailable. And likewise, no anesthesiologist wants
to begin their workday with the realization that they will have
to use subpar drugs on a patient because the one they normally
rely on is out of stock indefinitely. So we can't let this
become the new norm.
We are dependent upon the medications on the FDA's drug
shortage list for years and continue to look for them for our
health and wellbeing. It is alarming that drugs that have been
around for so long would suddenly be the most difficult to keep
hospitals, pharmacies, and doctors' offices supplied with.
Furthermore, these drugs tend to be low-cost generics, which
are an essential component of healthcare for most Americans as
they seek to keep their healthcare costs low.
In this fiscal climate, having a readily accessible supply
of generic medication is of profound importance, and to that
end, it has been disheartening to learn that the so-called gray
market would take advantage of such a dire situation to engage
in price-gouging at the expense of those desperate enough to
pay.
So I am hoping that we can begin today to identify the
cause of these shortages and discuss solutions for replenishing
our drug supply. We must address this sudden increase so that
Americans can continue to receive high-quality treatments at
low cost and remain confident in both the pharmaceutical
industry and the healthcare providers.
Unfortunately, companies are not currently required to
report to the FDA when a shortage will be occurring whether
because of change in investment strategy or manufacturing
difficulties, there is currently no policy for notification
unless the company is the sole manufacturer.
My colleague, Representative DeGette, has introduced
bipartisan legislation, H.R. 2245, the Preserving Access to
Life-Saving Medications Act of 2011, as the first step in
addressing this issue. This legislation would require
manufacturers to notify the FDA of any actual or prospective
drug shortages. And I want to commend Representative DeGette on
pioneering this effort and hope that as a result of hearing
from our witnesses today, we can identify additional solutions
to this growing problem.
This hearing will allow us to learn more about why drug
shortages are occurring, what the administration and industry
are doing to address the problem, and what new authorities the
FDA might need to prevent shortages from happening in the
future. And I am encouraged that we are exploring this issue in
our subcommittee today, look forward to working with you,
Chairman Pitts, as you get to the bottom of this issue. And
again, thank you for having the hearing.
I yield back.
Mr. Pitts. The chair recognizes the ranking member of the
full committee, Mr. Waxman, for 5 minutes.
OPENING STATEMENT OF HON. HENRY A. WAXMAN, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF CALIFORNIA
Mr. Waxman. Thank you, Chairman Pitts, for recognizing me
and for holding this hearing.
Recent media and other reports indicate that drug shortages
are now at an unprecedented level. Indeed, according to FDA,
the number of drugs in short supply in 2010 was almost triple
that of 2005. The shortages affect a broad spectrum of
critically important drugs--including oncology drugs to treat
lymphoma, leukemia, breast and other cancers--and the seizure
drugs without which surgeries have to be postponed and
antibiotics to remedy life-threatening bacterial infections.
Without these drugs, patients' lives are at risk.
Drug scarcities generally affect sterile injectable drugs.
These drugs are technically difficult to make and each drug is
usually manufactured by only one or a handful of producers. If
any one company develops manufacturing problems, which is not
uncommon, other companies may have little excess capacity to
help fill the need.
With the aging of our population, the outsourcing of drug
manufacturing, the increasing consolidation of drug companies,
and the general adoption of a just-in-time approach to drug
production and distribution, this problem may be significantly
worse unless immediate measures including congressional action
are taken to address its multiple causes.
Representative DeGette has introduced legislation that
would be an important first step in this process. H.R. 2245,
the Preserving Access to Life-Saving Medications Act of 2011,
would require manufacturers to notify FDA of any actual or
prospective drug shortages. Such advance notice would enable
FDA to help avoid or mitigate the shortage by both working with
the manufacturer and alerting hospitals and physicians of the
problem.
While this is an important piece of legislation that has
broad bipartisan support, I don't think anyone believes it
alone can solve the drug shortage problem. So I look forward to
hearing from our witnesses today to better understand the
causes of what is already a crisis for many patients and to
find out what we in Congress can do to help prevent shortages
in the future. We already had been working in bipartisan manner
to learn about this very disturbing issue, and I trust that we
will continue to work together to develop and enact legislation
to help address it and address it quickly.
Thank you, Mr. Chairman. I yield back the time.
Mr. Pitts. The chair thanks the gentleman. That concludes
our opening statements.
Our first panel will be Assistant Secretary for Health at
HHS, Mr. Howard Koh. And Mr. Koh, you may begin your testimony.
Please summarize in 5 minutes. We will put your entire written
testimony in the record. You may begin.
STATEMENT OF HOWARD K. KOH, ASSISTANT SECRETARY OF HEALTH,
DEPARTMENT OF HEALTH AND HUMAN SERVICES; ACCOMPANIED BY SANDRA
KWEDER, DEPUTY DIRECTOR, FDA OFFICE OF NEW DRUGS
Mr. Koh. Thank you, Chairman Pitts, Ranking Member Pallone,
and distinguished members of the committee. I am Dr. Howard
Koh, the Assistant Secretary for Health at the U.S. Department
of Health and Human Services. I am very pleased to be joined
here by my colleague, Dr. Sandy Kweder, Deputy Director of the
FDA Office of New Drugs.
As you already heard, the growing problem with drug
shortages is a troubling situation and one that the Department
and the Secretary take very seriously. This growing trend has
the potential to impact on our entire healthcare system, and as
we discuss this problem today, we should always remember that
our goal is to protect the health of people affected most by
these shortages--patients and their families. And I say that as
a physician who has cared for patients for over 30 years.
According to the FDA's Center for Drug Evaluation and
Research (CDER), the number of drug shortages has been rising
steadily over the last 5 years, as you have already heard. And
although shortages can occur with any drug, generic sterile
injectables currently make up a large and increasing share. And
in fact, in 2010, 74 percent of these shortages involved these
older sterile injectable agents. So these include critical
products such as oncology drugs, anesthetics, parenteral
nutrition drugs, and many drugs used in emergency rooms.
There is no single reason why drug shortages occur so
ultimately, in any given situation, many factors are involved
and underlying causes they operate either alone or in
combination to cause a shortage. These factors include but are
not limited to industry consolidation, major issues of quality
and manufacturing challenges, changes to inventory and
distribution practices, difficulty in producing a given drug,
production delays, discontinuations for business reasons,
unanticipated increased demand, and shortages of underlying raw
materials. These are some of the causes, but more importantly,
we the Department are trying to focus now on finding solutions
that protect patients.
In 1999, the FDA formed the drug shortage program within
CDER in an effort to proactively begin monitoring and
mitigating--that is, lessening the impact of--potential and
actual drug shortages. And when the FDA becomes aware of any
potential shortage, it was collaboratively with the affected
firm to return the product to its usual market availability as
quickly and as safely as possible while striving to prevent any
harm to any patient. Although the FDA cannot require firms to
continue production of a product or increase production in
response to a shortage, it does encourage other firms to do so.
FDA also expedites the review of submissions from
manufacturers, which may include request to extend the
expiration date of products, increase capacity, use a new raw
material source, license new manufacturers, and prevent changes
in product specifications. The FDA is committed to working with
drug manufacturers to prevent shortages whenever possible, and
in fact, as a direct result of this commitment and the work of
the FDA drug shortages staff and experts from across the
Agency, last year, 2010, 38 shortages were prevented. And so
far for 2011, this year, I am pleased to report for the first
time that 99 shortages have been prevented.
Also, at the same time, the FDA goes to great lengths to
mitigate shortages--that is, lessening the impact when they
occur. One notable recent example involves the well described
shortage of the drug cytarabine used to treat certain types of
acute leukemia. Crystal formation in the vials of this drug
represented a quality and manufacturing problem that led to a
disruption in production and a shortage that received
tremendous publicity across the Nation within recent months. In
this case, the FDA worked with the manufacturer, found that if
the vials were warm, the crystals would dissolve and the drug
could be then safety administered to the patient, and as a
result of this collaboration, the manufacturer was then
subsequently able to ship the vials to healthcare professions
along with a letter from the FDA notifying them to inspect for
crystal formation, and if present, warm the vials to dissolve
the crystals. And in this way, the collaboration led to
ensuring and upholding patient safety. So as a result of this
work, we can report today that this well reported drug shortage
has been recently resolved.
In limited circumstances, the FDA can allow the temporary
importation of critical drugs when the shortage cannot be
resolved immediately. However, there are several factors that
limit the applicability of this option. The product may already
be in short supply abroad, so importation to the U.S. could
exacerbate the shortage. FDA must also ensure that drugs
imported from abroad are manufactured in facilities that meet
FDA quality standards.
To discuss these and other possible solutions, the FDA will
be hosting a public meeting next Monday, September 26, and this
meeting is being held to gain additional insight about causes
and impact of this challenge and possible strategies for
solutions.
Then on Friday, September 30, the FDA is conducting a
webinar for the general public, and this is an opportunity for
people to learn more about what the FDA is doing to address
this challenge, and it will also be a venue for citizens to ask
questions directly to FDA experts who are working on this topic
every day.
Although I have focused my comments until now on the FDA, I
should stress that the entire Department of Health and Human
Services has been fully engaged on this topic for quite some
time. We view this as a pressing public health challenge, and
we want to resolve this on behalf of the Department and indeed
the entire country.
This past summer, I personally convened a series of
meetings with representatives from FDA; NCI, our National
Cancer Institute; CDC, our Centers for Disease Control and
Prevention; the Office of the Assistant Secretary for
Preparedness and Respondent; the Office to the Assistant
Secretary for Planning of an Evaluation; the Centers for
Medicare and Medicaid Services, CMS; and others. We have joined
together as one department to explore more deeply the root
causes of this problem and the possible steps that can be taken
to address them. These have been productive meetings and we
pledge to continue them until the problem is solved. We look
for as many ways as possible to maximize our efforts within the
Department to protect the public health.
Also, earlier this morning, Secretary Sebelius, along with
other senior leaders in the Department hosted a meeting with
over a dozen representatives from pharmaceutical manufacturers,
professional medical organizations, hospitals, insurance
companies, group-purchasing entities, and patient advocacy
organizations, and this crucial meeting gave us firsthand
insight into these challenges, generated a good discussion with
the stakeholders, and also served as a foundation for our
future collaboration.
Shortly, later on this fall, the FDA will release a report
which reflects an even more detailed analysis of the problem
and updated recommendations for the future. Potential solutions
are being examined. One suggestion is a mechanism for
manufacturers to report impending supply disruptions and
discontinuation of drugs, which could help to curb shortages
and improve the continuity of the drug supply. The sooner the
FDA learns of a drug shortage, the more effective they are
going to be in helping to notify providers and the public and
upholding patients' safety.
So we remain committed to working with all parties--
manufacturers, providers, patient advocates, and other
stakeholders to help minimize and solve this problem. So in
conclusion, the Department is committed to addressing and
solving this critical public health challenge. It is our goal
to advance this dialogue with all interested parties both
internal and external, and we also recognize and deeply respect
the important roles of the Members of Congress, and we welcome
the opportunity to discuss this important topic with you today.
So thank you very much, and Dr. Kweder and I will be very
happy now to take any questions you may have.
[The prepared statement of Mr. Koh follows:]
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Mr. Pitts. The chair thanks the gentleman. Dr. Koh, why
have drug shortages increased so much in the last few years?
Mr. Koh. Well, again, there is no one single reason but
there are changes here that we are seeing in the backdrop of an
economic and business climate that is leading to market
consolidation, a complicated manufacturing process that is
being conducted increasingly in aging facilities that is
leading to quality and manufacturing issues as we have heard
now. Sometimes products are discontinued for business reasons.
Oftentimes the production of any of these agents is a
complicated process. So all these factors converge to create
the issue that we are facing right now.
Mr. Pitts. Have other countries experienced shortages such
as we have?
Mr. Koh. Unfortunately, the United States is not unique in
this situation and yes, we are indeed seeing similar situations
in other countries around the world.
Mr. Pitts. And when a shortage occurs in another developing
country, how is that situation resolved there?
Mr. Koh. Well, we want to learn more from our colleagues
there. I don't know if Dr. Kweder wants to say more about that
particular issue.
Ms. Kweder. We are often contacted by our regulatory
colleagues from other countries looking to collaborate on
finding solutions to particularly when there are worldwide
problems. Different countries have different ways of producing
drug, as assuring production of product, but we work as much as
possible with others to try and make sure that shortages are
limited and mitigated.
Mr. Pitts. Does Europe have a particular method of
resolving this situation?
Ms. Kweder. I believe the method is pretty much similar to
ours, particularly since they have multiple countries. They
seek other sources of supply from other countries.
Mr. Pitts. And do you know what is causing these drug
shortages in these countries in Europe?
Ms. Kweder. Many of them are the same sorts of things. They
are, you know, many of these products are marketed globally.
They are not just in the U.S. The sources of the drug
substances itself, most of them are foreign sources, so if
there is an interruption of a source in the U.S. at a U.S.
plant, if a manufacturer in another country has the same
source, they will be in the same situation and everyone will be
out looking for alternatives at the same time.
Mr. Pitts. OK. Dr. Kweder, what specific steps has the FDA
taken to prevent or alleviate drug shortages?
Ms. Kweder. First, we tend to learn in terms of preventing
drug shortages. When companies let us know that they are
experiencing a problem, it is usually a problem in production.
Sometimes it is a business decision to discontinue a product.
When they inform us in advance that that is the case, we work
very closely with them to understand the problem and assess
whether this shortage would be something that would be critical
for patients.
So, for example, if a company is making a product that 20
other companies make, that is not likely to be a critical
public health situation. But particularly for these sterile
injectables, that is usually not the case. So we will work with
a company to help them develop solutions to fix the problem and
avoid an interruption in production. That is not always
possible. It is just simply not always possible.
When it is not possible and it looks like the company may
have to interrupt production, we go to other manufacturers and
we talk to them about their capacity to increase their
production. They usually can't turn that around on a dime, but
we work with them to facilitate ramping up in order to supply
the market with usual sources.
In the original company that is having a problem, we have a
number of tools in our kit that we can use to help them address
the problem. Dr. Koh gave you an example of the kinds of things
that we can do in some cases, you know, to look at the end
product itself if there is a problem with the end product
itself. In that case it was crystallization of the actual
active drug. And we worked with the company. They got right on
the case to figure out why those crystals were forming, what
could be done to mitigate that, inform providers, and since
then, the crystal problem has been fixed.
Mr. Pitts. Do you feel you need earlier warning than you
currently have?
Ms. Kweder. We can always use earlier notification. There
certainly are circumstances where things happen very, very
unexpectedly. But the majority of cases of shortages, we could
have been notified, and in the majority of cases, we are not
notified in advance. It is getting better. I will say it is
getting better, but we still have a large percentage of actual
shortages where we were not aware that it was coming.
Mr. Pitts. Thank you. My time has expired.
The chair recognizes the ranking member, Mr. Pallone, for 5
minutes for questions.
Mr. Pallone. Thank you, Mr. Chairman. I would like to
initially ask unanimous consent to enter into the record the
testimony of the National Coalition for Cancer Research. I
think you have a copy of it.
Mr. Pitts. Without objection, so ordered.
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Mr. Pallone. Thank you, Mr. Chairman.
Dr. Koh, we all agree that drug shortages are a real
problem facing the country and from what I understand, it is
actually getting worse. But I guess it is hard to figure out,
at least for me, what the cause is and I would like to ask some
questions about the root cause of the problem.
The FDA has said that in 2010, last year, over half of the
shortages were due to manufacturing and product-quality issues,
and I understand I think you mentioned that many or a majority
of those are sterile injectable drugs. Why would these drugs be
prone to manufacturing and product-quality issues in
particular?
Mr. Koh. Well, many of these products are the result of a
long production process, and those production processes are now
occurring in fewer manufacturing sites because of industry
consolidation. There is also aging of the facilities where this
work is ongoing. There are business and economic factors in the
background that are lowering the profit margin. So oftentimes,
businesses will make a decision to perhaps discontinue a
particular product for business reasons, and as a result, we
are seeing the quality in manufacturing issues, Congressman,
that you are referring to.
Some of these quality issues are quite disturbing where we
literally are tracking products that have particulate matter,
even pieces of glass and pieces of metal in what should be
sterile products that are injected into patients. So this is
the reason why the FDA continues to uphold this mission of safe
and effective drugs, also high-quality drugs in the middle of
this challenging environment.
Mr. Pallone. Now, Teva is on the next panel, but in their
written testimony, they state that it takes 2 or 3 years to get
FDA approval for a new supplier for ingredients or an
alternative manufacturing site. Is that really true? Does it
really take 2 or 3 years to get the FDA approval? And why would
that be if it is true? And does it take that long if there is a
drug shortage issue involved?
Mr. Koh. Well, let me start, and I am sure Dr. Kweder can
add. One of the advances of the FDA in this situation is to
prioritize generic drug applications, expedite and accelerate
approval in every way possible, particularly if the public
health is threatened. So there are efforts to try to advance
that time frame. That is also the goal of the Generic Drug User
Fee Act, which is under review right now. So these are issues
that are very important to the FDA and they take it seriously.
Mr. Pallone. But I mean is that time period that Teva
mentioned, would that generally be true and is there any kind
of flexibility that you have to expedite review and inspections
of new facilities so they could address the shortage when it
exists?
Ms. Kweder. There absolutely is flexibility, and we do that
routinely when we are aware that, say, a new facility is needed
or a new supplier is needed and when there is a circumstance
that might lead to a potential shortage of an important medical
product. We do it routinely. We can often turn things around in
a matter of weeks.
Mr. Pallone. But I mean you haven't answered that 2- or 3-
year time span.
Ms. Kweder. Sure, I would be happy to do that. The 2- or 3-
year time span is what is being referred to under usual
conditions when there is not a shortage situation or not a
shortage situation pending.
Mr. Pallone. But if there is, then you deal with it
quicker?
Ms. Kweder. Absolutely. But even the 2- to 3-year time
frame, as Dr. Koh said, we are working and we are happy to see
that there has been agreement on generic user fees that will
change that and make that a matter of months and not years.
Mr. Pallone. I mean my concern is, you know, we face these
extraordinary fiscal pressures. The House passed budget for FDA
contained a 21 percent cut in appropriated funds. I mean is
this cut, would that adversely affect your ability to work with
companies to avoid or mitigate shortages? And, you know, I know
you mentioned generics. Are you negotiating with the generic
industry to develop a user fee and can that help prevent or
alleviate drug shortages? This is about the funding now.
Ms. Kweder. We are negotiating and have reached agreement
with the generic industry about user fees. And that will be
coming up for discussion by yourself, you know, within the next
year.
Mr. Pallone. And what about this House budget cut, the 21
percent?
Ms. Kweder. There is no question that resources matter and
these are not automated processes. They take people with
judgment and knowledge and having enough people makes a big
difference.
Mr. Pallone. All right. Thank you very much.
Thank you, Mr. Chairman.
Mr. Pitts. The chair thanks the gentleman.
And I would like to request the following statements be
entered into the record. I think you have copies. The statement
of the National Community Pharmacist Association, the letter
from the American Society for Hematology to the House Energy
and Commerce Subcommittee on Health, and the statement of the
Generic Pharmaceutical Association.
Mr. Pallone. I have no objection, no.
Mr. Pitts. Without objection, so ordered.
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Mr. Pitts. I recognize this time the gentleman from
Illinois, Mr. Shimkus, for 5 minutes.
Mr. Shimkus. Thank you, Mr. Chairman.
I think all would agree that resources matter in this tough
fiscal period, as the ranking member said. I think also part of
our issue would be prioritization, especially in life-saving
issues and what are agencies doing to put first things first
and what can they do obviously redirect funds in a different
direction.
For Dr. Koh, going in line with my opening statement, how
have cost and payment factors impacted these drug shortages?
Mr. Koh. Well, again, this is an industry that is producing
products in an environment where they are facing increasing
economic pressures. The profit margin for any particular agent
is declining for them, so they have to make business decisions
but also keep their products moving until the decision is made,
perhaps to discontinue a product. On the quality manufacturing
issues and possibly delay issues and what is often a
complicated production process, it just all contributes to the
situation that we are seeing now.
Mr. Shimkus. And who are the big payers?
Mr. Koh. Well, there is a process where purchasers--
hospitals and physicians and providers--buy these products but
there are also group-purchasing organizations and pharmacy
benefit managers who are trying to drive down the price for
understandable business reasons. So these are all the
stakeholders who are involved in the purchasing chain.
Mr. Shimkus. And I do appreciate your opening testimony
because we had a series of questions and really you answered
them in your opening statement. And I am just going to
highlight one of the things was a question we were going to ask
was closely collaborating and you gave the example of the drug
with the crystallization, and I thought that was very helpful.
The other issue I was going to focus on was alternative
sponsors, and that is where you talked about maybe temporary
easing import restrictions or importation or--I can't even read
my writing--temporarily doing something else. But you said that
is constrained based upon if there is a shortage overseas of
the same product, and something that we have talked about over
the past years with Ranking Member Dingell is the ability to
make sure that the drugs that we are importing are inspected by
our inspectors so we know the efficacy and safety of that.
I have always been a risk-based person on the focus point
of saying that those that are more questionable facilities
ought to get a lot of look. If they have been operating safely
and they have inspected like a U.S. facility every year, then
it might make that you could go every 2 years or maybe every 18
months. And that is the whole issue of shifting sources, too,
to the more critical elements and safety versus known products
and industries that you all have real confidence in. We want to
expect you to do that in industries that have a poor record,
but those that you have really good confidence in, that is the
funding issue.
You also mentioned, you know, business reasons and aging
facilities and I think you mentioned increased regulations. Is
that part of your testimony?
Mr. Koh. Well, the quality standards that the FDA puts
forward in areas like this have been unchanged for the last 4
decades. And in fact the FDA has really gone the extra mile in
my view to show tremendous regulatory flexibility here. So
again, since we can't require any manufacturer to do much of
anything, all we can ask is for information, communication,
collaboration, and then the FDA shows maximum regulatory
flexibility. This re-warming of the cytarabine that I mentioned
to you is one example of filtering out particular matter so
again these medications can be used and not put aside is
another example.
Mr. Shimkus. Yes, I only have 12 seconds----
Mr. Koh. Sure.
Mr. Shimkus [continuing]. I will go back to the testimony--
--
Mr. Koh. Um-hum.
Mr. Shimkus [continuing]. Because I did scribble a note a
comment on increased regs, and I will have to go back and look
at that. But why doesn't the shortage of a product in this
sector then send an increased price signal to manufacturers for
them to then produce the good?
Mr. Koh. Well, we have come to learn that the standard
economic principles of supply and demand----
Mr. Shimkus. And the question is why is that distorted? I
think that is the basic fundamental question of this problem.
What has distorted the fundamental principle of supply and
demand, and my time has expired, but I think that is the heart
of this issue. I yield back my time.
Mr. Koh. Sure. And I am sure Dr. Kweder can add, too. First
of all, these agreements are made often through these long-term
contracts and so also this whole process involves multiple
stakeholders, especially and including the pharmacy benefit
managers and the group purchasing organizations. So it
complicates this environment and sort of does not make relevant
the sort of standard supply and demand economic principles that
we see in other businesses.
Mr. Pitts. Dr. Kweder?
Ms. Kweder. You have said what I would say. Thank you.
Mr. Pitts. The chair thanks the gentleman and recognizes
the gentlelady from Illinois, Ms. Schakowsky, for 5 minutes for
questions.
Ms. Schakowsky. Thank you, Mr. Chairman.
I, too, am sponsor of the DeGette legislation that would
ask for early notification. I just wanted to mention we
actually have a Chicago-based injectable drug company Hospira
that has endorsed the bill and they already do many of the
things including proactively reporting to the FDA about
potential drug shortages.
You have explained, Dr. Koh and Dr. Kweder, the advantage
of that early notification. Let me just raise a question that
some have raised. Early warning could exacerbate the problem
and lead to hoarding of critical drugs. Is this anything we
need to watch out for, account for? I mean I am hoping that
that is not the result of this legislation, obviously, which I
support. Have you heard of that?
Ms. Kweder. I will respond to that question. When we are
notified of a potential shortage, we do not automatically turn
around and put that on our Web site and notify the public of a
potential shortage, which would have the opposite effect of
what we want. We judge very carefully when is the right time to
make a public announcement about a potential shortage. First,
we assess what are we talking about? Is this a true product
shortage or is it an imbalance in distribution? Because
sometimes you see things that seem to be in shortage in one
part of the country but there is plenty of it and more so in
another part.
So we take that potential for making things worse very,
very seriously. We meanwhile are working on it to assess it and
assess what we might do to mitigate it if it is real. If it is
real, we usually announce the fact that it exists and try to
let the public know what we are doing to try to address it.
Ms. Schakowsky. So early notification, then, is something
that is a very useful tool?
Ms. Kweder. Right, early notification to FDA is a very
useful tool. We see that as different than early publication.
Ms. Schakowsky. Got it. Let me ask you this. The FDA has
limited authorities. Let me run through some of those. At this
point you can't require manufacturers to do this early
notification, you have no authority to require companies to
increase production of a drug during a shortage, you can't
impose an allocation plan when a shortage causes life-
threatening conditions, and FDA has limited ability to post
timely information on its Web site for healthcare professionals
and patients regarding reasons for shortages and timelines for
resolution. I don't really understand that one. But in addition
to early notification, are there other authorities that you
need that would help mitigate this problem?
Ms. Kweder. I think there are 2 things. One, in the early
notification is something that helps us in the mitigation and
prevention greatly. What we need to be able to do is we need to
be able to have the industry assure that they are making a
quality product and upholding their responsibility to produce
high-quality products where these things won't happen. Our goal
is to prevent even the potential for a shortage from occurring,
not always possible.
In the case of many of these threatened and real shortages,
as Dr. Koh said, these are in plants that manufacture multiple,
multiple products. If you look at the record, the things that
led to the actual problem with production are things that we
have been telling the companies about in routine inspections
for years but only became critical in order that they needed to
address these, modernize, so that they could continue producing
quality product without a glitch.
So that is first and foremost from our standpoint, assuring
that we are aware so that we can step in and use every possible
communication tool and flexibility and regulatory action.
Ms. Schakowsky. Let me just ask you to what extent is the
issue of business decisions--what percent of those cases where
we have shortages would you say this is a business decision?
Ms. Kweder. You know, I can't give you an exact percentage.
I will be happy to provide that follow up.
Ms. Schakowsky. Is it a major issue and is there anything
that we can do about that?
Ms. Kweder. I would say that it is not. That is not the
major issue.
Ms. Schakowsky. OK.
Ms. Kweder. I would say by far and away the more common
scenario has something to do with manufacturing and product
quality.
Ms. Schakowsky. Thanks you. Thanks to both of you for being
here.
Mr. Koh. Thank you.
Mr. Pitts. The chair thanks the gentlelady and recognizes
the gentlemen from Kentucky for 5 minutes for questioning.
Mr. Guthrie. Thank you for being here. I am just going to
follow up a little bit on Congressman Shimkus. I mean you
answered a lot of the questions in your opening testimony. But
I had a group of oncologists in the other day. These aren't
people that make drugs, they aren't people that sell drugs,
people that--FDA issues or whatever you want to--these are guys
just are taking care of patients, and they say they literally
have to make choices about who they take care of because they
don't have the drugs available. So I ask kind of the questions,
say, well, I can't believe a company won't make them if you
have the demand for them. And they told me that this particular
type of drugs, the generic are priced different in the Federal
Government. So the Medicare actually prices these different
than other drugs. Was that what they were saying was true?
Mr. Koh. Well, I can start with that. And first of all,
Congressman, thank you again for your attention to the patient.
This is a dire situation for patients and I have actually
trained in cancer as well as other fields so this is very
personally and professionally important to me.
We have a rule of Medicare here that reimburses according
what is called the average sales price, so that is one factor
here, but we don't view that as a significant issue in driving
the shortages that we are seeing here.
Mr. Guthrie. But these generics are a different system than
others because what we are seeing is you mentioned that
pharmacy benefit managers, all these are driving down drug
costs where they are doing it, you know, a pharmacy benefit
manager is trying to do all drug costs.
Mr. Koh. Sure.
Mr. Guthrie. But we seem to see this particular class of
drugs having a bigger problem than others and the only thing
that I can see that is different is the way the Federal
Government treats them. They treat them different than other
drugs.
Ms. Kweder. I am not sure I can answer your question but
these are generic drugs. They are off patent for the most part.
You know, there are some that--so they are at a point in time
where the profit margin for the drugs--generally because they
are generic and you can have multiple manufacturers--is lower.
Mr. Guthrie. Right.
Ms. Kweder. And it wouldn't be just--you mentioned
Medicare, CMS, but there are many other group purchasers--some
of them are government-related, others are private insurance
companies that are negotiating in bulk basically of prices. And
they are no different than what the Federal Government does. It
is the same.
Mr. Guthrie. But why isn't that happening in other
classes--I mean this seems to be particularly more than others.
Ms. Kweder. Well, in the other classes, in the non-generic
world, there is one source.
Mr. Guthrie. Um-hum.
Ms. Kweder. And so they are in a great bargaining position
because they are a sole source, the innovator product, they
have a patent.
Mr. Guthrie. But there is a different system for generic
drugs in Medicare than----
Ms. Kweder. They tend to be priced lower.
Mr. Guthrie. Priced lower?
Ms. Kweder. Absolutely. And that, of course, is the access
point for the public.
Mr. Guthrie. Right, if you have lower costs, which we all
want to drive lower costs, believe me. We are all trying to
save--but you have lower cost, then you get less supply as you
are saying because the prices are obviously lower and you have
less quality of people producing. And so according to the
oncologists there is not a mechanism where if just you pay just
a little bit more, you are going to get the drug that is going
to take care of--you know, there is not a price mechanism to
say we have got a low supply that Congressman Shimkus is
talking about. Therefore, if we can adjust the price, we get
the supply that we need to take care of patients.
Mr. Koh. Well, the situation is summarized by Dr. Kweder,
but Congressman, I think you were raising some interesting
points where we can get you more information----
Mr. Guthrie. OK.
Mr. Koh [continuing]. And work with you.
Mr. Guthrie. Because whatever we can do--I mean the things
that you mentioned, business decisions, that is all part of the
mix but there are some things we can do from this side.
Mr. Koh. Thank you.
Mr. Guthrie. And one other thing just quickly on the FDA,
the 2 to 3 years you said, now you have got the flexible teams,
is that relatively new? Because after these oncologists said
this I reached out to some people and they did talk about some
issues with inspection and inspection time like Congressman
Shimkus. So it is being addressed----
Ms. Kweder. Absolutely, it is being addressed. It
absolutely is being addressed.
Mr. Guthrie. OK. Maybe just hear from the ones who have the
worst experiences I guess but that is good because I know with
your physicians and the oncologists I met, you take care of
patients, so I appreciate your attitude in moving forward to do
so.
So thank you and I yield back.
Mr. Pitts. The chair thanks the gentleman and now
recognizes the ranking member emeritus of the full committee,
the gentleman from Michigan, Mr. Dingell, for 5 minutes for
questions.
Mr. Dingell. Mr. Chairman, thank you for your courtesy and
thank you for holding this hearing.
Let me begin by asking this question yes or no. Do you have
authority at FDA or at HHS to waive any of the requirements
with regard to efficacy, good manufacturing practices, or
safety, yes or no, in the event of shortage?
Ms. Kweder. Yes.
Mr. Dingell. You do have it?
Ms. Kweder. We have the authority to use flexibility in how
we implement the regulations.
Mr. Dingell. OK.
Ms. Kweder. Regulatory discretion.
Mr. Dingell. I would like to have a further answer on that
particular point.
Ms. Kweder. But the requirements are the same. How one
reaches them is flexible.
Mr. Dingell. OK. I would like to have further statement on
that for the record so we can understand what your authority
there is.
It is my understanding that the FDA has been working to
address shortages of medically necessary drugs. Can you please
define what medically necessary means, please?
Mr. Koh. Medically necessary is defined as a product used
to treat or prevent a serious disease or condition for which
there is no other product available to act as a substitute.
Mr. Dingell. I believe you have indicated in your testimony
that the vast majority of shortages experienced in the United
States is attributable to sterile injectables. Is that correct?
Mr. Koh. Yes, sir, that is correct.
Mr. Dingell. And according to your testimony, the majority,
some 54 percent of these shortages were due to ``product
quality issues such as particulates, microbial contamination,
impurities, stability changes resulting in crystallization.''
Is that right?
Mr. Koh. That is right, Congressman.
Mr. Dingell. Were you finding those in American
pharmaceuticals or imports?
Mr. Koh. We were finding them here in the United States.
Mr. Dingell. What about imports?
Mr. Koh. Well, those are exactly issues we try to prevent
which is why importing is always a challenging issue. In fact--
--
Mr. Dingell. Yes, but you have really no authority to
address the question of the manufacturing practices abroad. You
have no real authority to deal with good manufacturing
practices. You have no real authority to see to it that the
requirements that are imposed on American manufacturers for
safety, efficacy are there, and you have very little power to
effectively inspect those foreign manufacturers either of
finished pharmaceutical products or components and
constituents, right?
Mr. Koh. That is correct, Congressman.
Mr. Dingell. And you have no ability, really, to know who
is manufacturing these things or to trace them through the
product line, is that right?
Mr. Koh. That is right. That is why the importation process
is done very carefully and selectively.
Mr. Dingell. I have got some legislation to address that
and I hope that we will be shortly addressing it here in this
committee.
I have a bill, as I mentioned, where we address the problem
of quality problems in drug manufacturing process by requiring
the drug manufacturers implementing effective quality system
that complies with GMP. The quality system would also be
required to ensure risk management procedures that would
address all relevant factors through the supply chain,
including original source materials and their origin, onsite
audits, and methods to detect or include potentially risky
substances. Manufacturers would also have to maintain records
and establish that the drug was manufactured and distributed
under conditions that ensured its identity, strength, quality,
and purity. Would legislation of this kind help you address
quality issues?
Mr. Koh. Yes, tracking quality every step of the way would
certainly uphold patient safety.
Mr. Dingell. This is a matter on which I have worked with
the gentleman, my colleague Mr. Shimkus. Now, it has been
widely reported that when information becomes public about a
drug shortage, an active gray market tries to sell drugs in
short supplies to pharmacists or hospitals. Does this present a
safety concern?
Mr. Koh. Yes, it does, Congressman.
Mr. Dingell. Why and how and what can you do about it?
Mr. Koh. Well, this is largely unregulated. The Federal
Trade Commission is involved to some degree but unfortunately--
--
Mr. Dingell. They don't have the expertise that you have
and would you submit to us a proper answer informing me what we
have to do to address that particular problem?
Mr. Koh. I would be happy to do that, um-hum.
Mr. Dingell. Now, when drugs are purchased in the gray
market, do we know if these drugs have been stored properly to
ensure effectiveness, whether the drugs have been diluted, or
whether the drugs are free of filth contaminants or
adulterates? Yes or no?
Mr. Koh. No. Unfortunately, we know very little about the
products in the gray market.
Mr. Dingell. Now, as I mentioned, I have a bill that would
require manufacturers to maintain records establishing where
the drug and its raw materials were produced, including all
information relative to producers, manufacturers, distributors,
and importers. Would such legislation and such power assist
Food and Drug in assuring the safety of these kinds of
pharmaceuticals? Yes or no?
Mr. Koh. Yes, we want to uphold the safety and quality, so
thank you for that.
Mr. Dingell. At the end of the day, American consumers and
patients are facing 3 problems: 1) the drugs, they need to be
available and affordable; 2) are there drugs they need safe;
and 3) are they efficacious? Do they work?
I believe the committee needs to examine these issues
carefully and swiftly. Our colleagues in the Senate, Mr. Harkin
and Mr. Enzi have already called on Food and Drug to improve
its oversight of the pharmaceutical supply chain. I would hope
this committee would follow suit, but I would like to have you
give us a statement of what authorities you need to adequately
carry that out. I don't believe that sending you a letter
asking you to do something for which you have no authority
works. Would you submit, please, for the record because my time
is up what it is that has to be done to give you the authority
to address those problems?
Mr. Koh. I would be happy to, Congressman. Thank you.
Mr. Dingell. Thank you. Mr. Chairman, I thank you for your
courtesy. I ask unanimous consent that the responses be
inserted in the record upon receipt?
Mr. Pitts. Without objection, so ordered.
Mr. Dingell. Thank you.
Mr. Pitts. The chair thanks the gentleman and recognizes
the gentleman from Louisiana, Dr. Cassidy, for 5 minutes for
questions.
Mr. Cassidy. Hello. Thank you.
Now, you do have the ability to import from overseas
obviously, and there were issues raised regarding adequacy of
quality control if you will. We think of Hepburn from China
causing many deaths, correct? One of the issues that was raised
here in a previous hearing was that the inspectors, as part of
their union contract, can refuse to go overseas. And so I think
Mr. Pallone spoke about inadequate resources, but the issue was
that here there was enough money to inspect or a requirement to
inspect a pharmaceutical every 2 years and there is happening
only every 9, and when I ask could we just redirect resources
to send that person over to maybe alleviate some of these by
expanding importation, the point was that the unions would not
allow this to occur. They had the right to refuse the overseas
assignment. Is that true and to what extent is that limiting
our ability to approve the APIs--I forget the acronym but you
know what I am speaking of.
Ms. Kweder. In the terms of a shortage situation, that has
not been a big issue. For the most part, when we have a
circumstance where some inspection activity is necessary in
order to prevent a drug shortage, we find that our staff are
extremely cooperative and willing to roll up their sleeves and
step in. We are addressing the issue of our inspection force
more broadly in parallel to this, but it has not been a
critical issue in mitigating or preventing drug shortages.
Mr. Cassidy. But there are a heck of a lot of generics
being manufactured in India and other Third World countries so
are they just not producing the ones that we are in short
supply of or are we just not confident of the quality of the
product which they produce?
Ms. Kweder. I am not sure I understand your question.
Mr. Cassidy. So is there a worldwide supply of drugs that
are currently in shortage here? It is just that we are not
trusting the manufacturing process by which they are produced
and therefore do not allow their importation?
Ms. Kweder. I would say the lack of allowance to import a
product has been unusual. If there is a foreign source, we are
usually able to work through and get it approved. There have
certainly been circumstances where there have been important
problems that would prevent that, but in most cases if there is
a foreign source and going to a foreign source is necessary, we
are able to work through that.
Mr. Cassidy. OK. In the gentleman who is going to testify
from Teva, he speaks about how DEA has a quota for controlled
products and that if somebody goes out of business, that quota
might not necessarily be assigned to another manufacturer, and
so you have a kind of centrally planned economy-induced
shortage. Any comment on that and any way we can address that?
Mr. Koh. I can start. I know that controlled substances
represent only a very small part of the drug shortage situation
that we are talking about, so we do work with DEA but it is
limited only to several instances. And Dr. Kweder might add
more.
Ms. Kweder. And it is more complicated having the DEA
involved for obviously good reasons. It does create an
additional step and complicates this, but we work closely with
the DEA when a controlled substance shortage is at issue.
Mr. Cassidy. And I understand that but is there any plans
to make it so that if somebody stops producing their quota it
is transferred to someone who would? Because I gather that is
not the situation now. And although we are working closely,
that is an obvious solution that I am not sure is being
implemented from your statement.
Ms. Kweder. We are continuing to try and figure out how to
expedite these kinds of issues with DEA. And I don't have an
answer for you about exactly when that will be resolved, but we
are committed to doing it, as are they.
Mr. Cassidy. OK. Teva also mentioned--just because I, you
know, I like to read what the other panels say so I refer to
this--that the ``speaking of a source or an active
pharmaceutical ingredient,'' they say that the qualification
process to identify a supplier for such can be very onerous,
the qualifying gain after you get approval for a new API
supplier or alternative manufacturing site for an already-
approved supplier can take as long as 2 to 3 years. Now, I am
channeling my inner Teva wherever Teva is. You don't have to
testify anymore, but what would be your response to that?
Mr. Koh. Again, these are areas where we are trying to show
as much regulatory flexibility as possible to accelerate
approvals when necessary. So we often address these themes
through the maximum flexibility possible.
Ms. Kweder. And we already do. Whenever there is an issue
related to a supplier where it requires FDA to approve a new
supplier or even a new facility, I think that was one of the
other concerns. We turn those around very, very quickly.
Mr. Cassidy. What would----
Ms. Kweder. In a matter of weeks to months. These are not
business as usual where there is a long wait time. We
understand that patients are at the end of this line and we
need to do everything possible to get on the case and work with
the companies. And we have done that with Teva.
Mr. Cassidy. OK. I yield back. Thank you.
Mr. Pitts. The chair thanks the gentleman and recognizes
the gentleman from Utah, Mr. Matheson, for 5 minutes for
questions.
Mr. Matheson. Thank you, Mr. Chairman. I appreciate your
yielding time to me and I appreciate you holding this hearing.
I think we have established the problem. I am sure lots of
people have talked about circumstances in their district. I
represent the University of Utah. They project more than 360
products having shortages and that many products by the end of
this year. And I was at the Huntsman Cancer Institute just 2
weeks ago and they were talking to me about the challenges they
are facing. So I guess everybody up here has a story, but I
thought I would tell you it is in my backyard as well.
I was wondering if you could address for me some of the
concerns about gray market activity as a result of these drug
shortages and the integrity of what is out there, the quality
of the medications if they are counterfeit or how we can
address some of these challenges of a gray market when these
medications have shortages.
Mr. Koh. Well, I can start. And first of all, thank you,
Congressman, for your commitment to research. We didn't say
explicitly but we can say now that this drug shortage issue is
dramatically affecting clinical trials as well in cancer and
infectious disease in many parts of NIH, so that is very, very
troubling to us as a Nation that prizes scientific advances.
The gray market, unfortunately, is very poorly understood
and, as we have mentioned already, it is largely unregulated.
And to have now this dimension complicating an already
complicated situation is very disturbing. So we appreciate your
attention to that and we want to address that as well as all
the other factors that are involved here.
Mr. Matheson. Are there actions we should be taking on
addressing the gray market specifically or should we really
just be addressing on the underlying problem of the shortage of
these medications? Is that the more valuable way to address--
that would eliminate the gray market problem I guess if we
don't have shortages?
Ms. Kweder. One of the questions that was asked previously
was about what we know about the products that appear on this
gray market.
Mr. Matheson. Right.
Ms. Kweder. Do we understand when they expired, where they
came from, and are they made by the company that is
experiencing the shortage or are they counterfeit products? We
don't because we don't have a tracking system within the drug
supply to know what product comes from where.
Mr. Matheson. I appreciate that. I will do my 30-second
advertisement. I just introduced with Mr. Bilbray this week our
track and trace legislation, pedigree legislation for
maintaining the integrity of the drug supply in this country.
We are operating on rules that were created in 1988 and the
world has changed. I don't think this is going to be on the
topic of this hearing, but there is just too much money on the
table for the counterfeiters in terms of the U.S.
pharmaceutical marketplace, and I hope this committee can take
a look at this legislation Mr. Bilbray and I have introduced
because I do think it is an important safety factor for the
integrity of our supply in general.
I appreciate your coming here for this hearing. Mr.
Chairman, I yield back.
Mr. Pitts. The chair thanks the gentleman and recognizes
the gentlelady from Tennessee, Mrs. Blackburn, for 5 minutes
for questions.
Mrs. Blackburn. I want to thank our witnesses for being
here, and as you know, some of us arrived a little bit late. We
did have the Solyndra oversight hearing going on downstairs, so
we completed that one before coming up. But we are grateful
that you are here and our second panel of witnesses we are also
looking forward to. And I am glad we have a Tennessean on that
panel who will be joining us.
Just a couple of questions. As you can see, we are going to
look at how we address this issue and having you here helps to
inform our decision-making process. So a couple of things I
would like know, and if you don't have the answer for me,
please submit it to us so that we can include it in our record.
I wanted to see if each of you had any examples where you
had worked closely and collaboratively with your agencies with
manufacturers' drugs where there was a known or a projected
shortage and see if you could articulate what that process was,
the interface that transpired there. And if you have those
examples, ma'am, please go ahead and give them, and if not, we
will accept those in writing.
Mr. Koh. So Congresswoman, I can repeat the example that we
are very proud to share actually here for the first time that
had to do with cytarabine, which is a----
Mrs. Blackburn. OK.
Mr. Koh [continuing]. Lifesaving drug used for acute
leukemia. And this shortage received tremendous national
publicity and represented a dire challenge for cancer patients.
And so when the FDA worked with the industry on this particular
drug, they found that one of the issues complicating the
production was the crystallization of the drug in the solution
and that re-warming it would restore the safety features that
would allow infusion into patients. So with that collaboration
between the FDA and industry, that issue has now been recently
resolved and we are very, very pleased to report that. And I
know my colleague has other examples.
Ms. Kweder. I actually would like to expand on that one----
Mr. Koh. OK.
Ms. Kweder [continuing]. Because before the issue of the
crystals in the vials, where the cytarabine shortage began was
it was being made by 3 companies but the majority of the supply
was being made by one firm. They were experiencing significant
production delays, so what FDA did was we contacted the other
manufacturers to work with them to increase their production in
order to be able to supply the market. In the course of them
increasing their production and trying to produce product
rapidly, the crystallization occurred in both facilities. So
that preceded the crystals. We then resolved that activity as
well. So in that case, we also, when there was concern about
whether we would find a solution to the crystallization, we
also investigated alternative manufacturers, whether there were
any overseas. We were not able to identify any alternative
manufacturers. They were all U.S. firms.
Mrs. Blackburn. Let me interject there. Do you have
examples other than this one? Are there examples where you
worked with some of those alternative manufacturers and brought
them into the fold, and then once you identify that there is a
near-shortage that is approaching, do you think that there is a
way through the production process or the compensation model to
provide incentives so that you have a more predictable supply?
Mr. Koh. Well, another example that we can provide for you,
Congresswoman, has to do with purple fall, which is an agent
that is used in anesthesia. And when those shortages started
occurred, the FDA could facilitate temporary importation of a
substitute agent to help ameliorate that situation. So that is
yet another example and I know the FDA has many others. The
economic issues here are so complex that offering any economic
solution requires first a careful analysis. And we are trying
to do more of that, especially through our assistant secretary
for planning an evaluation and we hope we can come out with
some more definitive recommendations for you in that area in
the near future.
Mrs. Blackburn. Thank you. We appreciate that, and in the
interest of time, I will yield back.
Mr. Pitts. The chair thanks the gentlelady and recognizes
the gentlelady, Mrs. Myrick, for 5 minutes for questions.
Mrs. Myrick. Thank you, Mr. Chairman. And thank you all,
all of our witnesses for being here. I was also at another
hearing so I am sorry I missed your testimony and some of the
questions.
Like everybody else, our area is experiencing the same
problems and our doctors, we meet with them constantly. But
particularly in anesthesiology and oncology as you well know,
we have the problems. And it is scary from the standpoint of
what could happen with somebody if they are given another drug
that really doesn't either work or they, you know, have a
reaction to it or something. And thank you very much for any
efforts in trying to get to the bottom of it.
And I wanted to ask if really the consolidation has taken
place in the drug industry over the last few years and
continues to place, you know, what effect or how does that
contribute to the problem that we are seeing today? I mean is
this a large contributing factor because of fewer manufacturers
available?
Mr. Koh. Thank you, Congresswoman, for your interest and
support. And yes, we view industry consolidation as one of the
driving causes here, and as you can imagine if you are a
denominator of or a manufacturer shrinks and then any one of
them has a manufacturing problem or delay, it really puts the
onus on the others, and if the others don't happen to produce
that product and if this particular company is a sole source
producer, then you have the number of occasions that we are
seeing right now. So there is no doubt that industry
consolidation has contributed to this.
Mrs. Myrick. So what if any recommendations do you have of
how we get over this hump? Because, you know, you mentioned the
generics which we are all very much aware of and the fact that
are just as popular to do because of the cost factors and other
things that have entered into it. I mean what is it that you
think we should be doing or looking at to try and get to the
bottom of how we can help with this.
Mr. Koh. Well, we again want to stress the importance of
communication and early notification because that will help all
parties to work together. And as the number of industries
involve shrinks, we want to really maximize our communication
with those manufacturers, and we are doing so as we speak. And
then as Dr. Kweder mentioned, we also want to have more
assurances that the products that are being produced have high
quality so that we don't run into these quality and
manufacturing issues. So those are 2 things that would be very
helpful to us.
Mrs. Myrick. And you find the companies work well with you?
Mr. Koh. We have had excellent dialogue to date and I want
to do much more of that, not just the FDA but the entire
department and also engage the public in this as you have
heard.
Mrs. Myrick. Thank you. I will yield back, Mr. Chairman.
Mr. Pitts. The chair thanks the gentlelady and recognizes
the gentleman from Pennsylvania, Dr. Murphy, for 5 minutes for
questions.
Mr. Murphy. Thank you. And I thank this distinguished panel
and we appreciate your concern for our citizens of this
country.
A couple areas here. Are you meeting with the
manufacturers? I want to ask a couple questions to find out
here with regard to what are some of the causes of this drug
shortage. You laid out a number of these things very well,
thank you. But let us say, for example, cancer drugs. Why the
shortages with cancer drugs? We know they are very expensive in
many cases. What specifically is the reason for that?
Mr. Koh. Well, it is very distressing, Congressman, some of
these time-honored lifesaving medications now being caught in
the middle of this public health crisis and some of the agents
we have mentioned here, cytarabine, vincristine, bleomycin,
time-honored agents that have been shown to be effective for
decades are now stuck in these shortages. So again these are
older generic sterile injectable drugs that are typical of the
ones that are being----
Mr. Murphy. But can I ask specific things. Do we not have
enough manufacturers, for example, working on these things? Is
that part of the problem?
Mr. Koh. That is part of the problem, again, because the
industry has consolidated and so we don't have the dozens and
dozens----
Mr. Murphy. Of those who are there, are they not working at
capacity? Do we know if that is an issue?
Mr. Koh. I am not sure I can address that directly.
Ms. Kweder. I think that what often happens in a lot of
these companies, they make dozens of products.
Mr. Murphy. Um-hum.
Ms. Kweder. These sterile injectables can only be made in
certain types of facilities so there are a limited number of
those. And because of the market and the few number of
producers, there is pressure to produce and continually
produce. And so maintenance of the facilities themselves is
often put off because it requires an investment on these low
profit margin----
Mr. Murphy. They are expensive, the low profit margins?
Ms. Kweder. Right. Some of them are not terribly expensive
but low profit margin. So there is----
Mr. Murphy. That is important what you just said. So this
is one of the concerns we have. Certainly, we want medications
to be affordable. I mean why window shop when you can't afford,
but in our push to make sure that drugs are affordable, are we
also tripping over ourselves? It is hurting the patients when
we say we want there to be such a low profit margin that it
ends up backfiring and we don't end up with the medications
that save lives? Is that part of our policy that is getting
away for us?
Mr. Koh. Well, thank you for posing those questions and
obviously ultimately our goal is to protect the patient and
give timely delivery of a lifesaving medication----
Mr. Murphy. And even if you don't have the information
today, is that something you could advise us on? I am looking
for anything politics aside. I really want to know from the
standpoint of myself as a healthcare provider. If we are doing
something that is saying we want drugs to be affordable but we
are cutting the price so much that people don't want to make
them, that is a serious concern. And so my question is policy
interference. If you can't answer that today, I just want to
know if you will get back to us with that.
Mr. Koh. Sure, Congressman. Those are precisely the issues
that we are wrestling with as a department and as a country. So
thank you for posing that.
Mr. Murphy. And I say this from the standpoint of, look,
what oftentimes what goes around the Hill is lots of
accusations and politics. We can't afford to engage in any of
that on these lifesaving issues. And so I am trusting you to
give us those honest answers and I really appreciate it from
one colleague to another here.
Mr. Koh. Thank you so much, Congressman.
Mr. Murphy. And also with regard to inventories, I am
hearing that hospitals are saying they are having a hard time
keeping their inventory. It is not an issue that they are not
purchasing enough, correct? Or is it? If a hospital says we
can't have some of these things in supply because it may be too
expensive or too difficult for us to keep these in inventory
because of special requirements for how to maintain them, how
to secure them, the special conditions under which they might
be--is that part of the problem, too, they may not be ordering
enough because for themselves it is also very expensive?
Ms. Kweder. I believe that it can be a problem. There also
has been a trend--this is certainly not 100 percent but there
has been a trend in the industry to have what some people call
just-in-time production.
Mr. Murphy. Um-hum.
Ms. Kweder. They don't have the long lead time at
production that may be--particularly for these sterile
injectables that there may be for other products that have
longer shelf lives. So they tend to make less and distribute it
out in smaller amounts----
Mr. Murphy. Um-hum.
Ms. Kweder [continuing]. Which certainly contributes to
hospitals not being able to maintain a large supply and cushion
in addition to what the other concerns that you mentioned----
Mr. Murphy. And again, the just-in-time inventory is one
where they are thinking that they also have a small margin. I
mean it is one of these things, look, we understand healthcare
is expensive. Sickness is more expensive and we all want to
work together. And so I do appreciate and look forward to
seeing your information on this. Thank you very much.
I yield back, Mr. Chairman.
Mr. Pitts. The chair thanks the gentleman and recognizes
the gentleman from Georgia, Dr. Gingrey, for 5 minutes for
questions.
Mr. Gingrey. Mr. Chairman, thank you very much. I am sorry
I missed a lot of your testimony, witnesses, but thank you for
being here.
Let me first address to Secretary Koh, in your testimony
you cite that there were 178 drug shortages in 2010 and that
sterile injectable drugs make up a large and increasing share
of these shortages and by my count, roughly 132 of the 178 were
for sterile injectables. Of these injectable drugs, can you
tell me how many were in shortage in previous years? Has it
been a long-term problem or just more recently?
Mr. Koh. This is a long-term problem, Congressman, and
unfortunately, the trend is going the wrong way. The shortages
are increasing year by year. We did it back through 2006 and
the trend is getting worse since then.
Mr. Gingrey. And then tell me this. Are there any other
common characteristics that you are aware of among these 132
besides the fact that they are generic and they are sterile
injectables? For instance, are these drugs typically newer
generics or drugs that have been on the market for years?
Actually, you just answered that and I thank you. Well, the
other thing on that is are the profit margins typically very
low or any other issues that you might be aware of?
Mr. Koh. So on the first question, Congressman, the irony
here is that these are older generic drugs that we understand
are very helpful if not lifesaving and so to have this
situation is really quite ironic and tragic. And you are right,
there is an issue with respect to business forces here and the
profit margin is understood to be quite low for many of these
individual products.
Mr. Gingrey. And my last question can really go to either
one of you, Mr. Secretary or Dr. Kweder. Am I saying that
correctly? Good. Help me understand something. Mr. Shimkus
earlier addressed this. Many of the drugs we are talking about
are these older generics, not just the sterile injectables,
where the profit margins can often be very low. These low
profit margins can oftentimes lead to very little competition
or even drugs for which only one company make the product. Mr.
Shimkus raised this point about the market prices and I
understand maybe, Secretary Koh, you tried to answer this for
him. I just want to be clear. Do either one of you have any
thoughts as to why you get to the point where there is a
limited number of manufacturers of a particular generic, why
the prices at that point remain low? I mean the market should
be able to work--the market of supply and demand and obviously
when a brand name drug, which is very expensive, first goes
generic and you have several manufacturers jumping in an
producing that generic at a much, much lower price, and then
finally it gets too low for some of them to survive, they stop
doing it and go on to something else, maybe another generic and
a couple or maybe even one company hangs on. It would seem
because of supply and demand that that company would be able to
raise their prices. Are there any government rules,
regulations, laws, pharmacy benefit managers, something that
would cause them not to be able to raise their prices even
though the market would certainly let them do that otherwise?
Mr. Koh. Yes, Congressman, so we have come to understand
that this is a complex business situation where the standard
economic principles of supply and demand do not easily apply.
And we have manufacturers, we have purchasers, providers,
hospitals, we have group purchasing organizations and pharmacy
benefit managers, so we have multiple forces here all working
to the final outcome that ordinarily you would see with a rise
in pricing profit, but that doesn't apply here. So this is why
we need the extra analysis that our department is doing and
others and we welcome new information and modeling to really
help us understand the root causes better.
Mr. Gingrey. Dr. Kweder?
Ms. Kweder. I think the questions that you raise are
exactly some of the questions that we have as we really try to
understand the roots of this problem. What are the things that
could be done to try and prevent these shortages from occurring
or even being at risk in the first place.
Mr. Gingrey. Well, I thank both of you for those answers
because, you know, the Federal Government tries to do the right
thing in many instances--I would hope in all instances and it
seems that far too much of the time they screw it up. And so
that is why I ask you those questions and I hope that you will
continue to look at that so that market forces can continue to
prevail. Then I don't think we would be faced with these
shortages.
Mr. Pitts. The gentleman yields back? This is the round of
questions for the subcommittee members. We have a couple of
members of the committee who have joined us. The chair
recognizes the gentleman, Mr. Walden, for 5 minutes for
questions.
Mr. Walden. I thank the chairman very much, first of all,
for his recognition since I am not a member of the subcommittee
but also for having this hearing. And I appreciate the
testimony from the 2 witnesses today. I got involved in this
issue some time ago because of an oncology doctor in my
district, Dr. Chuck Dibs, who brought this issue to my
attention, my staff's attention. And the drug specifically that
I recall he mentions was--and I will try and say this right--
doxorubicin. Is that right? I understand it is an ovarian
cancer drug which he has prescribed for a very long time,
apparently a very effective drug. And I am not a doctor but
that is what he tells me. What was the FDA's role in
interrupting the production of that drug? Can you speak to
that?
Ms. Kweder. I can speak to that very generally. There were
several companies that produced doxorubicin. One of them which
was the major supplier also was the same producer for the
cytarabine, APP, that Dr. Koh mentioned earlier. Some of the
issues were exactly the same. There were facility issues,
production delays because of, you know, chronic problems in an
aging facility is probably the best way to summarize it. What
FDA did was we worked with the other 2 producers to facilitate
their ability to increase production. It did take a while. As I
said, these are complex products to make. Companies can't just
ramp up production overnight.
Mr. Walden. Right.
Ms. Kweder. But in the meantime, a fourth company came in
with a new version of the product and helped to make up the
supply. So we make sure to expedite review of that fourth
company's application and the inspections, et cetera, that were
necessary in order to turn this around.
Mr. Walden. Now, Dr. Koh, do you have any comment on that?
Mr. Koh. I think Dr. Kweder summarized it well.
Mr. Walden. So you feel like you have taken all the steps?
This drug is now available on the market again and without
shortage? Is this accurate?
Ms. Kweder. My expert tells me, yes. Yes, doxorubicin
itself is. There is another version of the drug that is sort of
a special formulation that has a sole source that continues to
be a problem, but again, that is a different company.
Mr. Walden. All right. I know, Dr. Koh, you mentioned glass
and metal in injectables I think you were discovering which
sends sort of shivers up everybody's spine. I have also heard
though that with the new technologies, the scientists are able
to see deeper into the drugs we had ever seen before in parts
per billion or whatever. Again, this is your field, not mine.
But are we looking deeper and finding things that we never knew
was there before and is that really a problem from a health
standard or is it a question that may play a role?
Mr. Koh. Well, again, those examples, Congressman, are very
graphic examples on the quality issues that we are facing. I
must say though that again the FDA has worked with companies so
in the case of particulate matter--pieces of glass, pieces of
metal--first to identify the issue but also there have been
advances in developing filtering systems so we can filter those
out and make those drugs then safe to inject into patients. So
that is another example of regulatory flexibility that has
marked this chapter of our history. So I guess the end of my
time is about to expire but--I mean my time to ask questions is
about to expire. I just want to clarify that.
It is this sense of urgency. I applaud you for bringing
people together and trying to figure this problem out, but as I
am hearing from both Dr. Dib and others in my district there is
this, you know, patient comes in, the drug is not available,
they have been prescribed it for years, it is effective, it
works, and they can't get it. I know my own mother had ovarian
cancer and died from it and so I have just this sense of
patient urgency. I know you feel that, both of you. We all do.
And so if there is a way we can play a constructive role here,
whether it is Ms. DeGette's bill on notification, I mean she
has put a lot of work into this. You know, we just need to do
everything we can to be a partner in this to find a solution. I
look forward to working with both of you and members of this
committee to the extent they will let me play a role. So with
that, I would yield back the balance of my time.
Mr. Pitts. The chair thanks the gentleman and recognizes
the gentlelady from Colorado, Ms. DeGette, for 5 minutes for
questions.
Ms. DeGette. Thank you very much. And I want to thank my
colleague from Oregon for the free commercial announcement.
Mr. Chairman, thanks for letting me participate. It is good
to be back in my old stomping grounds of the House
subcommittee. As I know you have been discussing, Congressman
Rooney and I have introduced in a bipartisan way the Preserving
Access to Lifesaving Medications Act, which creates an early
warning system between FDA drug companies and providers so that
we can respond to these drug shortages quickly and efficiently.
Do I think that this bill will solve the root problems of the
drug shortage crisis? No. But do I think it is a necessary
first step? Absolutely. And I appreciate the witnesses coming
here to talk to the members of this committee.
This bill came up because Mr. Rooney and I independently
were going around meeting with our hospitals and our doctors
and suddenly, they started saying to us, you know, I was in the
middle of a chemotherapy treatment of a child and suddenly I
couldn't get the drug. And I am sure it didn't happen
immediately but it seemed like it did. Doctor, you are shaking
your head. Do you want to comment on that?
Ms. Kweder. Well, to the prescriber, you know, they are not
following, you know, Web sites. They just know that they can't
get the drug and they have a patient who is ill and needs it
today or tomorrow and not in 2 months when the supply can be
re-upped, and that is a very difficult position to be in as a
physician and even worse as a patient.
Ms. DeGette. And is there some reason why these shortages
have increased recently? Either one of you?
Ms. Kweder. We are trying to understand that. Some of the
things that we have identified is that these are products that
are complicated. Most of the products that have been
problematic are complicated to produce, there are a limited
number of producers, and many of them are working in facilities
that are aging and have had chronic challenges in maintaining
production or product quality.
Ms. DeGette. Yes. And you know, I think before I got here,
Mr. Chairman, you had discussed the current reporting system,
which is the reporting system for companies that don't have
competition and it is a voluntary system. Even though it is
much more limited, it has really worked. In 2010, 38 drug
shortages were avoided when the Agency was given advance
notice. And I just want to give a couple of examples. In August
of 2009, Hospira notified FDA of their intention to discontinue
the drug potassium phosphate in 2010 due to low volume. The
drug is often critical for neonatal care. Hospira received a
note back from the FDA drug shortage in September 2009 thanking
them and then in March 2011 the other supplier of potassium
phosphate, American Regent, recalled its product because of a
quality issue. So what happened then is in April 2011, the FDA
made Hospira aware of the drug shortage caused by the recall
and asked them to assess their ability to return to
manufacturing. And then in that same month, Hospira told the
Agency that they would return to manufacturing potassium
phosphate so that the patients could be served. And so it
worked. But that is on a very limited basis. And so I just
think that this could really work.
And I guess I want to ask you, Dr. Koh, in my minute
remaining, how will it work if we enact legislation like this
to get the information into the providers' hands that there is
an impending drug shortage? Because you folks have had some
experience with it.
Mr. Koh. Sure. And Congresswoman, first of all, thank you
for your leadership on this issue. It is very, very much
appreciated. And we all feel that establishing the highest
level of communication as early as possible about any potential
shortage could give us the opportunity all to be proactive. And
that is not just FDA and HHS but also providers and hospitals
and patients. So if we can do this together, understand that a
potential shortage is on the horizon as soon as possible, make
that information available to relevant parties and ultimately
to patients and the public, then we can all work together in a
proactive way.
Right now we are in a situation that you have summarized
very well where the reporting is voluntary. Oftentimes the FDA
does not know until too late and then patients are stuck in
this dire situation, which is just not acceptable. So we are
looking forward to greater emphasis on early notification and
communication.
Ms. DeGette. Great. Thank you so much, Mr. Chairman. My
time has expired.
Mr. Koh. Thank you, Congresswoman.
Mr. Pitts. The chair thanks the gentlelady.
Before we go to Panel 2, we have one request for a follow-
up for Panel 1. Without objection, we will let Dr. Cassidy ask
that follow-up question.
Mr. Cassidy. Thank you. My office had looked into I think
maybe it had been cysteine. And there was a problem that we
heard back from you of endotoxin being in the product and it
was unclear where in the manufacturing process that endotoxin
had been introduced. Now, obviously that is an issue and
frankly, I called my constituent. I said FDA did the right
thing. We don't know whether endotoxin was introduced. It is
very disturbing to me that endotoxin should be in the product
so we are kind of euphemistically speaking about manufacturing
problems but really they are significant. So is it a pattern?
And when we are saying manufacturing that know there is
actually some sort of contamination such as endotoxin for which
in their GMP they do not know where it is entering. Because
that is a process problem that is of tremendous concern.
Ms. Kweder. The answer is yes. That is exactly the kind of
thing that we are concerned about. When you find end product
that has endotoxin in it, the first thing one needs to do is
figure out how that endotoxin is getting in there in the first
place. And there are multiple steps in production where that
could be occurring and figuring it out is not easy and it can
take a very long time to determine that and then a long time to
fix it. And particularly we see this with metal shavings in
medicine, glass shards in vials, all things that would be
unconscionable to give to patients. But the key is being on top
of those good manufacturing practices and maintaining
facilities to avoid those kinds of events. And where you have
facilities that are in 100 percent production mode all of the
time, it is often difficult to maintain your facilities and
modernize them in a way for a company to assure that they are
producing a reliably high-quality product.
Mr. Cassidy. Thank you, Mr. Chairman.
Mr. Pitts. The chair thanks the gentleman. I believe Mr.
Pallone has a follow-up as well.
Mr. Pallone. Dr. Koh, as Mr. Shimkus said earlier, classic
economics would suggest that when a product is in demand,
prices should rise and the market establish a new equilibrium,
yet we are now in the seventh consecutive year with more
shortages than the year before. I am also curious why the
market has failed to establish an equilibrium because both Mr.
Shimkus and Mr. Guthrie discussed public program pricing
constraints, and as I understand these constraints, they apply
to brand name drugs and not generics. Is that correct that they
only apply to the name brand and not generics?
Mr. Koh. Well, Congressman, those economic issues are
precisely the ones that we are analyzing right now. And we have
especially our assistant secretary for planning and evaluation
and health economists looking at the economic principles and
the modeling that could help us predict where we need to go in
the future. So thank you again for raising these issues. These
are very, very complicated business and economic models we have
come to find.
Mr. Pallone. The generic drugs are where we have seen most
of the drug shortages in recent years.
Mr. Koh. That is right.
Mr. Pallone. I mean if there is that distinction, is that
the problem?
Mr. Koh. Well, we do know that is it older generic sterile
injectables that are making up about 3/4 of these shortages.
And so that is where we are indeed focusing our attention.
Mr. Pallone. I don't know if either Mr. Shimkus or Mr.
Guthrie asked you if you said you were going to get back to
them, but, you know, I would really like to get some answers,
you know. I mean obviously you are not prepared or you don't
feel you have an answer today, but I would like you to get back
to us through the chairman if you could.
Mr. Koh. I would be happy to, Congressman. So again I did
mention we have an upcoming report from the FDA that is going
to give further economic analyses that are also intensely
underway right now.
Mr. Pallone. Is that going to relate to this or you don't
know for sure?
Mr. Koh. Hopefully we will get a better understanding of
root causes.
Mr. Pallone. Mr. Chairman, if he could get back to us on
that because I know many of us have sort of asked the same
question and I would really like to know.
Mr. Koh. Sure. Thank you.
Mr. Shimkus. If the chairman would yield just on this
point.
Mr. Pitts. Go ahead.
Mr. Shimkus. And I thank my friend for following up on this
debate and this question. But in my opening statements, I
didn't just focus on the government pricing. I did say
insurers, too, so I mean we are all kind of in this together
and the market going to work it has got to work. So I just
wanted to just correct the record. I wasn't just picking on----
Mr. Pallone. Oh, no, I understand. I just wanted to bring
up the public program aspect. Whenever, you know, you can get
back to us on it because I think, you know, I mean I understand
to be perfectly honest, I mean a lot of the questions that we
have asked today we have gotten a response and we have a little
better idea, but I almost feel like more questions have been
raised than answered today. And that is not anybody's fault but
that is kind of where I feel we are right now, Mr. Chairman.
Mr. Pitts. All right, thank you. If you will respond to the
questions in writing, we will get those to the committee
members----
Mr. Koh. Thank you, Chairman.
Mr. Pitts [continuing]. And I look forward to reading your
report. The chair thanks the first panel for your----
Mr. Koh. Thank you very much.
Mr. Pitts [continuing]. Testimony. Thank you. We will call
at this time Panel 2. And our second panel consists of 7
witnesses. Our first witness is Mr. Jonathan Kafer, Vice
President of Sales and Marketing for Teva Health Systems and
testifying on behalf of Teva Pharmaceuticals. Next is Mr. John
Gray, the President and CEO of Healthcare Distribution
Management Association. Our third witness is Kevin Colgan. He
is the corporate director of pharmacy at Rush Medical Center in
Chicago. Our fourth witness is Mr. Mike Alkire, Chief Operating
Officer of Premier, Inc. Next, we will hear from Dr. Charles
Penley, who is testifying on behalf of the American Society of
Clinical Oncology. We also have Mr. Richard Paoletti, the Vice
President of Operations at Lancaster General Health. And
finally Dr. Robert DiPaola, Director of the Cancer Institute of
New Jersey.
We thank all of you for coming. Your written testimony will
be entered into the record. We ask that each of you would
summarize your testimony in 5-minute opening statements.
And Mr. Kafer, you may begin your testimony.
STATEMENTS OF JONATHAN M. KAFER, VICE PRESIDENT, SALES AND
MARKETING, TEVA HEALTH SYSTEMS; JOHN M. GRAY, PRESIDENT AND
CEO, HEALTHCARE DISTRIBUTION MANAGEMENT ASSOCIATION; KEVIN J.
COLGAN, CORPORATE DIRECTOR OF PHARMACY, RUSH UNIVERSITY MEDICAL
CENTER, ON BEHALF OF AMERICAN SOCIETY OF HEALTH-SYSTEM
PHARMACISTS; MIKE ALKIRE, CHIEF OPERATING OFFICER, PREMIER,
INC.; W. CHARLES PENLEY, CHAIR, GOVERNMENT RELATIONS COMMITTEE,
AMERICAN SOCIETY OF CLINICAL ONCOLOGY; RICHARD PAOLETTI, VICE
PRESIDENT, OPERATIONS: PHARMACY, LABORATORY, AND RADIOLOGY,
LANCASTER GENERAL HEALTH; ROBERT S. DIPAOLA, DIRECTOR, CANCER
INSTITUTE OF NEW JERSEY
STATEMENT OF JONATHAN M. KAFER
Mr. Kafer. Thank you, Chairman. Chairman Pitts, Ranking
Member Pallone, and distinguished colleagues within the
subcommittee and full committee, thank you very much for the
opportunity to be here today. As referenced by the chairman, my
formal testimony has been submitted to you. I am more than
willing to answer questions specific to that testimony
throughout the questioning period and I will summarize my
remarks in my opening.
I am John Kafer. I am vice president of sales and marketing
for Teva Health Systems, representing Teva Pharmaceuticals.
Teva Pharmaceuticals is a global leader in brand, generic, and
biologic pharmaceutical products. We are a market leader in
many of the markets in which we serve. Here in the United
States, we are the market leader in generic products. We have a
vast portfolio including many dosage forms, including oral
solid presentations, injectable presentations, including a
significant portfolio of oncology generic injectable
presentations, and I look forward during the questions period
to share some insights specific to that very important
category.
As referenced, we are a market leader. Teva is a market
leader and we understand and embrace the responsibility that
does come with being a market leader, and in that context, I am
very happy to be here today.
One side note, as all of us have been, we all have personal
stories as it relates to family, friends, people we know,
individuals that have been impacted by not being able to get
medications. In my particular situation, I have friends and
family as well. Given the role I play, they reach out to me
hoping I may be able to make a difference. Unfortunately, there
is many times I can't and it is very challenging. At the same
time, given the role I play, I hear from patients, I hear from
family members of patients, I hear from constituents, I hear
from physicians looking to the manufacturer to ask the
question, ``Why?'' And we respond and we certainly understand
that.
And at the same time, I see every day when I go to work
hundreds and hundreds of people working tirelessly around the
clock, sparing no expense to do whatever we can to return to
historical production volumes so that we can get these critical
products back to market.
As referenced in earlier testimony, this is a very complex
multi-stakeholder issue and it is going to require the
coordination and communication amongst all those stakeholders
in order for us to resolve this issue. As noted in earlier
testimony as well, there are many factors that impact the drug
shortage issue, whether it be API being sourced and available.
We have discussed that. The industry has experienced
manufacturing challenges. I will go into greater detail
specific to how it impacts a sterile facility versus an oral
solid facility. And there has been regulatory impacts on
facilities.
As appropriate and as required, the FDA regulates these
complex facilities and these products to assure that the
manufacturing community is operating within full CG&P
compliance, ultimately to provide the highest quality of
products to all of us in this room. We understand that and, as
a manufacturer, we certainly embrace that.
Most of the shortages, however, are unanticipated. Those
unanticipated shortages can have boomerang effects up and down
the supply chain. And as noted in earlier testimony, as we will
get into in greater detail, there are a handful of
manufacturers that sometimes are unable to pick up the lost
supply from another manufacturer, and we will go into detail
around that as well.
What is Teva doing specifically to address some of the drug
shortage issues? We have made a significant investment in
enhancement of our facilities as well as our quality systems.
We have unrestricted access to our resources globally to
prioritize those people in those facilities that require the
work that needs to be done to get the products back to market.
We have embarked on a very aggressive redundancy plan. There is
no requirement to a manufacturer to have a secondary or
tertiary facility qualified to manufacture these products. We
have identified, in combination with drug shortage division,
those most critically medically necessary products and we have
5 FDA-approved facilities and we have put a team in place that
is actively working on redundancy planning for these critical
products.
As referenced also from the testimony of Dr. Kweder and Dr.
Koh, there has been extraordinary collaboration within the FDA
branches as it relates to resolving and mitigating these
challenges. I can speak to a couple of different references. 1)
There was a discussion earlier in testimony around coordination
of importation of products to alleviate critical drug
shortages. There was a specific instance in which we worked
with the FDA to bring in a product called leucovorin that is
used in combination with chemotherapy twofold to enhance the
effectiveness of that treatment as well as to mitigate side
effects. We brought it in, we had a significant amount of
resources to work collaboratively with that, and we were able
to help mitigate that problem.
The solutions that we are looking at, recognizing it is a
multi-stakeholder issue, I do need to comment that as it exists
today, there is tremendous cooperation within the drug shortage
group and the manufacturing community. As referenced earlier,
there is no formal process. It is an informal process. And I
can speak on behalf of Teva and the other leading manufacturers
in this space that we do all collaborate with the FDA, as
testified earlier, and we take that very seriously and we are
responding where we can. The doxorubicin example mentioned
earlier, I received a phone call from York shortage, do what we
can. We were able to work in collaboration with them and get
product released to market and we continue to prioritize those
types of products.
During questioning, I would be more than happy to go into
greater detail around how we are seeing the coordination and
the effectiveness and how we would like to see a greater
communication amongst multiple stakeholders beyond the
manufacturer and FDA. Going forward, we had seen discretion by
the Agency deployed to allow earlier available of key products.
That is working. We would like to see a process in which we can
get that on the front end as well to potentially mitigate
potential problems while incorporating remedial steps that have
no impact or concern to the patient.
I know I am over my time share, so I apologize.
[The prepared statement of Mr. Kafer follows:]
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Mr. Pitts. The chair thanks the gentleman. Mr. Gray, you
are recognized for 5 minutes.
STATEMENT OF JOHN M. GRAY
Mr. Gray. Good morning, Chairman Pitts, Ranking Member
Pallone, and the members of the Energy and Commerce
Subcommittee on Health. I am John Gray, President and CEO of
the Healthcare Distribution Management Association, Arlington,
Virginia. I appreciate the opportunity to come here today,
provide some overview of the pharmaceutical distribution system
and inform your committee on efforts regarding some critically
important issue around drug shortages.
A little history--HDMA is a national association
representing America's primary healthcare distributors, a vital
link in our Nation's system of healthcare distribution. Each
business day, our 34-member companies ensure that nearly 9
million prescriptions, medicines, and healthcare products are
delivered safely and efficiently to nearly 200,000 pharmacies
and clinics, hospitals, nursing homes, and other providers
nationwide. Approximately 90 percent of all pharmaceutical
product sales in the United States flow through our member
companies. Continuous innovation and operation efficiency have
really set our members apart in trying to annually contribute
an estimated about $42 billion in value to the Nation's
healthcare system.
Now, Federal law defines wholesale drug distribution as
``the distribution of prescription drugs to other than the
consumer or patient.'' Wholesale distributors are licensed
entities that are bound by a range of Federal and State laws.
In addition, our distributors must comply with licensure
requirements in every State in which they operate.
It is important to note HDMA members are primary
distributors. I said that earlier; I will reiterate it. But
they buy predominantly from pharmaceutical manufacturers and
sell only to appropriate licensed customers, the vast majority
of which are pharmacies or healthcare providers.
Pharmaceutical products are distributed through a highly
coordinated supply chain in this country to provide maximum
efficiency and effectiveness and safety. Pharmacies and other
healthcare entities generally place orders for prescription
medicines by 8 o'clock in the evening and receive deliveries
from their distributors the next morning. The average
distribution center in this country processes nearly 2,000
orders a day. On the average, a warehouse maintains about 30
days of inventory level. This number varies by product, is
subject to demand, seasonality, cost, and other factors.
Pharmaceutical products with special handling requirements
typically have shorter cycle times in the system.
Distributors provide an array of services for manufacturers
beyond simply the movement of product, including but not
limited to receivables risk management for the manufacturer,
customer validation, order management, inventory management
tracking, processing returns and recalls, and contract
management. For pharmacy and provider customers, our
distributors provide an equal array of services, including
aggregate ordering, assistance with stocking needs, support for
information systems and software, as well as accounting and
credit support. In the case of inventory management,
distributors are able to fill customer orders 6 or 7 days per
week, 365 days a year, which limits the need for large
inventory levels at the pharmacy level.
In sum, distributors serve to maximize the efficiency
between manufacturers and healthcare providers by managing a
very complex network of products of systems by efficiently
providing mechanisms for this seamless transformation of
information and product.
Through the unique position of distributors and our close
relationship with all the stakeholders, we are acutely aware of
the impact of drug shortages on patients. Effectively
addressing the drug shortage is difficult and complex for the
entire healthcare community in large part because the shortage
typically appears with little or no warning and often requires
significant resources to manage. HDMA and our member companies
work hard to improve the communications within the supply chain
from manufacturer to distributor to provider where possible and
try to mitigate the impact of the drug shortage.
Although distributors do not manufacture product, they do
play an important role in helping to coordinate and share
information about drug shortages when those shortages arise.
Distributors are typically notified of a shortage by a
manufacturer or a provider partner. Once that shortage
information is received, distributors communicate with their
manufacturer partners about product availability to understand
the scope and expected duration of any shortage. Then the
distributor works as quickly as possible with customers to fill
orders to the extent they are able to do so based upon
purchasing history or, if necessary, to identify alternative
products in the supply chain. So as you can appreciate, there
is a delicate balance between the need to share information at
the appropriate level, but at the same time preventing an
environment for panicked buying.
HDMA has worked collaboratively with the American Society
of Health System Pharmacists, Federal agencies and the
Congress, and other supply chain partners to share expertise
about the whole drug supplies chain. In addition, we are
working with our distributor members and manufacturer providers
to update voluntary industry guidelines on improving
communications between supply chain partners in the event of
shortages. We hope this effort will contribute to the better
management of the process in its entirety.
HDMA strongly believes the healthcare industry as a whole,
the government, and stakeholders must continue to work together
towards some collaborative solutions of this problem that
mitigate the impact of the shortages, and most importantly, the
impact on the key stakeholder--the patient. To that end, I
thank you again for this invitation to participate and I hope
the overview has been valuable. And I look forward to your
questions.
[The prepared statement of Mr. Gray follows:]
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Mr. Pitts. The chair thanks the gentleman. Mr. Colgan, you
are recognized for 5 minutes for an opening statement.
STATEMENT OF KEVIN J. COLGAN
Mr. Colgan. Good morning and thank you, Chairman Pitts,
Ranking Member Pallone, and distinguished members of the
subcommittee, for holding this hearing. My name is Kevin
Colgan. I am the corporate director of pharmacy at Rush
University Medical Center in Chicago, Illinois. I am here today
because I cannot serve my patients or the caregivers due to
shortages of medications, some of them critical to patient
care.
While there is no single solution that will immediately
solve the problem of drug shortages, there are things we can do
to help address this issue. First, bipartisan legislation in
both houses of Congress would enable FDA to require that drug
manufacturers report confidentially to the Agency when they
experience an interruption in the production of their product.
This early warning system will help the FDA work with other
manufacturers to ramp up production when another company
experiences a problem. Moreover, the bills call upon FDA to
work with manufacturers to develop continuity of supply plans
which could help to identify backup sources of active
pharmaceutical ingredients and produce redundancies in
inventory to serve as reserve supplies.
While some have argued that this legislation won't have any
impact, we disagree. You have already heard this morning from
the FDA that in 2010, 38 drug shortages were avoided, and last
year, 99 drug shortages were avoided when the Agency was given
advance notice. Further, opponents of this approach argue that
it will lead to hoarding. We know that hoarding already occurs.
How do some find out about shortages before others? We don't
know all the answers to this question. What we do know is that
early warning to FDA will help make sure that everyone has the
same information at the same time. Simply put, the public
benefit of an early warning system far outweighs the risk of
hoarding. In other emergency preparedness areas such as
bioterrorism, flu pandemic, and natural disasters, we develop
action plans and communication channels among necessary
responders. Why would we approach drug shortages any
differently?
Second, health-system pharmacists have been collaborating
with other clinicians and members of the supply chain to work
with the FDA to address this problem. For example, we believe
FDA should have and devote necessary resources to speed up the
regulatory process to address drug shortages. Other
alternatives include improved communication between FDA field
personnel and the drug shortages program to assess the
comparative risk of public harm when a potential enforcement
action will cause or worsen a drug shortage; exploring
incentives for manufacturers to continue or to re-enter the
market; a generic user fee program to speed approvals; and
last, ensuring the Agency has the funding it needs to carry out
its mission.
Many of you sitting in this room sometime over the next
several months is going to receive the news that you, a family
member, or a friend has been diagnosed with cancer, needs
surgery, has been admitted to an intensive care unit, has a
serious infection that requires an IV antibiotic or antiviral
medication, or has a premature baby or grandbaby that requires
nutritional support. And the last thing you want to hear is
that we don't have first-line medication therapy to treat you;
that the medication we have may not work as well and could
cause heart damage, but it is all we have to offer; or that we
are delaying your treatment until we are able to obtain drugs
that are in short supply. These are all situations, I, my
clinical pharmacy staff, and the physicians, nurses, and
respiratory therapists that we work with have had to manage
over the past year. From our perspective, drug shortages
represent a national healthcare crisis. We don't have one
single solution, but we have offered a number of solutions that
together can help resolve this problem.
Again, thank you Mr. Chairman, ranking member, and all
members of the committee for the opportunity to provide input
on this problem. Thank you.
[The prepared statement of Mr. Colgan follows:]
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Mr. Pitts. The chair thanks the gentleman. We are in the
middle of votes. We have 14 votes. We are going to try to get a
couple more before we go and recess for the vote and we will
come back. So Mr. Alkire, you are recognized for 5 minutes.
STATEMENT OF MIKE ALKIRE
Mr. Alkire. Thank you. Good morning, Chairman Pitts,
Ranking Member Pallone, and members of the committee. I am Mike
Alkire, Chief Operating Officer of the Premier Healthcare
Alliance. Premier is owned by not-for-profit hospitals and
health systems. We use the power of collaboration to lead the
transformation to high-quality and cost-effective healthcare.
One of the ways we do this is by aggregating the buying power
of 2,500 hospitals to get the most effective medical supplies
and drugs at the best prices.
I thank the committee for leading efforts to address drug
shortages. As you are aware, the number of drug shortages has
tripled since 2005 and many of these medicines are essential to
patient care. Premier set out to understand the extent of the
problem through a survey. We found that between July and
December of 2010, more than 240 drugs were either in short
supply or completely unavailable in 2010. Over 400 generic
equivalents were backordered for more than 5 days. Many of the
drugs noted as backordered in 2010 have remained unavailable or
in short supply in 2011, and 80 percent of the hospitals
reported that shortages resulted in a delay or cancellation of
a treatment.
Drug shortages also carry a cost--an estimated $415 million
annually through the purchase of more expensive substitutes and
additional labor costs. We don't have the ability to estimate
the financial impact of shortage drugs where there are no
alternatives. We are working to diminish these costs by
determining manufacturing capabilities to assess whether a
manufacturer can supply the market; we look for alternatives if
capabilities don't meet demand; instituting an early warning
system for hospitals to notify us of shortages; once notified,
we determine the scope of the problem and communicate with the
FDA; and exploring longer-term contracts with manufacturers to
create more predictable volumes and stability in the market.
In this crisis, we hope people will do everything they can
to help patients get the drugs they need. Instead, we have seen
the gray market vendors taking advantage of a problem offering
to sell shortage products at exorbitant prices. Premier
analyzed unsolicited offers from gray market vendors on
shortage drugs. We compared their prices to Premier's. We found
that average markups were 650 percent and the highest markup
was 4,500 percent. In this case, a vial to treat high blood
pressure that sells for 25.90 was offered for $1,200. Markups
were 4,000 percent for drugs to treat leukemia and non-
Hodgkin's lymphoma, 3,100 percent for drugs to help cancer
patients to retain bone marrow. Forty-five percent were marked
up 1,000 percent above a normal price and a quarter were marked
up 2,000 percent.
Where and how gray market vendors are getting these
medicines no one knows. And how can the integrity of these
drugs be ascertained? Again, a question that few know. That is
why Premier has taken a position that pharmacies should avoid
these vendors and stick to known primary distributors. But in
times of shortage, pharmacies may need to look elsewhere. In
these cases, we develop a set of best practices. These
practices include verifying the product's chain of custody,
confirming licensure, verifying that a seller is authorized to
sell the product, and confirming that the seller is a verified,
accredited wholesale distributor.
But in our view, the best way to stop price gouging is to
fix the drug shortage crisis. We ask the committee and the FDA
to consider the following: speed the approval process for
medically necessary drugs that appear to be in shortage;
encourage FDA to engage stakeholders in discussions determining
whether a drug is medically necessary--the objective is to
prioritize drugs that are necessary for treatment and also may
be at risk for shortages--grant the DEA flexibility to adjust
quotas that are limiting the amount of active ingredients
manufacturers may purchase for controlled substances, thus
limiting their ability to ramp up production when a supplier
exits the market; fast-track approvals of new active
pharmaceutical ingredient suppliers for medically necessary
drugs in shortage; work with manufacturers to slow the trend of
acquiring raw materials outside the U.S.; require manufacturers
to notify the FDA of planned supply interruptions--this will
allow time to work with remaining manufacturers to increase
production--and establish an early warning point of contact at
the FDA.
In closing, I thank the committee for the opportunity to
share what we have learned about drug shortages and the
alarming impact it has on the safety and health of our
communities, as well as our healthcare costs. Premier stands
ready to assist Congress in finding ways to ensure a safe,
reliable drug supply.
[The prepared statement of Mr. Alkire follows:]
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Mr. Pitts. The chair thanks the gentleman. And again, we
appreciate your patience. We have got 5 minutes left for a
vote. I think we will break here and come back as soon as the
last vote is over and continue the testimony.
The chair recognizes Mr. Pallone.
Mr. Pallone. Mr. Chairman, I just wanted to ask unanimous
consent to submit the written statement for the record of
Congressman Matheson.
Mr. Pitts. Without objection, so ordered.
At this point, the subcommittee stands in recess until
after the last vote.
[Recess.]
Mr. Pitts. The subcommittee will come to order. Again, I
apologize for the schedule, and I appreciate very much your
patience and your thoughtful testimony. We will resume the
testimony with Dr. Penley. I believe you are up next, so you
have 5 minutes.
STATEMENT OF W. CHARLES PENLEY
Mr. Penley. Good afternoon, Chairman Pitts, Ranking Member
Pallone, and the remainder of the subcommittee. I am Charlie
Penley, and I am a practicing oncologist in Nashville,
Tennessee. I spend the majority of my time taking care of
patients, and this is why I am pretty uncomfortable in this
environment. But I am here today to talk about the impact of
drug shortages on my patients. I speak today on behalf of the
American Society of Clinical Oncology. Our 30,000 members and
their patients thank you for holding this hearing. Drug
shortages have indeed reached crisis proportions in oncology.
We hope that this hearing will better frame potential
solutions.
ASCO is hearing from practices all around the country,
large and small, community-based and hospital-based practices
who are having challenges treating their patients. The
situation, as you have heard this morning, is worsening. Drug
shortages in the United States have tripled since 2005/2006.
Almost all cancer types are affected--leukemia, lymphoma,
breast cancer, ovarian cancer, testicular cancer, and colon
cancer. Shortages are indeed forcing us to change the way we
treat our patients. Often, a drug in short supply is
potentially curative. There is no reasonable substitute.
Our practice treats many patients who have been diagnosed
with acute myelogenous leukemia, AML. It is a life-threatening
but potentially curable disease. Cytarabine, as you have heard,
is one of the essential components of treatment for AML but
that agent has been and remains intermittently in short supply
today. Physicians have been forced to tell patients that this
potentially curative drug is not immediately available to them.
Treatment delay can result in grave consequences in these
critically ill patients.
In other situations, there are alternative drugs, but they
are less effective, they have more side effects, or they are
dramatically more expensive. For example, the standard
treatment for non-Hodgkin's lymphoma is known as the CHOP
regimen. CHOP chemotherapy includes doxorubicin, which has been
and is in shortage. A colleague shared the story of a young
woman who was recently diagnosed with lymphoma during
pregnancy. Now, that is a very complex situation which
fortunately doesn't happen very often, but it involves
potential risks for both the mother and the child. Because of
the doxorubicin shortage, the woman had to be treated with a
substitute, one for which the risk for the baby is not as well
known and which may be less effective treatment for her
lymphoma. Oncologists and patients should not have to make such
difficult choices.
I am currently treating a national firefighter who has an
advanced gastrointestinal cancer and who was responding to 5-FU
based chemotherapy. Earlier this summer, we were unable to
obtain 5-FU and had to use an alternative regimen, which both
caused him more personal side effects and significantly
increased his out-of-pocket cost.
The price of substitute drugs can be up to 100 times more
expensive than the drug normally chosen, especially if the
substitute is a brand name drug. As an example, when the
mainstay generic drug leucovorin went into shortage,
oncologists had to treat patients with the substitute,
levoleucovorin. Medicare payment for 50 milligrams of
leucovorin is $1.25. An equivalent dose of levoleucovorin is
approximately $90.
The clinical trials infrastructure in this country is
threatened by drug shortages as researchers alter or delay
trials because the drug that is part of the study becomes
unavailable. As many as 60 percent of clinical trials have been
delayed, this at a time of great promise in cancer research.
We understand that there are many causes of this problem, a
number of them involving the manufacturing process. However,
market factors appear to be a key driver in this rapidly
escalating crisis. Shortages in cancer drugs are almost
exclusively in generic sterile injectables, which are generally
inexpensive drugs with a very low profit margin. Companies that
experience manufacturing complications may not have the
incentives to invest resources required to upgrade facilities
or to correct quality problems.
As we have heard, there does not appear to be a single
solution to the crisis. Our primary expertise is in patient
care, but we would offer these potential solutions, which we
would encourage the committee to explore. First, Congress
should urge expedited abbreviated new drug applications, or
ANDAs, for drugs vulnerable to shortage in a way that does not
compromise safety. Secondly, because this amounts to a public
health crisis, Congress could work with Medicare to address
pricing and payment for ultra-low-cost generic drugs. Third,
Congress should pass S. 296 and H.R. 2245, bipartisan
legislation that would give the FDA increased authority to
manage the shortages. Fourth, consider tax incentives to
encourage or enable generic manufacturers to continue to
produce vital drugs, update their facilities, or enter the
market to produce the drugs vulnerable to shortage.
Mr. Chairman, ASCO has been and will remain an active
partner in seeking resolution to the problem. The stress of
dealing with a cancer diagnosis and the risks of necessary
treatment is a heavy enough burden for patients and families to
bear. It is absolutely unacceptable that the lack of effective
oncologic therapeutics should add to that stress, or worse,
threaten lives. We must do everything in our power to resolve
this crisis, and we should do it immediately. We appreciate
your leadership on this issue, and we stand ready to do
everything that we can to assist. Thank you very much.
[The prepared statement of Mr. Penley follows:]
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Mr. Pitts. The chair thanks the gentleman and now
recognizes the gentleman from Lancaster, Mr. Paoletti.
STATEMENT OF RICHARD D. PAOLETTI
Mr. Paoletti. Good afternoon. I want to thank the committee
for convening this hearing and for the opportunity to
participate in this important discussion. My name is Rich
Paoletti, and I am vice president of operations at Lancaster
General Health in Lancaster, Pennsylvania. My comments today
will address the daily challenges hospitals, patients, and
providers are experiencing as a result of increasing drug
shortages occurring nationwide.
In the current healthcare climate, hospitals are being
asked to restructure to meet the quality, safety, fiscal
constraint, and community-benefit standards expected in today's
world. Our resources are being stretched to the limit. Ongoing
drug shortage challenges at Lancaster General are further
taxing and diverting those resources to respond to the almost-
daily patient impacts these shortages create. This pattern is
increasingly becoming the norm for hospitals, physician
practices, emergency responders, and most importantly, patients
everywhere.
At Lancaster General, we work hard to maintain a culture of
quality and patient safety largely based on fundamental
building blocks of standardization through elimination of waste
and variability. In direct conflict with these safety
practices, drug shortages add variability, complexity, and
additional burden, increasing the possibility of medication
misadventure, poor outcomes, and patient harm.
The lack of an early warning system regarding impending
shortages is one of the greatest challenges we face as
healthcare providers, such that sometimes learn about shortages
or their severity when products are not received in our daily
shipments.
A review of our drug wholesaler orders last month revealed
receipt of only 3,452 of the 4,344 line items orders processed,
representing a fill-rate of about 80 percent. In other words,
892 line items ordered in August were not received. Every
disruption to medication supply creates new responsibilities to
investigate alternative treatments and evidence to update
protocols, procedures, and various technologies. Additionally,
we must disseminate effective education on alternatives not
always readily familiar to frontline caregivers. In our fast-
paced, complex environment, every substitution adds variation
and risk.
These logistical tasks consume significant dedicated hours
from multiple stakeholders and staff working collaboratively on
detailed plans to maintain safety, while requiring execution in
limited timeframes. This means working with anesthesiologists
and emergency physicians in contemplating how we might maintain
airway in a patient presenting to the trauma center without the
availability of a paralyzing agent; neonatologists considering
how we may best provide nutritional care to compromised
premature infants; infectious disease specialists searching for
alternative anti-infectives; and oncologists discussing
alternative treatment regimens midway through a course of
therapy; and more importantly, how we will reveal to patients
that we may not have the medication necessary to treat their
ailments. In our opinion, this issue represents the national
healthcare crisis.
Relieving and minimizing avoidable drug shortages requires
both short-term interventions and longer-term, permanent
solutions. These potential solutions require system changes and
increased capacity, including the following: establish an early
warning system as proposed in bipartisan legislation currently
in both Houses of Congress to immediately help to avert or
mitigate drug shortages proactively; establish and improve
communications between the FDA and manufacturers to develop
evidence-based allocation plans for critical drug therapies;
secure the pharmaceutical supply chain; and direct available
supplies to our most critical patient populations; explore
incentives to encourage drug manufacturers to stay in, reenter,
or initially enter the market critical to specific drugs in
short supply. These could include creation of a fast-track for
approval of new production lines, alternative manufacturing
sites, or new suppliers of raw materials for medically
necessary drugs in shortage or vulnerable to shortage without
compromising the quality and safety.
Again, I want to thank the committee for holding this
hearing. Lancaster General Health offers its continued support
and commitment to assist in the development of solutions that
will help to prevent and mitigate risks caused by drug
shortages. Thank you.
[The prepared statement of Mr. Paoletti follows:]
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Mr. Pitts. The chair thanks the gentleman.
Dr. DiPaola, you are recognized for 5 minutes for your
statement.
STATEMENT OF ROBERT S. DIPAOLA
Mr. DiPaola. Thank you. Good afternoon, Chairman Pitts and
Ranking Member Pallone and members of the subcommittee. My name
is Dr. Robert DiPaola. I am director of the Cancer Institute of
New Jersey, the State of New Jersey's National Cancer
Institute-designated Comprehensive Cancer Center. I also speak
as a member of the American Association for Cancer Research
(AACR) and its Science Policy and Legislative Affairs
Committee. Thank you for convening this hearing and recognizing
the impact that the current drug shortage problem is having on
our patients and on our ability to advance cancer research and
improve patient outcomes.
You have heard about the effects of drug shortages on
treating patients. As the director of an NCI-designated
Comprehensive Cancer Center and a medical oncologist myself who
treats and cares for patients, I have the same frustrations
regarding the care of our patients and the negative impact of
drug shortages. This impact is not only immediate for the
patients in our clinics today, but also affects the future care
of cancer patients because the next generation of cancer
therapy is driven by today's clinical trials that are critical
to meeting the national goal of improving the outcomes for
cancer patients. Shortages of drugs is actually--as you know
and you heard today--a very complex problem.
There are a number of ideas regarding what is causing them,
and how they can be remedied. I am here today to discuss how
this growing problem of shortages of already approved drugs,
which in some cases, as you have heard, have been used and made
for decades, is affecting our best cancer care, our clinical
trials, and is threatening our ability to continue on our
trajectory of steadily improving cancer patient outcomes.
FDA statistics show that the number of drug shortages has
more than tripled over the past 6 years, with a marked increase
in drugs involving sterile injectables, which negatively
impacts the treatment of cancer patients--again as you have
heard--that most shortages in oncology are sterile injectables.
The medications in short supply include cancer treatment drugs,
anesthetics, antimicrobials, and pain medications. A list
maintained by the American Society of Health-System Pharmacists
recently identified 193 shortages in 2011, of which 22 are
cancer drugs, and the shortage is predicted to worsen. These
include drugs that are the standard treatment regimens used to
treat patients with many different cancers in adults and in
children.
These shortages are now affecting clinical trial options
for patients with cancer. Due to the uncertainty of being able
to obtain many of these drugs, enrollment of patients on
clinical trials has been delayed or stopped in several of our
trials. Many of these drugs that are in short supply are a part
of the standard regimens in which new treatments are added or
compared to within a clinical trial. Many of the drugs on the
shortage list are also used in our large national cooperative
group trials. The Coalition of Cancer Cooperative Groups
reports that approximately 50 percent of active cooperative
group cancer clinical trials involve drugs subject to
shortages. Many reports contain examples in which sites are
unable to enroll patients on approved clinical trials due to a
lack of drug supply. Investigators in these clinical studies
are unable to enroll new patients when the drug supply is not
available; patients on-study are sometimes receiving alternate
drugs when supply is not available, and there is concern about
interpretation of results when drug substitutions occur.
It is important to remember that the impact from the drug
shortages on clinical trials today will also have a long-term
effect on cancer research and future treatment options for
cancer patients. Clinical trials represent the final step of a
long process of developing new therapies that improve the
outcome of patients and add treatments for patients in which
there were no effective prior options.
When, after years of effort, a single researcher discovers
a potential new drug or treatment, that particular new drug is
often best added to an existing treatment in combination and/or
tested in comparison to the best current treatment in a
clinical trial. If that trial yields positive results, patients
can ultimately have access to a new and improved drug or
treatment combination. Currently, however, we are running out
of many of the existing drugs. When a clinical trial runs out
of a drug, even temporarily, the trial results may be
compromised, and an enormous amount of work and expense is
wasted. This means that during a clinical trial, a shortage of
only a few weeks in an existing drug might mean delays in years
for developing a new drug. In other words, the drug shortages
of today can have a ripple effect on the availability of new
drugs and treatment combinations tomorrow.
Today, we estimate that 1 in 2 men and 1 in 3 women will
develop cancer in their lifetimes. This year, over 1.5 million
Americans are estimated to be diagnosed with cancer and more
than half a million Americans are expected to die of their
disease. That is more than 1,500 people a day or more than 1
per minute. While these numbers seem staggering, we have made
great strides in our ability to diagnose, treat, and prevent
cancer and are at a most promising time in cancer research.
Earlier this week the American Association for Cancer
Research issued a progress report marking 40 years of progress
in fighting cancer. In fact, thanks to advances made in cancer
research, today more than 68 percent of adults are living 5 or
more years, which increased from 50 percent in 1975. It was
also reported that in the period from 1990 to 2007, death rates
for cancer in the U.S. decreased by 22 percent for men and 14
percent for women.
The challenge we now face is to continue to turn
groundbreaking science into lifesaving care at even greater
speed. By facilitating clinical trials, we lay the groundwork
for discoveries in basic cancer research to be translated into
cutting-edge treatments for cancer patients.
The current drug shortage is hindering our ability to treat
cancer patients overall. We are entering a new era of cancer
treatment and prevention. However, an inability to have best
treatment for our patients in general and conduct clinical
trials is a serious impediment to our goal and will hamper our
ability to reduce the toll of cancer for the people of our
Nation.
Thank you.
[The prepared statement of Mr. DiPaola follows:]
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Mr. Pitts. The chair thanks the gentleman and thanks all of
our 7 witnesses for your thoughtful testimony. And we will
begin questioning at this time. I recognize myself for 5
minutes for that purpose. Let me begin with you, Mr. Paoletti.
A couple of questions. Can you walk us through what happens
from your perspective when there is a drug shortage? Who
notifies you? How much warning do you get? What do you need to
do to notify the people in your organization?
Mr. Paoletti. It differs in every instance, but like I
said, a lot of times we find out when a drug order doesn't come
or our buyer-and-receiving process, through the receiving
process, we learn that we didn't get a medication on order. The
buyer then has to follow up with the wholesaler to find out if
that is a temporary outage, when we would maybe next expect
that, and then that would relay into an investigation of more
than probably for us 100 to 150 inventory locations in
automated cabinets throughout our facility. So we look at what
we have on hand, how much we continually use on a day-to-day
basis, and estimate how much supply we would have if we
continued business as is.
Based on that and the information we get, we have to
convene a team. It is typically pharmacists, nurses, the
specific stakeholder physicians depending on what medicinal it
is. We look at the indications, we look for alternative
therapies that we may have available to us, and kind of assess
how critical the nature of the shortage is. And then based on
that, we have to create action plans. Sometimes it involves the
pharmacy manually preparing specific minimal doses of
medications to make our supply last as long as conceivably
possible. That was the case with one instance last October that
to me was the tipping point of the drug shortages with a drug
called succinylcholine. We came down to the last couple days of
therapy and really contemplating cancelling surgeries and, you
know, how we would, you know, manage those situations.
Mr. Pitts. Is there any way, at present, for you to
anticipate a shortage?
Mr. Paoletti. Through some online web sources, as good as
the information is based on what the drug companies reveal and
what is published, we have an active surveillance program now
that goes out to the FDA Web site, that goes out to ASHP
resources to look at that information, which sometimes is
published with alternatives. So the University of Utah's Drug
Information Center has been very helpful in that regard, but it
is only as good as the information that is available. And a lot
of times, no information exists until we self-report that we
are having difficulty.
Mr. Pitts. Thank you. Let us just go down the line. Mr.
Kafer, from your company's experience, what are the main
reasons for a drug going into shortage, and how does your
company work with FDA to notify them of the shortage?
Mr. Kafer. From a notification standpoint, our primary
point of contact when we become aware of a shortage for any
number of reasons we could have had a manufacturer lot rejected
during release testing. And what that means is after you finish
your manufacturing process, every injectable goes through about
a 3- to 4-week series of tests. If those tests fail for quality
reasons or not meeting a specification, you reject that lot. If
we anticipate a shortage, our primary point of contact
continues to be FDA drug shortage. As testified this morning by
Dr. Kweder, I think the point was made that they do not
immediately post that information because that can trigger
additional behavior where the awareness of the potential
shortage could lead to purchasing of another generic product or
even another comparative therapy which can drain those supplies
as well. So we coordinate directly with the drug shortage group
and then we coordinate with our hospital partners and our
distribution partners.
Mr. Pitts. And how have you worked with the FDA to
alleviate a shortage?
Mr. Kafer. We have worked extremely well with the FDA.
There has been many instances in which we have collaborated. I
think through the drug shortage group, they have been playing
quarterback on this. I think we mentioned earlier this morning,
it is not a formal process, but they do a fantastic job in
pulling instances together. There has been at least 3 occasions
where we had submitted a prior approval supplement, and by
definition of that, that is an extensive review that indicates
that we have had significant changes to a product or process
which would typically take long, but they have been able to
expedite those reviews and get those approved in about a 3-
month period that allowed us to get those critical products to
market.
Mr. Pitts. Thank you. Mr. Gray, can inventory management
practices create the impression of a drug shortage, and how do
distributors and others work to avoid that situation?
Mr. Gray. Well, inventory management practices or just-in-
time or whatever you want to call it, those are actually across
the supply chain from just-in-time production to just-in-time
delivery. Our members focus on the delivery side, the
manufacturers on the production side. And that actually is a
process developed over the last 25 years in the consumer goods
area, which is really to spread out the predictability of
manufacturing, as well as altering both the manufacturer, the
wholesaler, and the retailer or pharmacy when product
potentially is short. It is more real-time information across.
So the reality is the inventory management programs are really
there to spot the shortages potentially before they happen, and
that is really what has been developing since the late 1980s
from the food industry into the pharmaceutical industry.
So I am not sure there is a connection there. I have heard
that today. If you really look at the science of that, the
mentality behind those is really to identify those shortages
early on.
Mr. Pitts. Now, when a secondary distributor purchases a
drug product, they often pay more than the primary distributor
would pay. So if they then charge more for the drug, they are
simply responding to market, aren't they? This is not a gray
market practice, is it? Can you contrast that with the gray
market?
Mr. Gray. I can't speak to the secondaries. I know our
members, our 34 primary wholesalers, we are buying directly
from manufacturers, and then we sell only to state-licensed
entities, be that a secondary distributor, a hospital,
pharmacy, or whatever. And so, usually, we are under contract
pricing with the manufacturers for those products. So if we are
selling them on down to a provider, it is usually a contract
price already preset. What a secondary would do with that
product, I do not know. In terms of pricing, I have no
information on that.
Mr. Pitts. Thank you. Mr. Colgan, in your testimony, you
state that there is no one solution to this problem; however,
you stress the importance of enacting legislation to require
manufacturers to notify FDA of possible shortages. Can you
explain why this requires legislation to accomplish and why it
needs to be done on a confidential basis?
Mr. Colgan. Sure. I think when there is a leak or a hole in
the dam, I think you need to stick your finger in it first to
stop the leak, and then you need to explore what the reason is
for it, and then you need to solve the problem. What this
legislation really does is sticks your finger in the hole in
the dam to stop the leak. And basically, we have heard from
testimony today from the FDA that they have been able to
basically abort 99 drug shortages this year with regards to
early warning systems. So we believe that is needed.
I am definitely not in favor of regulation when regulation
isn't needed, but honestly, anything that I am putting in my
body or my mouth, I want to make sure that it is manufactured
in the right way, that it is done correctly. And certainly, we
support the FDA in terms of their role in protecting drug
safety within this country. Needless to say, they need to be
able to have the power and the jurisdiction to enforce early
reporting of drug shortages.
And the other thing that I said I think was really most
important is get the word out to everybody at the same time. It
is beyond me sometimes that others have drug product when I
don't have drug product. When drugs come back onto market,
there are only certain places that you can get those drugs from
and you can't get it from your normal supply chain. So again, I
think we need regulation in order to solve the problems that we
have at hand.
Mr. Pitts. Thank you. Mr. Alkire, we have heard that often
the end users of drugs that go into shortage have very little
advanced warning. For example, a surgeon may find out that the
preferred anesthetic drug is not available only after the
patient is prepped and on the operating room table. How does
this happen? How do hospitals give warning of shortages to
their own doctors?
Mr. Alkire. For the most part, now, I have not necessarily
heard that, but for the most part, there is very strong
communication that actually occurs in the hospitals and doctors
are made aware of what is happening from a shortage, especially
as they are doing prep for these procedures. And then they have
to go about figuring out what are the potential clinical
alternatives to ensure that their patients are getting the
highest quality care.
Mr. Pitts. OK. Dr. Penley, how many drugs that you use in
your practice regularly go into shortage? It appears that there
are a finite number of drugs that regularly go into shortage.
Mr. Penley. The current number for oncology drugs is around
23 I believe, and those are very commonly used agents. So we
would use most of them in our practice on a day-in, day-out
basis.
Mr. Pitts. And is there any way, at present, for you to
anticipate a shortage?
Mr. Penley. On a practice level, it is difficult. We get
information the same way most of these folks do, through the
FDA Web site or the hospital pharmacist Web site. ASCO, our
national organization, serves primarily as an information-
gathering and distributing service there for our members, and
certainly at times when we see that they are going to be
prolonged shortages, ASCO convenes expert panels to try to
brainstorm and come up with the best available work-arounds in
situations where we have to make substitutions. We try to bring
together the best minds in oncology so that they can come up
with workable and reasonable solutions for our patients when we
know that those drugs are going to be in shortage for any
length of time.
Mr. Pitts. Thank you. Dr. DiPaola, your description of the
impact of drug shortages on future cancer patients because
clinical trials may have to be stopped or not started in the
first place is quite compelling. You mention that 50 percent of
the cooperative group trials involve drugs that are subject to
shortage. That sounds like it should have a devastating effect
on cancer research. Could you give us an idea of the magnitude
of this problem?
Mr. DiPaola. I think that it is, you know, as we are all
concerned with, you know, the shortage even worsening and
already we are seeing a number of trials even with our cancer
center as an NCI-designated Comprehensive Cancer Center, we
take care of patients with both the best standard treatments
and then offer clinical trials for patients who want that
option. And those clinical trials are geared towards our new
discoveries of new regimens. If a clinical trial is compromised
because it needed to substitute a particular drug for another
drug or, in some cases, clinical trials won't allow a
substitution, all of the work that went into the discovery
getting to the point of the clinical trial is going to be
compromised.
And so, you know, we have made gains on cancer research
overall, but ultimately, the discoveries in terms of the
targets in the lab, the drug development, and then either the
comparison to these existing drugs or the addition of these new
targeted agents to existing drugs make it very, very difficult
to continue this. And I agree, you know, those statistics
relate to data we have been given regarding the cooperative
group trials. Those are usually the large national trials that
do comparisons. And nowadays, most of the trials don't contain
a placebo, so at least the existing drug is part of the
clinical trial. So this already is a very difficult and
concerning problem, and the way the stats are looking, may
worsen.
Mr. Pitts. Thank you. I have gone way over my time. I thank
the ranking member for his indulgence and I will yield to Mr.
Pallone for such time as he may consume.
Mr. Pallone. Thank you, Mr. Chairman. Let me ask unanimous
consent to put in the record this statement from I guess the
Fight Colorectal Cancer group on the U.S. drug shortage. You
have it.
Mr. Pitts. Without objection, so ordered.
[The information follows:]
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Mr. Pallone. And I am going to just go back to what you
said, Mr. Chairman, or follow up on what you asked Dr. DiPaola,
who, as you know, is from my district. The Cancer Institute is
in New Brunswick in my district.
Do you have an example of a clinical trial that was halted
at the Cancer Institute because of the drug shortage? Is there
an actual example at the Cancer Institute of New Jersey where
you had to halt because of the drug shortage?
Mr. DiPaola. Yes. I mean there are actually a number of
examples, trials that we were about to launch that we have
made, you know, the plans and development to start a clinical
trial. Most of them, Congressman Pallone, have to do with
trials where a new drug is added to existing therapies. And we
have had difficulties in at least 1 or 2 trials where a new
drug was added to a combination that included TAXOL as one
particular example. And the trial was held in terms of
initiating the trial. What ends up happening is is in the
clinic, we then have concern in offering patients who actually
come to the center looking for these new options in terms of
clinical trials, the trial when we are not assured of the, you
know, particular drug supply.
There was another trial where a young patient with breast
cancer was enrolled where Doxil was included, along with
another set of combination of drugs, and it required amendment
to the trial to allow the patient to be treated, to change the
drug from Doxil to another agent, which again has concerns
about compromising the trial, and again the delay involved in
trying to look at options and then even change the drug because
in that case the trial allowed.
And then in a number of cases, delayed trials where
doxorubicin was part of the regimen, again with a novel what is
called PARP inhibitor, which in the case I am referring to is
an NCI trial that was delayed. So all of these, you know, taken
together, any one of these, you know, weeks, months delays
really delay us getting an answer. And more importantly,
patients are coming because they are concerned that in that
case, the standard option may not be what they are looking for
enough and they are looking for these options in clinical
trials.
Mr. Pallone. Sure. I mean just give me an idea. I mean how
do you think the drug shortage impacts the future of cancer
research and treatment? I mean are you concerned and, you know,
just in an overall sense?
Mr. DiPaola. Well, I mean I think, you know, it is going to
be important and that is why I think it is important that
everybody get together in a collaborative way to look at all of
the root causes and come up with solutions because it is
concerning, especially if it does worsen. And, at least as
statistics would indicate ,that it is. So I think it is
concerning. I think that we need to keep pushing forward in all
areas of research. I mean as you know well, you know, it
includes the discovery on the basic science end leading into
the efforts of translating into clinical trials. But it is
concerning, especially with the statistics that we are seeing.
Mr. Pallone. OK, thank you.
I wanted to ask Mr. Kafer from Teva a couple things. A
frequent cited reason for shortages is manufacturing problems,
and of course we have heard that sterile injectable drugs are
hard to manufacture. So if your supplier, I guess, has a
problem, that can lead to a shortage. So obviously, there are
circumstances outside of your control that can interfere with
your ability to deliver a product. I mean are these problems
unique to the drugs prone to shortages? For example, are all
sterile injectable drugs prone to shortage or is there
something about these drugs that makes controlling their
manufacture more difficult? Are there things manufacturers can
do to avoid these problems?
Mr. Kafer. I think one of the things you need to understand
from a complexity standpoint, by the nature of a sterile
manufacturing facility, it is sterile and it is a very complex
manufacturing environment. Picture, if you will, people in
spacesuits kind of doing the prep work. If you are in an oral
solid manufacturing facility, it is much different. So there is
more complexity.
The other thing within a manufacturing facility, each
technology has its own defined manufacturing line or
manufacturing suite. For instance, you cannot manufacture
cytotoxic oncology products on the same line you would manage
hormones or something of that nature. Many of the products,
some of them are lyophilized, which is a powder that has a very
unique manufacturing suite. And a liquid fill line is also a
very unique manufacturing suite. So it is possible that within
one manufacturing facility, you have a disruption in just one
suite, one of those technologies. And one of the questions we
have heard repeatedly from the panel is specific to oncology,
and it is a very dynamic complex environment. And
unfortunately, over the last couple of years, industry has had
some disruptions within those manufacturing suites that we are
in the stages of recovery so we are manufacturing product, but
we are in a slow build and it is impacting, obviously, patients
as the panel has testified today.
Mr. Pallone. Of course, we always worry not only today but
in so many cases about active ingredients in drugs sold in the
United States that are supplied from abroad. So I guess I am,
you know, asking you to what extent that is problem and, you
know, in the wake of heparin, of course, there is major concern
about cracking down on some of the ingredients that are sold
abroad. I mean to what extent does the availability of these
ingredients from abroad impact this discussion today? I mean it
is very likely that, you know, we put a lot more regulation and
make it more difficult for things to come from abroad.
Mr. Kafer. Regardless if the materials coming from abroad
or domestically, to your point regarding the heparin scare of
years ago, the testing requirements and scrutiny that we will
go through before we will release the active ingredient into
production is significant, and we will not jeopardize that. So
the testing requirements that we impose on our manufacturing
partners on the API side are significant. And there has been
repeated instances in which we are failing API coming in for
production because they have not met our specifications. If
that does happen on a repeated basis, then you are obviously
going to have a gap in readily available material to produce
product. So without question for good reason that we are
testing that material to the requirements that we are required
to and we will not use it unless it passes those tests.
Mr. Pallone. Now, you heard me earlier mention your
testimony in the context that you and Dr. Kweder, I guess,
acknowledged in your testimony that it can take 2 to 3 years
for FDA to approve a new facility or API supplier, and
obviously, that is not a good situation. However, on the first
panel, they also said that FDA has the flexibility to adjust
resources so that it can approve facilities and suppliers very
quickly. I mean has that been your experience that that
flexibility is exercised or works or are you sort of sticking
to this 2 to 3 years?
Mr. Kafer. The standard process as it exists today
historically has been 2 to 3 years for an API secondary
manufacturer approval or a manufacturing site traditional past.
And, you know, those reviews take time because it is a complex
review and it does require extensive work. At the same time,
yes, we have seen expedited reviews in that area. We have been
the beneficiary of expedited reviews to handle critical
situations.
But also in my earlier statement, in my opening remarks, I
mentioned a lot of the shortages are unforeseen. We are
applying a great deal of coordination and a great deal of
collaboration when we are solving the problem. And as a
standard of practice, is it possible to expedite some of those
reviews as a standard of practice was the point of my written
testimony. But we do see on a routine basis now where
applicable, without jeopardizing the product, you know, we
never jeopardize the product or system, but we have seen
collaboration to expedite those reviews in a matter of months.
Mr. Pallone. And I appreciate that, but I guess what I am
trying to say is, you know, when I mentioned your 2 or 3 years
in your written testimony, I don't want to put words in their
mouth but it was sort of suggested at the first panel that
maybe it is not so much a problem because we can use this
flexibility, but I mean is it your experience that there is
enough flexibility to deal with these situations or not? I mean
I know that is a difficult question. You don't have to say----
Mr. Kafer. I have had experience where we have had
expedited reviews, collaborative work, and favorable outcomes.
You know, the volume of work that could be forthcoming based on
continued remediation, I can't predict and I can't, you know,
forecast that impact. But prior to significant shortages--which
the industry planned for--I mean, so we would plan for a 2-year
review, we knew what that type was, but at the time when we
were just making sure we had redundancy in place for those
critical products, it wasn't of immediate need. Now that we are
seeing immediate need, we are seeing those expedited reviews.
Mr. Pallone. All right. Thanks. I just wanted to ask one
more question of Mr. Colgan here, Mr. Chairman.
In his written testimony he suggested a number of
incentives that might be provided to encourage manufacturers to
stay in the field or enter the field and, of course, I think in
principle that incentives are a good idea. If we can get more
companies to manufacture these products or to produce excess
supply, you would think that shortages would be less likely to
occur and less severe if they do occur. But that being said,
the suggestions in your testimony I think need a little more
fleshing out for me to better understand, you know, what you
are trying to achieve or how you would achieve the goal.
And I know they are only presented as options to be further
explored, but I was puzzled by the suggestion of granting
temporary exclusivity for a new product line of drug either
already in short supply or deemed vulnerable to a shortage
considering that the goal would seem to be to get as many
companies into the field as possible. It would seem that
granting exclusivity would appear to be doing the exact
opposite, and it is my understanding that exclusivity works
best as an incentive when the company is the only one
manufacturing the product, or in the case of a new generic, is
the only company offering a generic alternative to a name
brand. So it is not clear to me that granting exclusivity would
be much of an incentive. And I am not trying to be critical. I
just wanted you to walk me through how you think this would
actually work practically.
Mr. Colgan. Well, there are 2 things here. One is the
generic user fees and we believe those can be utilized to
incent manufacturers to enter in the market or reenter into the
market in producing a product that they have produced before or
not produced. We have drugs that are single-source sometimes or
we have drugs where we don't have enough production and
throughput. In those situations, we think within limits this is
a concept that needs to be explored in terms of some sort of
temporary exclusivity in the market so that there is a period
of time that would incent a manufacturer to get into the market
and produce the product. It could be that the FDA provides
accelerated review of a supplemental NDA to that manufacturer,
allows that manufacturer a period of 6 months or so to put the
product together and produce the product. We see the whole idea
of incenting the industry to jump into the generic market as
being really important.
Let me give you an example of that. Hopefully, that will
play out and you will understand. Right now, we have production
problems with carmustine and we use this in non-Hodgkin's
lymphoma as a conditioning therapy in getting patients ready
for autologous bone marrow transplants. Right now, that is not
a medically necessary drug because we can use bendamustine. If
I have a patient who is on carmustine, I would pay $938 for
that patient's drug if they had a body surface area of 2. For
bendamustine I would pay $14,440. It advantages us to have
other manufacturers in producing carmustine so we have adequate
supplies and some sort of incentive that would allow them to do
that so we are not forced to use bendamustine would be very
important to us in terms of securing a supply line for that
drug. And it certainly adds up to the economics of the
situation, too, in terms of being able to supply a drug that is
category one, recognized as the appropriate treatment for the
patient, but also provides the lowest overall cost continuum of
providing the care to that patient.
Mr. Pallone. All right. Thanks a lot. Thank you, Mr.
Chairman.
Mr. Pitts. The chair thanks the gentleman and that
concludes our round of questioning. Again, I would like to
thank the witnesses for your testimony, for answering the
questions. We will ask you to please respond to any questions
in writing.
In conclusion, I would like to thank all the witnesses and
members for participating in today's hearing and remind members
that they have 10 business days to submit questions for the
record, and then I ask the witnesses to please respond promptly
to the questions. And members should submit their questions by
the close of business on October 7.
There being no further business, the subcommittee is
adjourned.
[Whereupon, at 2:18 p.m., the subcommittee was adjourned.]
[Material submitted for inclusion in the record follows:]
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