[Senate Hearing 112-885]
[From the U.S. Government Publishing Office]
S. Hrg. 112-885
PRESCRIPTION DRUG SHORTAGES: EXAMINING A PUBLIC HEALTH CONCERN AND
POTENTIAL SOLUTIONS
=======================================================================
HEARING
OF THE
COMMITTEE ON HEALTH, EDUCATION,
LABOR, AND PENSIONS
UNITED STATES SENATE
ONE HUNDRED TWELFTH CONGRESS
FIRST SESSION
ON
EXAMINING THE PRESCRIPTION DRUG SHORTAGES, FOCUSING ON EXAMINING A
PUBLIC HEALTH CONCERN AND POTENTIAL SOLUTIONS, AND IF THE FOOD AND DRUG
ADMINISTRATION'S ABILITY TO RESPOND SHOULD BE STRENGTHENED
__________
DECEMBER 15, 2011
__________
Printed for the use of the Committee on Health, Education, Labor, and
Pensions
Available via the World Wide Web: http://www.gpo.gov/fdsys/
----------
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Washington, DC 20402-0001
COMMITTEE ON HEALTH, EDUCATION, LABOR, AND PENSIONS
TOM HARKIN, Iowa, Chairman
BARBARA A. MIKULSKI, Maryland MICHAEL B. ENZI, Wyoming
JEFF BINGAMAN, New Mexico LAMAR ALEXANDER, Tennessee
PATTY MURRAY, Washington RICHARD BURR, North Carolina
BERNARD SANDERS (I), Vermont JOHNNY ISAKSON, Georgia
ROBERT P. CASEY, JR., Pennsylvania RAND PAUL, Kentucky
KAY R. HAGAN, North Carolina ORRIN G. HATCH, Utah
JEFF MERKLEY, Oregon JOHN McCAIN, Arizona
AL FRANKEN, Minnesota PAT ROBERTS, Kansas
MICHAEL F. BENNET, Colorado LISA MURKOWSKI, Alaska
SHELDON WHITEHOUSE, Rhode Island MARK KIRK, Illinois
RICHARD BLUMENTHAL, Connecticut
Daniel Smith, Staff Director
Pamela Smith, Deputy Staff Director
Frank Macchiarola, Republican Staff Director and Chief Counsel
(ii)
C O N T E N T S
__________
STATEMENTS
THURSDAY, DECEMBER 15, 2011
Page
Committee Members
Harkin, Hon. Tom, Chairman, Committee on Health, Education,
Labor, and Pensions, opening statement......................... 1
Enzi, Hon. Michael B., a U.S. Senator from the State of Wyoming,
opening statement.............................................. 2
Kirk, Hon. Mark, a U.S. Senator from the State of Illinois....... 8
Franken, Hon. Al, a U.S. Senator from the State of Minnesota..... 9
Merkley, Hon. Jeff, a U.S. Senator from the State of Oregon...... 9
Isakson, Hon. Johnny, a U.S. Senator from the State of Georgia... 10
Bennet, Hon. Michael F., a U.S. Senator from the State of
Colorado....................................................... 10
Bingaman, Hon. Jeff, a U.S. Senator from the State of New Mexico. 11
Blumenthal, Hon. Richard, a U.S. Senator from the State of
Connecticut.................................................... 11
Whitehouse, Hon. Sheldon, a U.S. Senator from the State of Rhode
Island......................................................... 12
Casey, Hon. Robert P., Jr., a U.S. Senator from the State of
Pennsylvania................................................... 40
Prepared statement........................................... 41
Hatch, Hon. Orrin G., a U.S. Senator from the State of Utah...... 43
Hagan, Hon. Kay R., a U.S. Senator from the State of North
Carolina....................................................... 45
Mikulski, Hon. Barbara A., a U.S. Senator from the State of
Maryland....................................................... 47
Prepared statement........................................... 47
Guest Senate Member
Klobuchar, Hon. Amy, a U.S. Senator from the State of Minnesota.. 3
Prepared statement........................................... 5
Witnesses--Panel I
Glied, Sherry, Ph.D., Assistant Secretary For Planning and
Evaluation, Department of Health and Human Services,
Washington, DC................................................. 13
Prepared statement........................................... 14
Kweder, Sandra, M.D., Deputy Director, Office of New Drugs, FDA,
Washington, DC................................................. 18
Prepared statement........................................... 21
Witnesses--Panel II
Crosse, Marcia G., Ph.D., Director, Health Care, Government
Accountability Office, Washington, DC.......................... 49
Prepared statement........................................... 51
Aitken, Murray, Senior Vice President, Healthcare Insight, IMS,
Parsippany, NJ................................................. 56
Prepared statement........................................... 57
Neas, Ralph G., J.D., Chief Executive Officer, Generic
Pharmaceutical Association, Washington, DC..................... 66
Prepared statement........................................... 67
Maris, John M., M.D., Chief, Division of Oncology, Children's
Hospital of Philadelphia, PA................................... 72
Prepared statement........................................... 74
(iii)
ADDITIONAL MATERIAL
Statements, articles, publications, letters, etc.:
Jerry A. Cohen, M.D., President, American Society of
Anesthesiologists; and Arnold J. Berry, M.D., M.P.H., Vice
President for Scientific Affairs, American Society of
Anesthesiologists, Washington, DC.......................... 85
Response by the Department of Health & Human Services, Food
and Drug Administration to questions of:
Senator Casey............................................ 87
Senator Blumenthal....................................... 90
Senator Enzi............................................. 91
Senator Burr............................................. 93
Senator Hatch............................................ 93
PRESCRIPTION DRUG SHORTAGES: EXAMINING A PUBLIC HEALTH CONCERN AND
POTENTIAL SOLUTIONS
----------
THURSDAY, DECEMBER 15, 2011
U.S. Senate,
Committee on Health, Education, Labor, and Pensions,
Washington, DC.
The committee met, pursuant to notice, at 10:05 a.m. in
Room 106, Dirksen Senate Office Building, Hon. Tom Harkin,
chairman of the committee, presiding.
Present: Senators Harkin, Mikulski, Bingaman, Casey, Hagan,
Merkley, Franken, Bennet, Whitehouse, Blumenthal, Enzi,
Isakson, Hatch, and Kirk.
Also Present: Senator Klobuchar.
Opening Statement of Senator Harkin
The Chairman. Good morning. The Senate Committee on Health,
Education, Labor, and Pensions will come to order.
Today's hearing focuses on a serious public health issue in
the United States. That's the growing problem of prescription
drug shortages. For the past several years, hospitals across
the country have experienced an increasing number of shortages
of life-sustaining prescription drugs. Today we're going to
examine the cause of the shortages and explore potential
solutions.
The harsh reality is, the problem is getting dramatically
worse. The number of prescription drug shortages in the United
States has tripled over the past 5 years. Over 80 percent of
these shortages involve generic sterile injectables, including
critical products used for chemotherapy, emergency medicine,
anesthesia, and intravenous feeds. Many of these products are
absolutely essential for the treatment of serious diseases, and
shortages in anesthetic products are adversely affecting even
the most routine surgeries.
As hospitals encounter difficulties in securing an adequate
supply of critical drugs, it forces doctors to ration their
supply of medication, delay medical procedures, and use
alternative products that may have unwanted side effects. In
some instances, drug shortages also compel medical
practitioners to rely on foreign versions of drugs that have
not been reviewed by the FDA and not approved for use in the
United States.
For patients, drug shortages can literally be a matter of
life or death. To cite one example, Al Wegner of Ionia, IA
wrote to inform me that a drug he received to treat his colon
and prostate cancer is now in shortage and will run out by the
end of the year.
In May, Senator Enzi and I convened a bipartisan working
group to evaluate the issue of shortages and identify potential
legislative solutions. Between the work of that group and our
discussions today, I'm hopeful that we can agree on meaningful
bipartisan solutions to address this complex problem.
In May, along with Senators Casey and Blumenthal, I wrote
to the Government Accountability Office to request a report on
the drug shortage problem and potential solutions. GAO issued
its report this morning. Marcia Crosse, Director of GAO's
health care team, is here to discuss that, including its
recommendations.
I also look forward to hearing from our other witnesses who
bring to this discussion a wide range of experiences and
perspectives, and I thank you all for being here.
I also want to acknowledge and thank our distinguished
Ranking Member, who has been a key leader here in the Senate in
addressing this issue.
I will yield to Senator Enzi for an opening statement.
Opening Statement of Senator Enzi
Senator Enzi. Thank you, Mr. Chairman. Thanks for having
this hearing.
As a result of recent drug shortages, patients all over the
United States are forced to delay their treatment or use
second-best alternatives. Clinical trials that use these drugs
are being stalled, preventing possible new treatments from
coming to market. The pharmaceuticals in shortage are complex
to manufacture and treat a variety of conditions in different
settings. They have always been vulnerable to shortage.
However, these shortages are now more widespread.
Currently, FDA lists over 200 products in short supply.
These shortages result in increased costs for patients, the
Government providers, researchers, and worse outcomes for
patients. Generic drugs make up the majority of drugs in
shortage, and many are inexpensive. While we must move as
quickly as possible to get these life-saving drugs to the
patients that need them, it's important that we understand the
causes that lead to this tragic problem.
There are conflicting opinions on how economics,
regulation, and supply-chain management contribute to the
shortages we see today. I understand this is a complex,
multifaceted issue, and I look forward to hearing from all our
witnesses today to help clarify the root causes and describe
possible next steps.
Only once we understand the causes should we craft a
solution. There are many alternative policy options being
discussed. My colleague, Senator Klobuchar, and Senator Hatch
have been leaders in this area, but their proposals address
very different problems. We must keep in mind possible
unintended consequences as we move forward.
My staff has been participating on a bipartisan working
group for months, meeting with the stakeholders, investigating
the causes, and developing solutions. I look forward to seeing
the group's proposal in the next few months. I understand that
the generic pharmaceutical industry is also working to come up
with a solution to address supply interruptions as well, and I
look forward to hearing more about that today.
There is bipartisan desire to implement a solution that
will not only mitigate shortages in the short-term but address
underlying causes so we don't find ourselves in this tragic
situation again. I look forward to working with my colleagues
on and off the committee to do this as quickly as possible
without compromising the quality of the policy.
I'm concerned, however, that the FDA could be doing more to
address these shortages now. The Government Accountability
Organization says their management remains a barrier, and new
record-keeping methods would not improve communication within
the agency. Further, GAO says there has not been a systematic
review of all applications currently waiting for approval to
see if they are relevant to the shortages.
As a first step, FDA should expedite the review of any
application for drugs in shortage. I find it troubling that we
do not know how many applications relevant to shortages are
waiting for FDA review and look forward to exploring any
barriers that are currently preventing the agency from
identifying and expediting these applications.
That being said, I want to commend the work of the Drug
Shortages Office of the Food and Drug Administration. Until
recently, this office only had four members. Yet, when provided
information about shortages, they have been able to assist in
communication and finding solutions with the manufacturers in
some cases. I only hope that this sort of collaboration among
offices in FDA and industry will continue after the public
health emergency is resolved.
Looking back a few years, multiple companies shut down
capacity at the same time. Increased coordination may have
helped to prevent some of the situations we find ourselves in
today.
Thank you for convening this important hearing, and I look
forward to discussing what steps we can take to solve this
tragic problem.
The Chairman. Thank you very much, Senator Enzi.
We'd like to start off by welcoming our esteemed colleague,
Senator Klobuchar from Minnesota. She's been a leader in this
effort and has introduced an important bill on this issue with
Senator Casey. It's called the Preserving Access to Life-Saving
Medications Act.
Senator Klobuchar, we're pleased to have you here this
morning. Your statement, of course, will be made a part of the
record in its entirety, and please proceed as you so desire.
Statement of Senator Klobuchar
Senator Klobuchar. Thank you very much, Chairman Harkin,
Ranking Member Enzi, Senator Kirk. Thank you very much for
starting the working group and being devoted to doing something
about this issue. It's something that experts are seeing as an
unprecedented shortage in drugs, forcing some patients to delay
their treatments, using unproven alternatives or, sadly in some
cases, drug shortages have even resulted in patient deaths.
Over a year ago I heard about this first. I think Senator
Harkin, from the Midwest, understands our people are loud and
call their officials when things go wrong, and I couldn't
believe the number of pharmacists, and also doctors and patient
groups, that came to our office seeking help. And as the year
went on, I think more and more of my colleagues heard about
this from people in their own States.
Just a few months ago I met a young boy named Axel Zirbes.
Alex Zirbes is a little 4-year-old boy with bright eyes and a
big smile. He also happens to have no hair on his head, and
that's because he's being treated for leukemia. When he was
scheduled to start chemotherapy earlier this year, Axel's
parents learned that an essential drug, cytarabine, was in
short supply and might not be available for their son.
Obviously, this threw them into a panic. They started calling
themselves all over the country. The pharmacists were trying,
the doctors were trying, and they actually made plans to go to
Canada so he could get his chemotherapy treatment.
Well, at the last minute, the hospital was able to secure
the medication from a pharmacy that still had a supply. But I
think you all know, Axel and his parents are not alone, and not
every story has turned out as good as that one.
As you know, there were 178 drug shortages reported in 2010
and already 231 reported as of this November. Look at that
dramatic increase. When you go back 5 years, there were only 55
drug shortages. So the facts speak for themselves.
For some of these drugs, no substitutes are available. Or,
if they are, they're less effective. A survey conducted by the
American Hospital Association showed that nearly 100 percent of
their hospitals experienced a shortage.
It is clear that there are a large number of overlapping
factors, as Senator Enzi discussed, that are resulting in
unprecedented shortages. Experts cite a number of factors.
Market consolidation and poor business incentives,
manufacturing problems and production delays, unexpected
increases in demand for a drug, inability to procure raw
materials, and even the influence, the very unfortunate
influence as of late, of a ``gray market.''
However, when drugs are made by only a few companies, a
decision by one drug maker can have a large impact.
Therefore, to help correct a poor market environment or to
prevent ``gray market'' drugs from contaminating our medication
supply chain, we must address the drug shortage problem at its
root.
As was mentioned, I introduced the Preserving Access to
Life-Saving Medications Act with Senator Casey of Pennsylvania.
Susan Collins joined us, and many others, and so the bill now
has bipartisan support. The bill would require drug
manufacturers to provide early notification to the FDA whenever
there is a factor that may lead to a shortage.
And I would agree with Senator Enzi that it's very
complicated to look at what these causes are and to figure out
the long-term solutions. But I believe that the short-term
solution has already been proven to work. When you look at the
numbers with the FDA, in the last 2 years the FDA, with early
notification and more information, has successfully prevented
137 drug shortages.
So when we went to them to try to figure out what we can do
to at least address this immediate problem, they said, ``Look,
what we're doing works, but we don't really necessarily have
the tools and the authority to be able to do this across the
board,'' and that's why we came up with the idea of doing it
beyond orphan drugs to doing it sooner so that they get the
information sooner, because the sooner they get the
information, the more they're going to be able to respond and
get something done.
In addition to adding more sponsors and the good working
group that you've set up since the time that we introduced this
bill, two major things have happened. The administration, the
President has endorsed this bill. The House has taken on a very
similar bill, led by Representative DeGette. The President's
Executive order, I should note, took steps toward advancing the
goals. But he made clear at the same time that Congress must
still act in order to protect patients and ensure consumers
have access to these life-saving medications.
The second major change is that today the FDA is announcing
a rule that would expand shortage notification for sole-source
manufacturers. This is clearly a step in the right direction,
but I would argue we still need to get this legislation done
because we have the issue that we have manufacturers that are
not sole-source that have also been involved in drug shortage
situations. So there is good reason to continue to work to pass
this legislation.
And then it also has been noted by both the Chairman and
the Ranking Member that we need to continue the work of the
working group to look at the long-term solutions to this
problem.
I would just add when you look at the eyes of that little
4-year-old balding boy and you realize that his whole family
was put in a panic, or you meet some of the patients that I've
met, or the pharmacists who are already under-staffed and are
dealing with very difficult times in health care, the last
thing we want to do is to have hospitals, doctors, or
pharmacists running around literally spending half a day trying
to find one dose of a medication. This is no way to run a
railroad.
I really appreciate the committee's willingness to look at
this issue. I would urge you to move our legislation as soon as
possible as a short-term solution, and then continue the long-
term work that needs to be done to get at the underlying root
causes of this problem.
Thank you very much, Mr. Chairman, for allowing me to speak
today. Thank you for all the Senators that have come today. We
now have six of you here, so I know we can solve this problem,
and I look forward to working with all of you. Thank you very
much.
[The prepared statement of Senator Klobuchar follows:]
Prepared Statement of Senator Klobuchar
Chairman Harkin, Ranking Member Enzi, and my fellow
colleagues on the HELP Committee--I am glad that this hearing
is being held today to discuss causes and solutions to the drug
shortage crisis. I appreciate the opportunity to join you all
and briefly share my thoughts and experiences after having
worked on this issue for the past year.
The country is facing what experts are calling a ``crisis''
with ``unprecedented'' shortages for a record number of
essential drugs. Drug shortages have impacted individuals all
across the country--forcing some patients to delay their life-
saving treatments or use unproven, less-effective alternatives.
In some cases, drug shortages have even resulted in patient
deaths.
Because of the urgency of this issue, this morning the FDA
announced an Interim Final Rule that will require manufacturers
to provide early notification to the FDA so the agency can work
with manufacturers, hospitals, pharmacists, and patients to
find ways to prevent drug shortages.
Having this information will help FDA take steps necessary
to find appropriate alternatives, aid manufacturers in
correcting manufacturing problems, and help providers and
patients maintain the care they need and deserve.
The legislation that I introduced with Senator Casey, The
Preserving Access to Life-Saving Medications Act, would require
drug manufacturers to provide early notification to the FDA
whenever there is a factor that may lead to a shortage. And it
is helpful that the FDA followed our leadership and took the
steps they did today to speed this process along.
This is something I have been working on for over a year
when I first heard from hospitals, pharmacists, and patients
from Minnesota that they were facing shortages in essential
medications--specifically to chemotherapy drugs. Their urgency
caused me to send a letter to FDA Commissioner Hamburg urging
the FDA to take actions to address this public health crisis.
Over the next few months, I continued to receive calls from
constituents asking for help in finding medications in short
supply. I worked with manufacturers, stakeholders, and the FDA
to try to find an appropriate solution to ensure that patients
continued to receive the care they needed and deserved.
Just a few months ago, I met a young boy named Axel Zirbes.
Axel Zirbes is a cute 4-year-old boy from the Twin Cities with
bright eyes and a big smile. He also happens to have no hair on
his head. That's because Axel is being treated for leukemia.
When he was scheduled to start chemotherapy earlier this
year, Axel's parents learned that an essential drug, cytarabine
(sye-TARE-a-been), was in short supply and might not be
available for their son. Understandably, they were thrown into
a panic and desperately looked for any available alternatives.
They even prepared to take Axel to Canada, where cytarabine
(sye-TARE-a-been) was still readily available.
Fortunately, it didn't come to that. At the last minute,
the hospital was able to secure the medication from a pharmacy
that still had a supply.
But Axel and his parents are not alone.
As you know, there were 178 drug shortages reported in 2010
and already 231 reported as of this November--a dramatic
increase from 55 just 5 years ago.
For some of these drugs, no substitutes are available. Or,
if they are, they're less effective and may involve greater
risks of adverse side effects. The chance of medical errors
also rises as providers are forced to use second- or third-tier
drugs that they're less familiar with.
A survey conducted by the American Hospital Association
showed that nearly 100 percent of their hospitals experienced a
shortage. Another survey, conducted by Premier Health System,
showed that 89 percent of its hospitals and pharmacists
experienced shortages that may have caused a medication safety
issue or error in patient care.
It is clear that there are a large number of overlapping
factors that are resulting in unprecedented shortages. Experts
cite a number of factors that are responsible for the
shortages. These include market consolidation and poor business
incentives, manufacturing problems and production delays,
unexpected increases in demand for a drug, inability to procure
raw materials, and even the influence of the ``gray market''.
However, when drugs are made by only a few companies, a
decision by any one drugmaker can have a large impact.
Therefore, to help correct a poor market environment or to
prevent ``gray market'' drugs from contaminating our medication
supply chain, we must address the drug shortage problem at its
root.
As I mentioned, the bill I introduced with Senator Casey
will require manufacturers to provide early notification to
FDA. But it will also direct the FDA to provide up-to-date
public notification of any actual shortage situation and the
actions the agency would take to address them.
Additionally, the bill requires the FDA to develop an
evidence-based list of drugs vulnerable to shortages and to
work with the manufacturers to come up with a continuity of
operations plan to address potential problems and add
redundancies to protect against potential shortages.
The bill would also direct the FDA to establish an
expedited reinspection process for manufacturers of a product
in shortage.
With manufacturers providing early notification, the FDA's
Drug Shortage Team can then appropriately use their tools to
prevent shortages from happening. In the last 2 years, the FDA,
with early notification and more information, has successfully
prevented 137 drug shortages.
And while the Executive order the President issued in
October took steps toward advancing these goals, he has made
clear that Congress must act in order to protect patients and
ensure consumers have access to the life-saving medications
that they need and deserve.
I understand that this may be a short-term solution to a
long-term problem. That's why I have been working with several
of my colleagues on this committee to come up with a broad,
permanent solution--one that includes methods to address the
root causes of drug shortages.
At the urging of this bipartisan working group, the FDA
held a public workshop in September that brought together
patient advocates, industry, consumer groups, health care
professionals, and researchers to discuss the causes and impact
of drug shortages and possible strategies for preventing or
mitigating future shortages.
In addition to the workshop, I have been speaking with a
broad range of stakeholders to try to discover why we have seen
such a large number of shortages over the past few years.
I have also urged FDA to improve their communication with
patients and providers. This will ensure that patients and
doctors are not the last to know when there is a shortage.
This current explosion of shortages appears to be a
consequence of a lack of supply of certain products to keep up
with a substantial expansion in the scope and demand for those
products.
Due to the complex nature of these drug shortages, there is
no single or simple solution that will solve all problems. A
solution will require all stakeholders to play a role in
mitigating future drug shortages.
That includes increased and transparent coordination
between the offices in the FDA responsible for drug shortages,
compliance, and new drug applications.
That includes better recordkeeping and communication
between the drug manufacturers and the FDA.
And it must include methods to ensure that we have the
manufacturing capabilities to keep up with demand. One solution
may be to provide tax credits to incentivize manufacturers to
upgrade their production capabilities or to remain in or join
the market.
But one thing is clear: This is a national public health
crisis that must be addressed. I will continue to work with my
colleagues in the committee and in the Senate to try to develop
a broad and permanent solution and urge my colleagues to
support this legislation that will help ensure access of needed
medications for our Nation's patients.
Thank you.
The Chairman. Senator Klobuchar, thank you very much for
your statement and your leadership on this issue.
I know you have other committee business that you have to
attend to, so thank you very much for being here, and we look
forward to working with you as we try to resolve this issue.
Senator Klobuchar. Thank you.
The Chairman. Thanks, Senator Klobuchar.
I thought I would call the first panel up, and that would
be Dr. Sherry Glied, Dr. Sandra Kweder, and that's it, those
two up for our first panel.
Before I do that, we have usually a rule in this committee
that we don't have opening statements and stuff, but I know
this is an issue that a lot of people have weighed in on and
have great concerns about, and I thought I would allow
Senators, if they would like, to make short comments on this
before we turn to our panel.
[Pause.]
So, I would yield. The order of appearance is Senator Kirk,
Senator Franken, Senator Merkley, Senator Isakson, and Senator
Bennet.
If you had a short comment, I'd be more than willing to
entertain comments, Senator Kirk.
Statement of Senator Kirk
Senator Kirk. Thank you. I very much appreciate this
hearing. An ex-staffer of mine was just diagnosed with lymphoma
type B. As everyone knows who fights that, you take a four-drug
regimen called R-CHOP, and that includes doxorubicin, which is
generic, only three suppliers, and in short supply. And so I'm
very much looking forward to this hearing. I applaud Senator
Klobuchar's legislation.
We want to make sure that the very large FDA bureaucracy
does not generate a decision, because of manufacturing
regulations or others, that issues a completely unbalanced
decision to shut down supply, so that the patient that I know
so well does not have doxorubicin to fight lymphoma.
And so I applaud you, and I think this is a very important
hearing and hope to back legislation on this. Thank you, Mr.
Chairman.
The Chairman. Thank you, Senator Kirk. Thanks for your
leadership on this.
Senator Franken, I want to thank you also for your
leadership on this issue. You've been heavily involved in this,
and I appreciate it. Any comments?
Statement of Senator Franken
Senator Franken. Thank you, Mr. Chairman. I'm glad to have
the opportunity to discuss this critical problem, and I want to
thank my senior Senator, Senator Klobuchar, for her leadership
on this.
As you know, prescription drug shortages are affecting the
care that patients in Minnesota and across the Nation receive,
and in some cases it is truly a matter of life and death, as
Senator Kirk so personally discussed.
I recently talked to a doctor from Minnesota who told me
that a chemotherapy that she uses with her patients is
currently in shortage. For new patients, she's going to have to
recommend a treatment that may not be as effective, and for
patients currently on the chemo, she's going to have to switch
them to a different treatment. She told me that when she has to
change a patient from a chemo that is working to a new
treatment, the new chemo has only a 1 in 3 chance of working
the first time, 1 in 3. Imagine telling that to your patient.
Imagine being the patient.
As I'm sure we'll hear from the expert witnesses, this
issue is not simple. There is no one cause or one solution. I
am proud to participate in a bipartisan working group of
members of this committee that is looking at legislative
proposals to address these critical shortages, and I am a co-
sponsor of the legislation introduced by Senators Klobuchar and
Casey that will require drug manufacturers to let the FDA know
when they may discontinue a drug. This legislation is an
important first step while we work toward ways to address this
issue on a larger scale.
Mr. Chairman, thank you again for holding this important
hearing. I look forward to hearing the expert testimony today
and to continue to work with you to preserve access to life-
saving drugs in Minnesota and across our Nation. Thank you.
The Chairman. Thank you, Senator Franken.
Senator Merkley.
Statement of Senator Merkley
Senator Merkley. Thank you, Mr. Chairman. Thank you for
sponsoring this hearing. I applaud Senator Klobuchar and
Senator Casey for helping highlight this issue, put a spotlight
on it. It's certainly of extreme concern in the health care
system throughout the country.
In November I held a roundtable discussion at the Oregon
Health and Sciences University to hear from Oregonians who have
been directly impacted. I heard from a patient who was 6 months
into his treatment for multiple myeloma when he was suddenly
told that the drugs were no longer available. And at first it
was you can't come in this day of the week, come in 2 days
later; and then it was they're not available at all. And this
is happening thousands of times a week across this Nation.
Suddenly you have a patient in the middle of a drug
regimen. The spouse is wondering what can I do to help acquire
these medicines. Do I get on the Internet? Do I call hospitals
throughout this country? The patient, who should be focusing
all of their mental energy on healing, is suddenly
extraordinarily stressed, the worst possible situation for
actually healing and taking advantage of the regimen.
It isn't just that it's stressful. It's that it possibly
destroys the effectiveness of the treatment regimen both
because of the unavailability and because of the stress.
And certainly doctors and pharmacists express that getting
access to drugs that are in shortage takes up an extraordinary
amount of their time and energy, which is hugely inefficient
for the system. They also talked about how, over the last
couple of years, the situation has gotten so much worse that
there have been changes, and that's what this hearing is about,
understanding it better, because it's absolutely counter-
productive and unacceptable.
I look forward to hearing from the experts and working with
my colleagues on both sides of the aisle who expressed a lot of
concern about this. Thank you.
The Chairman. Thank you, Senator.
Senator Isakson.
Statement of Senator Isakson
Senator Isakson. I commend you on calling the hearing. This
is a preeminent issue in my State of Georgia.
The Chairman. Thank you, Senator Isakson.
Senator Bennet.
Statement of Senator Bennet
Senator Bennet. Thank you, Mr. Chairman and the Ranking
Member. Thanks for holding this hearing. It's actually been
great to hear the comments from my colleagues up here because
we are seeing exactly the same thing in Colorado. You know, the
FDA has been notified about 220 drug shortages this year, and
we know that the number of patients this affects is monumental.
For cancer alone, over 550,000 patients are currently affected
by our national drug shortage crisis.
In Colorado, I can tell you that our patients and providers
are extremely frustrated. A pharmacist at St. Mary's Hospital
in Grand Junction told us that he keeps a 2-page list of 50
drugs that he can't get or barely can get hold of, including 12
chemotherapy drugs. Our own Colorado Cancer Research Program
has held public forums in places like Denver and Colorado
Springs with hundreds in attendance, trying to mobilize
advocates and find consensus around solutions.
Like everyone else on this panel, I have gotten letters and
calls from people suffering from cancer in my State saying what
are you doing about these drug shortages? The last thing that
people who are suffering from cancer should be doing is
spending time having to call their Senators to say how do I get
my drugs.
Mr. Chairman, this is a vital issue, a critical problem in
all of our States, and I think we need to come together in the
HELP Committee in a bipartisan way and make sure we're
addressing it. We will continue to provide you and the Ranking
Member with the work that's being done in Colorado in the Drug
Shortage Working Group with additional ideas for consideration.
I look forward to the testimony today.
Thank you, Mr. Chairman, for holding what I consider one of
the most important hearings we've had since I've been here.
The Chairman. Thank you, Senator Bennet.
Senator Bingaman, any statements or any comments?
Statement of Senator Bingaman
Senator Bingaman. Mr. Chairman, I will not have comments. I
look forward to the hearing and congratulate you for calling
the hearing.
The Chairman. Thank you very much.
Senator Blumenthal.
Statement of Senator Blumenthal
Senator Blumenthal. I also look forward to the hearing and
want to thank the Chairman for having it. It is a subject that
certainly impacts Connecticut, where the workhorse medicines--
and that is a term that the docs have used in describing them
to me--are chronically in short supply. Our hospitals are
scrambling to meet the needs of patients.
I have read the testimony that we are going to be presented
today, and I have to say right at the outset that I think that
much more drastic and far-reaching and aggressive measures are
necessary than have been proposed in any of the testimony, any
of the GAO report that has been submitted so far.
We have a working group here that has been laboring on this
issue, but I am determined that at least I will be proposing
more aggressive measures that are necessary to crack down on
what appear to be anti-consumer practices.
This market is simply not working. It cannot be allowed to
continue in the dysfunctional fashion that it is right now. It
is in many respects similar to the kind of monopolistic or
oligarchic markets that we've seen in other areas where
essential products are, in effect, manipulated according to
price and supply, and these are essential products.
The shortages are creating a public health menace, and the
anti-consumer practices clearly promote a gray market, so-
called gray market that drastically inflates prices and
contributes to the shortages. We ought to have zero tolerance
for this kind of profiteering and price gouging, and we ought
to do whatever is necessary to assure supplies, adequate
supplies of these drugs. Whether it's oncology or
anesthesiology, these drugs are needed and they should be
provided, and stronger governmental action seems to be
absolutely necessary.
Thank you, Mr. Chairman.
The Chairman. Thank you, Senator Blumenthal.
Senator Whitehouse.
Statement of Senator Whitehouse
Senator Whitehouse. Mr. Chairman, thank you. I just wanted
to add to the record of these proceedings that in Rhode Island,
we're getting reports that it tends to be vulnerable
populations that are going without or facing the risk of not
having the prescription drugs that they need.
We've heard from the medical society that pediatricians are
feeling a particular pinch, and one particular Rhode Island
institution that we are very proud of is Women and Infants
Hospital, which is really renowned throughout the region. We
have people fly in from other States and countries to take
advantage of the highly specialized care available there. It is
a world-class facility, and they are facing drug shortages in
chemotherapy, in anesthesia, and in things as simple as parent-
child nutrition, potassium and magnesium, things like that.
There's a drug called doxil that is in such short supply
that Women and Infants now has a waiting list for new cancer
patients that require that drug, and to meet their existing
need they've had to go into the gray market that Senator
Blumenthal referred to, which is way above market price and is
a market in which people believe a certain amount of hoarding
and gaming for price gouging purposes is taking place.
This is hitting home in Rhode Island, and so I'm very
grateful to you, Mr. Chairman, for holding this hearing. Thank
you.
The Chairman. Thank you, Senator Whitehouse.
I thank all the Senators. This is such an important issue,
I just thought it worthwhile for every Senator to express
himself on this issue before we get to our panels, and so I
appreciate that very much.
We'll call our first panel. Dr. Glied and Dr. Kweder,
please come to the table. I have Dr. Glied on this side and Dr.
Kweder on that side.
Our first witness is Dr. Sherry Glied, the Assistant
Secretary for Planning and Evaluation with U.S. Department of
Health and Human Services. Dr. Glied provides guidance and
economic analysis to the Department on Health Policy. In
October her office issued a report entitled Economic Analysis
of the Cause of Drug Shortages.
She has previously served as a senior economist for health
care policy on the President's Council of Economic Advisors
under Presidents Bush and Clinton.
Dr. Glied, we thank you for being here today.
Next we have Dr. Sandra Kweder, Deputy Director of the
Office of New Drugs in the Center for Drug Evaluation and
Research in the Food and Drug Administration. As you can tell
by her uniform, Dr. Kweder is a career public health officer
who works on a daily basis at FDA to ensure that drugs we use
in this country are safe and effective for their intended uses.
Her duties also include supervising FDA's Office of Drug
Shortages.
We have two people who are quite knowledgeable about this
issue, and we appreciate your being here.
We'll start with you, Dr. Glied.
I'll just say, both of your statements will be made a part
of the record in their entirety. If you could sum up in 5, 6, 7
minutes, we'd appreciate it. Then we can get into a discussion.
Dr. Glied, please proceed.
STATEMENT OF SHERRY GLIED, Ph.D., ASSISTANT SECRETARY FOR
PLANNING AND EVALUATION, DEPARTMENT OF HEALTH AND HUMAN
SERVICES, WASHINGTON, DC
Ms. Glied. Thank you, Mr. Chairman, members of the
committee. I'm honored to be here today to discuss the work
we've been doing at ASPE on the economics of this terrible
problem of drug shortages, and I'm going to confine my remarks
today to just two points.
First, why are there shortages in the market for some
medically necessary drugs when shortages are not a feature of
the U.S. economy in general? We don't usually see those in
other markets.
Shortages of most products in most markets lead prices to
rise, and those increases in price cause consumers to buy less
of a product, and they lead producers to manufacture more of
it. That process does not happen in these markets.
The problem is not the prices. Our analyses show that the
prices of drugs in these markets do rise in response to
shortages in just the same way they do in other markets. But
these short-run price increases have very little impact on
either the demand for these products or on their supply.
On the demand side, by definition, these drugs are
medically necessary, so treatment patterns don't change very
much even when prices rise, and that's what we would like to
see.
On the supply side, the kinds of drugs that we now see in
shortage are produced using costly, very specialized equipment.
Building a new production line and increasing capacity in this
market takes several years and can cost hundreds of millions of
dollars. In the short run, manufacturers can and do respond to
price increases by switching among the approved product within
a class using the same production line or factory. So if you
think about these production lines, they can produce many
different drugs within a class, and the manufacturers can
switch among them.
Unfortunately, switching among products often just shifts
the shortage from one drug in a class to another drug in the
same class.
Manufacturers can also respond to price increases by
increasing the level of capacity utilization in their plants,
moving from, say, two shifts a day to three. But we've learned
that most manufacturers in this sector today are operating at
full capacity, essentially 24/7, and operating 24/7 can limit
their ability to keep their plants in good working order and
may be contributing to the quality problems that we're seeing
in this sector.
Now, in the longer run, manufacturers can expand capacity
if they see a profitable market ahead of them. In our analyses,
we found that the market for sterile injectable generic drugs,
cancer drugs in particular, is robust and is growing. Over the
last 5 years, the size of the overall generic sterile
injectable market expanded by over 50 percent, and they
anticipate to grow even further. And manufacturers are
responding to this anticipated growth. Several have told us
that they are investing substantially to upgrade existing
facilities and to build new facilities to serve this growing
market. Those facilities are not likely to be online for the
next year to 3 years, however.
The second point I wanted to touch on is the source of the
prices in this market. Unlike the situation with most drugs in
the United States, sterile injectable drugs are not purchased
directly by patients, and they are not reimbursed directly by
insurance. Rather, these drugs are purchased by health care
providers, by doctors and hospitals, who are paid for the
delivery of the service that includes the drug, and they are
sometimes also paid a separate fee to compensate for the cost
of procuring the drug. They obtain the drugs, in turn, through
group purchasing organizations, which negotiate prices with
manufacturers on behalf of their clients.
Group purchasing organizations compete among themselves to
negotiate the lowest possible price at which they can get an
adequate supply of drugs from manufacturers. That single
negotiated price applies to the hospital or physician's
purchases of that drug regardless of the insurance held by the
patient who ultimately uses the drug.
As we think about strategies to address this problem of
shortages, it's important to keep in mind these two points,
first, that supply across the sector does not increase in the
short run in response to price increases, and that there is a
very sharp disconnect between the fees paid to providers and
the amount that group purchasing organizations pay to
manufacturers.
In summary, our analyses suggest that the current shortages
will likely be fully resolved only when new supply sources come
online. In the meantime, managing shortages effectively in the
short run, as the FDA's Drug Shortage Program is doing, is
likely to be the best approach to addressing this serious
public health problem.
Thank you. I'd be happy to take any further questions.
[The prepared statement of Ms. Glied follows:]
Prepared Statement of Sherry Glied, Ph.D.
introduction
Mr. Chairman and members of the committee, I am Dr. Sherry Glied,
Assistant Secretary for Planning and Evaluation at the U.S. Department
of Health and Human Services. I am honored to be here today to discuss
the economics of drug shortages.
For some patients, a change in treatment regimen because an
important medication is not available can seriously reduce the quality
of care they receive and threaten their ability to get better. We have
heard the stories of a number of people who have faced this problem.
Patients, like Jay Cuetara, a cancer patient from California with whom
I met earlier this fall, are the ones who suffer when the center where
they receive chemotherapy runs out of the drugs used to treat their
cancer.
The Food and Drug Administration (FDA) has successfully prevented
233 drug shortages since the beginning of 2010 and is taking additional
actions to address drug shortages in response to the President's
October 31 Executive order. In the 4 weeks following the issuance of
the Executive order, FDA has received 61 notifications, a sixfold
increase over the average notifications per month in the previous 10
months.
Drug shortages have been increasing in frequency and severity in
recent years and are adversely affecting patient care. A small number
of drugs in the U.S. experience a shortage in any given year, but the
number of reported prescription drug shortages in the United States has
nearly tripled between 2005 and 2010, increasing from 61 to 178. In
2011, FDA has continued to see an increasing number of shortages,
particularly among older sterile injectable drugs, including cancer
drugs, anesthetics for surgery, drugs for emergency medicine, and
electrolytes for intravenous feeding. There are many causes to this
challenging problem and addressing this significant public health
threat requires the urgent attention of industry, other stakeholders,
and government.
background
Market Behavior
Firms have been increasing their levels of manufacturing capacity
utilization to accommodate the increase in the volume of chemotherapy
drugs administered and the expansion of products available for generic
manufacturing because of patent expiration. Shortages have been
concentrated in drugs where the volume of sales was declining in the
years preceding the shortage, suggesting that manufacturers are
diverting capacity from shrinking lines of business to growing ones.
Quality problems, potentially caused by the high level of capacity
utilization, have led some plants to shut down. A recent report by FDA
found that quality problems at drug manufacturing facilities resulting
in disruptions in supply were the leading cause of drug shortages,
accounting for 43 percent of all shortages. Firms have not responded
quickly to changes in demand and prices in the sterile injectable drug
industry by building new plant capacity because of the high fixed costs
of specialized production. Furthermore, because shortages are generally
uncommon and occur in drugs for which capacity is highly specialized,
and because there are few penalties for failing to supply contracted
drugs, there is no financial return to manufacturers from investing in
excess capacity--that is, capacity that is not used outside a supply
shortage, and thus earns no revenue except during a supply shortage.
Generic drug manufacturers must make strategic decisions about how
to deploy existing production capacity among products, based on their
expectations about what choices their competitors will make and what
demand will be. In general, manufacturers will prefer to concentrate on
markets with fewer competitors, where they are likely to face less
price competition. Conversely, purchasers, such as GPOs, will prefer
that multiple competitors produce each product. If manufacturers
misjudge their competitors' choices, there may be excess supply and
depressed prices for some drugs and insufficient supply and shortages
of others. In small markets, such as those for sterile injectable
drugs, these decisions can lead to considerable volatility in the
market.
why do shortages occur in the prescription drug market?
The prescription drug and vaccine market is characterized by
sporadic shortages of individual drugs and occasional periods during
which many drugs in a class are in shortage. Although product shortages
usually lead prices to rise, consumers to buy less, and producers to
manufacture more, that process does not happen in the markets for some
medically necessary drugs, especially sterile injectable drugs. By and
large, neither the supply nor the demand for medically necessary drugs
responds quickly when the prices of these drugs rise.
By definition, these drugs are medically necessary, so they have
few substitutes and patients cannot generally shift their use over
time. Unlike consumers of other goods and services, patients,
hospitals, and physicians generally do not change treatment patterns
when prices rise.
Suppliers are also quite insensitive to changes in price,
particularly in the short-run. The kinds of medicines that are in
shortage are produced using costly, specialized equipment and require
complex production processes that must meet Current Good Manufacturing
Practice guidelines. Manufacturers can and usually do substitute
products within a class using the same production line, but in most
cases, each individual drug requires regulatory approvals, including
manufacturing controls, which are limited to that particular drug. It
generally takes a long time--years in some cases--for the industry to
increase capacity in response to an increase in prices. If the increase
in prices is expected to be temporary (as would be expected in the case
of a shortage due to a production line disruption), investments in
increased capacity are unlikely to occur. In the longer run--over a
period of 2-3 years, for example--supply will be much more responsive
to price.
This low level of price responsiveness on both the demand and
supply sides of the market for many medically necessary products means
that any changes from historical patterns in supply or demand can lead
to shortages of these drugs.
the case of sterile injectable cancer drugs: supply and demand
In most cases, sterile injectable drugs are not purchased directly
by patients or reimbursed directly by insurance. Rather, these drugs
are purchased by health care providers (generally hospitals and
physicians). Providers are paid for the delivery of the service that
includes the drug. Public and private insurers also pay a separate fee
to compensate for the cost of the drug. Under the Medicare program, the
separate fees for sterile injectable drugs generally are paid under
Part B.
Most hospitals and physicians do not purchase sterile injectable
drugs directly from the manufacturer. Rather, these drugs are purchased
through group purchasing organizations (GPOs), which negotiate prices
with manufacturers on behalf of their clients. GPOs do not take
physical possession of the drugs. Instead, a wholesaler takes
possession of the drug and then sells the drugs to hospitals and
physicians at the GPO negotiated price.
While GPOs negotiate the lowest prices they can with manufacturers,
based on anticipated volume of sales, their clients are not compelled
to purchase drugs from a contracted manufacturer, so the GPO contracts
do not necessarily contain minimum quantity guarantees. GPO contracts
are generally in place for years and typically include price adjustment
clauses. If a GPO is offered a lower price by a competing manufacturer,
the original contracted manufacturer has a right of first refusal to
match the new price. GPO contracts also typically include failure-to-
supply clauses. These clauses generally require the manufacturer to
reimburse the GPO for the difference between the negotiated price and
the purchased price when providers must buy the drug from another
source. These failure-to-supply clauses, however, provide no
reimbursement if there are no alternative sources for the drug, do not
reimburse for resources expended looking for other sources, and are of
limited duration.
Manufacture of generic sterile injectable drugs is a concentrated
market with 7 manufacturers making up a large percentage of the market.
Most of the production of a given drug is by three or fewer
manufacturers. Analysis of a sample of 33 generic sterile injectable
cancer drugs shows that for 28 of these drugs, at least 90 percent of
unit sales in 2010 were made by three or fewer manufacturers.\1\ These
manufacturers typically each operate a small number of facilities at
which injectable drugs can be produced. These facilities, in turn, each
contain several manufacturing lines. A particular drug can be produced
on one or more of these lines in runs that may last from hours to
weeks. The same line may be used for multiple different drugs produced
in separate batches; however, certain drugs (including cytotoxic drugs)
may only be produced on certain types of lines and in certain types of
facilities, so the extent of substitution is limited.
---------------------------------------------------------------------------
\1\ National Cancer Institute analysis of IMS National Sales
Perspectives. In Economic Analysis of the Causes of Drug Shortages,
U.S. Department of Health and Human Services, Office of the Assistant
Secretary for Planning and Evaluation, October 2011, footnote 10.
---------------------------------------------------------------------------
It is important to note that the low price responsiveness of demand
for sterile injectable drugs also has implications for inventories and
capacity decisions. If there is an excess supply of a particular drug,
there may be no market for it, even at a low price. The combination of
limited ability to compel supply (through failure-to-supply clauses or
contractual breach provisions) and low price responsiveness means that
manufacturers face an asymmetry of incentives: there is little cost
(except reputational) of producing too little of one drug (rather than
another), but a potentially high cost of producing too much of that
drug.
ASPE recently released a report on drug shortages that focused on
sterile injectable cancer drugs, one of the classes of drugs where
there are many shortages.\2\ The market for sterile injectable cancer
drugs is robust and growing. FDA analysis of IMS data shows that the
number of vials of sterile injectable cancer drugs shipped between 2006
and 2010 increased by 14 percent, in part because of the aging of the
population. Similarly, ASPE analysis of Medicare Part B data shows that
between 2006 and 2011, the volume of services for sterile injectable
cancer drugs increased by about 20 percent.
---------------------------------------------------------------------------
\2\ U.S. Department of Health and Human Services, Office of the
Assistant Secretary for Planning and Evaluation, Economic Analysis of
the Causes of Drug Shortages, October 2011. http://aspe.hhs.gov/sp/
reports/2011/drugshortages/ib.shtml.
---------------------------------------------------------------------------
That increase in volume, however, did not occur across all sterile
injectable cancer drugs. Using Part B data, ASPE compared the volume of
services prior to shortages for sterile injectable cancer drugs that
did and did not experience a shortage. On average, drugs that
subsequently experienced a shortage are those in which the volume of
sales was declining in the 2006-8 period prior to the shortages. Drugs
that have not experienced a shortage since 2008 had an average 11
percent increase in volumes of services over this period, and a similar
increase in the 2008-11 period that followed. The results suggest that
manufacturers with limited capacity may be making strategic decisions
about which drugs to produce when faced with falling demand for
particular drugs.
the case of sterile injectable cancer drugs: changes in market
structure and production capacity
Manufacturers can increase their portfolio of generic sterile
injectable drugs by filing an abbreviated new drug application (ANDA)
with the FDA, which must be approved before the manufacturer can market
the generic drug. More ANDA approvals mean that manufacturers have more
drugs to choose to manufacture with their existing capacity and
therefore, manufacturers may substitute newer drugs for other drugs.
Alternatively, they may increase the rate at which they make use of
their existing manufacturing capacity. There was a substantial increase
in the number of new injectable ANDA approvals beginning in 2008 (prior
to the increase in sterile injectable drug shortages).
While the overall market for sterile injectable cancer drugs
increased by 14 percent between 2006 and 2010, the number of vials sold
by generic drug manufacturers increased much more rapidly--by nearly 30
percent. Over this period, the overall generic sterile injectable drug
market (including cancer drugs and other classes of products) expanded
by 52 percent. Some of this expansion was accompanied by reductions in
brand manufacturers' production of these drugs.
Our analysis showed that generic manufacturers have expanded not
only the volume of product they produce but also the range. In every
year between 2006 and 2010, the number of new combinations in the
market (a manufacturer producing a drug that it had not previously
produced) exceeded the number of exits.
Expansion of the scope of production is also evident in the
decisions of leading manufacturers to increase future manufacturing
capacity. Several leading manufacturers of generic sterile injectable
drugs indicated that they are upgrading existing facilities or building
new facilities to serve this market. According to news reports and
discussions with manufacturers, Hospira is investing $65 million in
capital improvements in sterile injectable drug manufacturing sites,
Teva is opening a new manufacturing site, and Ben Venue is opening a
new, expanded facility to replace an older manufacturing facility.\3\
These investments will increase capacity in both older and newer
generic sterile injectable drugs.
---------------------------------------------------------------------------
\3\ News reports and personal communication with manufacturers. In
Economic Analysis of the Causes of Drug Shortages, U.S. Department of
Health and Human Services, Office of the Assistant Secretary for
Planning and Evaluation, October 2011, footnotes 16-17.
---------------------------------------------------------------------------
Unfortunately, this new capacity is unlikely to come online for at
least another 18 months. Meanwhile, when there is little excess
manufacturing capacity, producing a new drug will often require
manufacturers to reduce or stop production of another drug or to
operate at a much higher than normal level of capacity utilization.
Increasing utilization of capacity is a good way of expanding
supply in the short-run, but poses risks. High rates of capacity
utilization may also limit the ability of manufacturers to perform
routine maintenance and keep facilities in good order.\4\ A recent
report by FDA found that quality problems at drug manufacturing
facilities resulting in disruptions in supply were the leading cause of
drug shortages, accounting for 43 percent of all shortages.\5\
---------------------------------------------------------------------------
\4\ Donald Gross, John F. Shortle, James M. Thompson, and Carl M.
Harris, Fundamentals of Queuing Theory, Fourth Edition, John Wiley &
Sons, Inc., Hoboken, NJ, 2008.
\5\ U.S. Food and Drug Administration, A Review of FDA's Approach
to Medical Product Shortages, October 2011. http://www.fda.gov/
AboutFDA/ReportsManualsForms/Reports/ucm2750
51.htm.
---------------------------------------------------------------------------
Supply Disruptions
The structure of the sterile injectable market, the recent
expansion in volume and scope, and the consequent very high level of
capacity utilization, mean that small disruptions to supply--such as
may occur because of quality problems--which would otherwise be
absorbed through diversion of capacity, can lead to cascading and
persistent shortages.
Over time, entry and expansions in capacity in the industry, should
lead to a situation where shortages due to supply disruptions are
sporadic and rare. In the current environment, where capacity is
severely constrained, shortages induced by disruptions can cascade
throughout the sector and persist for long periods of time.
recommendations
The Administration is doing everything in its power to address the
shortages administratively. There a few areas where additional
authority or action by Congress may be needed or where the private
sector can take steps. Based on our examination of the underlying
factors that lead to periods of shortage in the prescription drug
market, and particularly the underlying market factors that have
contributed to the current shortages in the area of sterile injectable
drugs, we offer a few recommendations.
Policymakers must balance the short-run benefits of tailoring
regulatory responses to specific situations against the risk of
strategic behavior and consequent reductions in competition in the long
run.
Steps that both expedite expansion of supply and maintain product
quality in sectors with high capacity utilization could reduce the risk
of shortages not only in the current situation, but in the future as
well. To facilitate this, FDA can expedite review of new manufacturing
capacity in this area, and we understand that FDA is already doing this
and committed to continuing to do so.
Private organizations that purchase drugs (including GPOs), can
help to alleviate future shortages by negotiating with drug
manufacturers to strengthen the failure-to-supply requirements in their
contracts. Such contractual changes are likely to incentivize drug
manufacturers to invest in extra capacity of both production lines and
active pharmaceutical ingredients.
As part of the Administration's broader effort to work with
manufacturers, health care providers, and other stakeholders to prevent
drug shortages, the President has directed the FDA to take steps that
will help to prevent and reduce current and future disruptions in the
supply of lifesaving medicines and FDA is responding to this directive.
The Administration also announced on October 31, 2011, its support
for bipartisan legislation (S. 296 and H.R. 2245) that would require
all prescription drug shortages to be reported to FDA and would give
FDA new authority to enforce these requirements.
summary
In summary, the current class-wide shortages in the sterile
injectable drug industry appear to be a consequence of a substantial
expansion in the scope and volume of products produced by the industry
that has occurred over a short period of time, without a corresponding
expansion in manufacturing capacity. The current shortages will likely
be resolved when new supply sources come online as the manufacturing
industry increases its capacity. In the meantime, the FDA's Drug
Shortage Program is working diligently with manufacturers and other
stakeholders to mitigate the effects of the shortages and the
Administration is doing everything in its power to address shortages
administratively.
I appreciate the opportunity to speak with you about our analysis
of drug shortages. I would be happy to respond to any questions.
The Chairman. Dr. Glied, thank you very much.
Dr. Kweder.
STATEMENT OF SANDRA KWEDER, M.D., DEPUTY DIRECTOR, OFFICE OF
NEW DRUGS, FDA, WASHINGTON, DC
Dr. Kweder. Good morning, Mr. Chairman and members of the
committee. Thank you, thank you, thank you for holding this
hearing. I am Dr. Sandra Kweder, as introduced. I'm the Deputy
Director in the Office of New Drugs in FDA.
This problem of drug shortages is a very serious problem
for patients, and it's a serious problem for medical care
providers in this country, and I think it touches every one of
us or our families in some way.
My colleagues and I, at FDA, take this problem very
seriously, and we look forward to continuing to work with you
and our other colleagues in the profession to find short- and
long-term solutions.
Today I want to highlight FDA's ongoing actions to prevent
and mitigate shortages, as well as mention some more recent
efforts by the Administration to address this problem.
You already stated that the number of drug shortages has
been rising steadily over the past 5 years, to a level that we
would never have anticipated. In 2005, we reported a total of
61 actual drug shortages for that year. By 2010, the number was
178 in that year. That rising trend has continued into 2011.
Between January and October of this year, we were tracking 220
actual shortages. That doesn't include the ones that we
prevented.
In July of this year, Dr. Howard Koh, the Assistant
Secretary of Health at HHS, started to convene a series of
meetings with representatives from across the Department,
including us and Dr. Glied, to try and understand more about
the roots of drug shortages and what we could do with our
existing authorities to decrease their frequency.
In September, we at FDA held a public meeting to try and
gain additional insights into the causes and impacts of drug
shortages, and some possible strategies for preventing or
mitigating them. We were open to any ideas that we hadn't
already thought of. The insights that we gained from that
meeting on the effects of this problem on patient care and
patients were staggering.
On October 31 of this year, the Administration took a
series of steps to reduce drug shortages, including issuance of
an Executive order by the President, an announcement of support
for bipartisan legislation, and FDA directly communicating with
manufacturers to encourage them to voluntarily continue to
report any problems that they were having that might ultimately
result in a drug shortage.
That Executive order had three main components. One was
directing FDA to use all appropriate administrative tools to
require manufacturers to provide us advance notice of
shortages. It directed us to continue to expand our efforts to
expedite our work in reviewing manufacturing applications and
conducting inspections where needed, and to work with the
Department of Justice to examine whether secondary wholesalers
or other market participants were responding inappropriately or
illegally by creating a gray market with price gouging.
In parallel, a number of things occurred. HHS released two
reports, one by Dr. Glied and her colleague, and one by FDA to
report on our views on the current status of medical product
shortages and the agency's role in monitoring, preventing, and
mitigating them. That same day, we in FDA sent a letter to
every single pharmaceutical manufacturer reminding them of what
their legal obligations were to report to us under very narrow
circumstances about discontinuing product production, but also
urging them to notify us early when they had any problem that
might result in a drug shortage.
Since that time, we at FDA have been continuing to tackle
the problem of drug shortages head on. There is no question
that we have our work cut out for us, but this is a public
health crisis, and we're responding. We have always had strong
internal working relationships in the agency on these matters,
and we are continuing to expand our efforts to communicate with
the industry in this work.
Since October 31, there has been a significant increase in
notifications about the number of potential shortages to us.
Our efforts are having an effect. We used to get about 10
notifications a month of a potential shortage. Since October
31, we have had 61 notifications, a sixfold increase. They
continue to identify areas where we can help, and we have
helped in many of those cases. But they also continue to show
us serious quality-related problems that firms are having in
production of quality drug products.
Nonetheless, as a result of these reports, we've intervened
to prevent 96 drug shortages. Now, in one intervention alone,
we prevented 86 shortages at a single plant. We're working to
resolve quality problems with firms and review and expedite
applications that they have in place that would mitigate any
potential shortage. We have doubled the number of our staff in
the drug shortage program. We have drafted guidance for
industry on what exactly we think is helpful for them to report
and under what circumstances, and just today we've published an
interim final rule that clarifies and expands some of the
definitions within our legal authority to require reporting for
product disruptions where a company is the sole source provider
of an important drug.
Since October 31, we've been engaging in a series of
meetings with stakeholders, including individual companies,
industry organizations, medical care providers, Pharma and bio
and other organizations who are interested in finding solutions
to this problem. One of our most important goals we have for
these meetings is finding ways to facilitate industry
commitment and performance in producing high-quality products.
On a separate track, I want to mention something critical.
Many characterize FDA's activities in this area in working with
companies as going in with an inspection, walking out the door,
and leaving the company a list of deficiencies and telling them
they need to shut down overnight. Nothing could be further from
the truth.
These companies are usually long aware of the problems that
they have had. We have cited them a number of times, and we
continue to meet regularly with firms that are having
difficulty maintaining quality manufacturing. We are also
beginning the process of improving our new drug shortage
database for internal tracking of shortages, as well as
utilizing the database to develop better prediction models for
who might be at risk.
And finally, we've initiated communication with the
Department of Justice as directed in the Executive order about
how to share information that we receive about price gouging
out in the community, and we understand that the Department of
Justice is also reaching out to the National Association of
Attorneys General to understand whether there are State and
local laws that can help address some of these problems.
Overall, our goal is to ensure that we and all of our
stakeholders share and act on the same commitment to high-
quality drugs that the American public can continue to rely on
when they need them.
I look forward to working with you, and I am happy to
answer questions.
[The prepared statement of Dr. Kweder follows:]
Prepared Statement of Sandra Kweder, M.D.
introduction
Mr. Chairman and members of the committee, I am Dr. Sandra Kweder,
Deputy Director, Office of New Drugs in the Center for Drug Evaluation
and Research (CDER) at the Food and Drug Administration (FDA or the
Agency). Thank you for the opportunity to be here today to discuss the
growing problem of drug shortages. This is a very troubling situation
and one that FDA takes very seriously. We are committed to addressing
this problem and are eager to continue to work with others to help find
short- and long-term solutions to the challenge of drug shortages.
Today I will provide background on drug shortages, explain some of
the reasons for drug shortages, and discuss FDA's ongoing actions to
prevent or mitigate shortages as well as the more recent efforts by the
Administration to further reduce and prevent drug shortages. The latter
includes an Executive order issued by President Obama on October 31,
2011, that will help address the shortage of prescription drugs and
help ensure patients have access to the lifesaving medicines they need.
Background
FDA defines a drug shortage \1\ as a situation in which the total
supply of all clinically interchangeable versions of an FDA-regulated
drug is inadequate to meet the current or projected demand at the
patient level. The impact of drug shortages on patients can be
significant and even life-threatening. Certain drugs that recently have
been in shortage--such as ``crash cart'' drugs--can literally be
lifesaving in the acute setting, while others, such as outpatient
chemotherapy drugs, must be administered within days or weeks to
provide maximum benefit. Shortages of these drugs not only have an
impact on clinical decisionmaking, but they could also significantly
affect patient outcomes. For example, a shortage of propofol, which is
used as a sedative and for general anesthesia, led clinicians to
substitute etomidate, resulting in eight suspected cases of phlebitis
(inflammation in a vein) in a single hospital system. Other drugs that
have experienced shortages, such as the cancer drug cytarabine, arc
important drugs not only because they treat a critical disease, but
also because they lack an effective alternative.
---------------------------------------------------------------------------
\1\ CDER Manual of Policies and Procedures (MAPP) 6003: http://
www.fda.gov/downloads/
AboutFDA/CentersOffices/OfficeofMedicalProductsandTobacco/CDER/
ManualofPoliciesProced-
ures/UCM079936.pdf.
---------------------------------------------------------------------------
In addition, drug shortages are impacting research studies. The
National Cancer Institute (NCI) recently reported that while there have
been periodic shortages of different cancer drugs over the past several
years, nothing has approached the scale of the current shortages of
chemotherapy drugs. NCI notes that the inability to obtain adequate
supplies of these cancer drugs for research has resulted in promising
clinical trials being suspended indefinitely; patient enrollment being
abruptly halted; and trials being delayed while alternative treatment
regimens are developed.
FDA's awareness of these consequences for patients drives our
efforts to prevent and resolve shortages as soon as possible.
The number of drug shortages has been rising steadily over the last
5 years. In 2005, CDER reported a total of 61 shortages; by 2010, that
number had risen to 178.\2\ The rising trend of drug shortages has
continued into 2011, with 220 shortages tracked by FDA from January
through October of this year. Although shortages can occur with any
drug, shortages of sterile injectables currently make up a large and
increasing share of these shortages, despite the fact that sterile
injectable drugs comprise a small percentage of the overall
prescription drug market. These include critical products such as
oncology drugs, anesthetics, parenteral (intravenous) nutrition drugs,
and many drugs used in emergency rooms.
---------------------------------------------------------------------------
\2\ ``A Review of FDA's Approach to Medical Product Shortages Drug
Shortage Report'': http://www.fda.gov/AboutFDA/ReportsManualsForms/
Reports/ucm275051.htm.
---------------------------------------------------------------------------
Of the 127 drug shortages tracked by FDA during the period from
January 1, 2010, to August 26, 2011, oncology drugs accounted for 28
percent of shortages, followed by antibiotics at 13 percent. One
hundred eighteen shortages (93 percent) involved medically necessary
drugs and 52 of the shortages (41 percent) were both medically
necessary and sole-source drugs.\3\ For the purpose of prioritizing our
work to address shortages, we consider a drug medically necessary if it
is used to prevent or treat a serious or life-threatening disease or
medical condition for which no acceptable alternative drug is
available.
---------------------------------------------------------------------------
\3\ ``A Review of FDA's Approach to Medical Product Shortages Drug
Shortage Report'': http://wwwfda.gov/AboutFDA/ReportsManualsForms/
Reports/ucm275051.htm.
---------------------------------------------------------------------------
Reasons for Drug Shortages
There is no single reason that drug shortages occur. The Agency has
identified a variety of root causes of drug shortages, some of which I
will discuss here. Ultimately, in any given drug shortage, many factors
are involved, and underlying causes may operate alone or in combination
to result in an individual shortage. These include, but are not limited
to, industry consolidation, shortages of underlying raw materials,
inventory and distribution practices, difficulty in producing a given
drug (e.g., sterile injectables, which entail a much more complex
manufacturing process than solid dosage forms), quality and
manufacturing problems, production delays, discontinuations for
business reasons, and unanticipated increases in demand.
Of the 127 drug shortages tracked by FDA during the period from
January 1, 2010, to August 26, 2011, 50 percent were generic or
unapproved drugs \4\ (often drugs that have been on the market for
decades, but which have never received FDA approval), 43 percent were
innovator drugs, and 7 percent had both categories in shortage. Sterile
injectable medications accounted for 102 drugs in shortage (80 percent
of the total 127) and approximately 54 percent of these shortages were
due to product quality issues such as particulates, microbial
contamination, impurities and stability changes resulting in
crystallization.\5\
---------------------------------------------------------------------------
\4\ Unapproved drugs are drugs that have not received FDA approval
to be legally marketed.
\5\ ``A Review of FDA's Approach to Medical Product Shortages Drug
Shortage Report''. http://www.fda.gov/AboutFDA/ReportsManualForms/
Reports/ucm275052.htm.
---------------------------------------------------------------------------
Industry consolidation has also contributed to the drug shortage
problem. In 2010, the top five generic sterile injectable manufacturers
accounted for 80 percent of the sterile injectables sold in the U.S.
market by volume.\6\ When a firm has a manufacturing or quality
problem, they may voluntarily suspend production so they can identify
and address the root cause of the product--quality problem. Some of
these quality issues are complex and firms need to take significant
time to correct the underlying cause of the problem. Such is the case
with shortages of older sterile injectables, which involve special
techniques and processes to maintain sterility. When one firm
experiences a quality problem that results in production holds or
slowdowns, the remaining firms are often not able to make up the
shortfall, because they have limited manufacturing capacity.
---------------------------------------------------------------------------
\6\ ``A Review of FDA's Approach to Medical Product Shortages Drug
Shortage Report'': http://www.fda.gov/AboutFDA/ReportsManualForms/
Reports/ucm275051.htm.
---------------------------------------------------------------------------
Inventory and distribution practices by manufacturers and
distributors can alter the availability of drugs, often creating short-
term shortages. Better technology for supply management may lead
manufacturers or distributors to reduce the size of their inventories.
This minimizes product loss from short expiration times and carrying
costs. However, smaller inventories mean that there are fewer reserves
available to respond in the event of production problems. Overall, it
does appear that inventories are smaller due to a shift to ``just in
time'' production, and that leaves little leeway for even small changes
in supply.
Some reports in the media about drug shortages have focused on the
lack of raw materials necessary to manufacture certain classes of drugs
that are currently experiencing shortages. In the past, some shortages
of drugs have been due to shortages of underlying raw materials,
particularly of the active pharmaceutical ingredient (API) for a
specific drug. However, this does not appear to be a significant
contributor to the current shortages of sterile injectables. In fact,
in 2010 and 2011, drug manufacturers cited unavailable API as the
primary cause in less than 10 percent of drug shortage situations.
Actions to Prevent or Mitigate Shortages
In 1999, FDA formed the Drug Shortage Program (DSP) within CDER in
an effort to begin monitoring and mitigating the impact of drug
shortages. DSP facilitates the prevention and resolution of shortage
issues by collaborating with FDA experts, industry, and other external
stakeholders. In addition, DSP provides information about drug
shortages to the public, health care professional organizations,
patient groups, and other stakeholders.
When FDA becomes aware of a potential drug shortage, either from
pharmacists, physicians, pharmacy organizations, manufacturers or other
sources, the Agency works collaboratively with the affected firm or
firms to return the product to its usual market availability as quickly
and as safely as possible, while helping prevent any harm to patients.
Although FDA cannot require firms to continue production of a product
or increase production in response to a shortage, it does encourage
other firms that make the drug to ramp up production, if they are
willing and able to do so. FDA also expedites the review of submissions
from manufacturers that may alleviate the drug shortage, which may
include requests from existing manufacturers to extend the expiration
date of products, make manufacturing changes to increase capacity, use
a new raw material source, or change product specifications, as well as
applications from new manufacturers who may be willing to enter the
market to address a shortage situation. When a shortage is caused by
manufacturing and quality problems, FDA works directly with the
affected firm to develop short- and long-term solutions to the
problems. FDA can also use its regulatory discretion for a manufacturer
to continue marketing a medically necessary drug, if the manufacturer
can develop a method to resolve a quality issue prior to the drug's
administration.
FDA carefully considers the impact of any drug shortage on patient
care and access before taking any enforcement action. One example of a
situation in which FDA worked closely with a manufacturer to address a
quality concern was the case of the shortage of the drug cytarabine, a
sterile injectable drug that is used to treat certain types of
leukemia. Beginning in 2010, a manufacturing change led to crystal
formation in the vials of cytarabine, which poses an extremely
dangerous situation to patients. FDA worked with the manufacturer and
found that if the vials were warmed, the crystals would dissolve and
the danger to patients would be mitigated. Utilizing our regulatory
discretion, FDA permitted the manufacturer to ship the vials with a
letter to health care professionals, notifying them to inspect for
crystal formation and, if present, to warm the vials to dissolve
crystals to ensure patient safety. The use of regulatory discretion
helped alleviate this critical shortage temporarily until the
manufacturer was able to determine the cause and resolve the crystal
formation problem.
In other cases, FDA has been able to mitigate potential shortages
due to the discovery of metal shavings and other foreign particles in
injectable drug products. A recent example was sodium phosphate, which
is a medically necessary electrolyte needed for IV nutrition in
critically ill patients. In early 2011, the manufacturer found foreign
particles in the drug product, posing a significant safety concern to
patients. After the manufacturer generated data showing the particles
could successfully be removed with a filter and with that process the
drug could be used safely, FDA exercised regulatory discretion for the
drug to be shipped with a letter to notify health care professionals
that the filter needed to be used with the drug. This allowed the drug
to be available for patients while the firm addressed the particulate
issue for future production and averted the risk to patients of having
particulate matter injected into their veins.
FDA can also use its regulatory discretion with regard to the
temporary import of non-FDAapproved versions of critical drugs, when a
shortage cannot be resolved immediately. However, there are several
factors that limit the applicability of this option. The product may
already be in shortage abroad, which may hamper our ability to
alleviate the problem in the United States. In addition, although there
may be foreign suppliers that possess or have access to a particular
drug, these suppliers are not necessarily FDA-approved and may need to
be inspected, and their drug labels evaluated, before a product can be
imported into the United States. Once a foreign firm is identified as
willing and able to supply the drug, FDA can exercise enforcement
discretion for the temporary import of a foreign drug after ensuring
there are no significant safety or efficacy risks for U.S. patients.
The temporary importation is tightly controlled and distribution is
closely monitored. For example, FDA must ensure that drugs imported
from abroad are manufactured in a facility that meets FDA quality
standards. FDA will then post information about the imported drug on
the drug shortage Web site.\7\ FDA has done this for the import of a
number of critical drugs during a shortage, including: propofol,
Foscarnet, ethiodol, thiotepa, norepinephrine, Xeloda, leucovorin and
levoleucovorin.
---------------------------------------------------------------------------
\7\ http://www.fda.gov/Drugs/DrugSafety/DrugShortages/
ucm050792.htm.
---------------------------------------------------------------------------
As noted above, FDA does not have the statutory authority to
require firms to continue production if they decide to stop, or require
other firms to increase production in response to a shortage. Firms are
statutorily required to provide FDA with notice of manufacturing
discontinuations only in limited circumstances, and FDA lacks explicit
authority to impose penalties on firms that do not submit required
reports of discontinuations. Prompt notification is important for all
disruptions in supply that could lead to shortages. Early notification
leads to a better chance of timely resolution. In 2010, FDA was able to
prevent 38 drug shortages due to early voluntary notification from
firms, and in 2011, FDA has prevented 195 drug shortages as a result of
voluntary notification and close collaboration with manufacturers to
avert shortage situations.
Recent Efforts to Further Reduce and Prevent Drug Shortages
Although our work has enabled the Agency to successfully prevent
233 shortages since the beginning of 2010, drug shortages are on the
rise. In response to this growing problem, the Administration has taken
several recent actions to better understand and respond to drug
shortages.
In July of this year, Dr. Howard Koh, Assistant Secretary for
Health at the Department of Health and Human Services (HHS or the
Department), convened a series of meetings with representatives from
across the Department to find out more about the root cause of
shortages and what steps could be taken within existing authorities to
decrease the frequency of shortages in the future.
On September 26, 2011, FDA hosted a public meeting to gain
additional insight into the causes and impacts of drug shortages, and
possible strategies for preventing or mitigating drug shortages.
Interested parties who attended included professional societies,
patient advocates, industry, researchers, pharmacists, and other health
care professionals. A docket has been opened in relation to the public
workshop where comments can be received from the public.\8\
---------------------------------------------------------------------------
\8\ ``Drug Shortage Docket Web site: http://://www.regulations.gov/
#!documentDetail;D=FDA-2011-N-0690-0001.
---------------------------------------------------------------------------
On October 31, 2011, the Administration took a series of steps to
reduce drug shortages. This included the issuance of an Executive order
by the President,\9\ which directed FDA, in cooperation with the
Department of Justice, to take action to help further reduce and
prevent drug shortages, protect consumers, and prevent price gouging.
In an effort to encourage broader reporting of manufacturing
discontinuances, the President's order directs FDA to use all
appropriate administrative tools to require drug manufacturers to
provide adequate advance notice of manufacturing discontinuances that
could lead to shortages of drugs that are life-supporting or life-
sustaining, or that prevent debilitating disease. The Executive order
also requires FDA to expand its current efforts to expedite review of
new manufacturing sites, drug suppliers, and manufacturing changes to
help prevent shortages. Under the President's Order, FDA is also
directed to work with the Department of Justice to examine whether
secondary wholesalers or other market participants have responded to
potential drug shortages by hoarding medications or raising prices to
gouge consumers, and whether these actions are consistent with
applicable laws.
---------------------------------------------------------------------------
\9\ http://www.whitehouse.gov/the-press-office/2011/10/31/
executive-order-reducing-prescription-drug-shortages.
---------------------------------------------------------------------------
On the same day the President signed the Executive order, the
Administration announced its support for bipartisan legislation (S. 296
and H.R. 2245) \10\ that would require all prescription drug shortages
to be reported to FDA and would give FDA new authority to enforce these
requirements. The Administration also announced that, over the coming
weeks, FDA would provide additional staffing resources to enhance the
Agency's ability to prevent and mitigate drug shortages. HHS released a
report, prepared by the Office of the Assistant Secretary for Planning
and Evaluation (ASPE), which is detailed further in their testimony
today. Additionally, FDA released a report entitled ``A Review of FDA's
Approach to Medical Product Shortages'' \11\ on its role in monitoring,
preventing, and mitigating drug shortages, which included
recommendations to further reduce the impact of these shortages.
---------------------------------------------------------------------------
\10\ Press Release: http://www.whitehouse.gov/the-press-office/
2011/10/31/we-can-t-wait-obama-administration-takes-action-reduce-
prescription-drug.
\11\ http://www.fda.gov/AboutFDA/ReportsManualsForms/Reports/
ucm275051.htm.
---------------------------------------------------------------------------
In addition, FDA sent a letter to pharmaceutical manufacturers,\12\
reminding them of their current legal obligations to report certain
discontinuances to the Agency, and urging them to voluntarily notify
FDA of all potential disruptions of the prescription drug supply to the
U.S. market, even where disclosure is not currently required by law.
The letters to manufacturers and the Executive order have produced a
significant increase in the number of potential shortages reported to
FDA. In the 10 months preceding the Administration's actions (January
through October 2011), the Agency received an average of approximately
10 notifications per month. In the 4 weeks following the letters to the
manufacturers and issuance of the Executive order, we received 61
notifications, a sixfold increase.
---------------------------------------------------------------------------
\12\ http://www.fda.gov/Drugs/DrugSafety/DrugShortages/
ucm277675.htm.
---------------------------------------------------------------------------
Other recent activities FDA has been working on to help prevent or
mitigate drug shortages include:
Doubling the number of staff in the Center to assist in
coordination and response activities, as well as expediting actions
(e.g., inspections) that would help to alleviate drug shortages;
Developing several guidances for industry on reporting
product disruptions, supply interruptions, and potential shortages;
Meeting with various stakeholders to discuss shared
opportunities to prevent and mitigate shortages, including; the Generic
Pharmaceutical Association, the Pharmaceutical Research and
Manufacturers of America, the Biotechnology Industry Organization and
drug wholesalers;
Exploring options for improving the drug shortage database
for the internal tracking of shortages, as well as utilizing the
database to develop prediction models for drug shortages;
Assessing commercial systems that could be contracted to
provide ongoing or periodic data on sales and distribution of drugs at
the wholesale level to detect early signals of potential shortages or
supply disruptions;
Working with the Department of Justice, as directed in the
Executive order, regarding issues related to price gouging and
hoarding, including reports from pharmacists and other health care
providers in connection with drug shortages;
Announcing a public meeting on proposed recommendations
for establishing a generic drug user fee. The primary goal of this user
fee program is to bring median time to approval from around 30 months
to a primary review goal of 10 months. This will bring generics to
market faster, which should help alleviate shortages. In addition, FDA
will continue to prioritize review of generic applications for products
that are in shortage situations.
conclusion
FDA and the Administration are committed to addressing the
important issue of drug shortages. FDA is doing everything it can under
its current administrative authority to help prevent and mitigate drug
shortages. As noted previously, there has been a significant increase
in the number of notifications as a result of the letters to
manufacturers and the Executive order, which will continue to help
mitigate a substantial number of drug shortages. It is our goal to
continue a healthy and substantive dialogue with all interested
stakeholders, both internally and externally, as we seek a solution to
the problem of drug shortages. This is a challenge that we must work
collaboratively to solve. FDA has taken a number of important steps and
will continue to work with industry, providers and patients to address
this issue. We also recognize the important role that you and other
Members of Congress play, and we welcome the opportunity to discuss
this important topic with you both today and moving forward.
The Chairman. Thank you both very much. We'll start a round
of 5-minute questions.
Dr. Glied, reading your testimony last night, what caught
my eye was this paragraph. You said,
``It's important to note that the low price
responsiveness of demand for sterile injectable drugs
also has implications for inventories and capacity
decisions. If there is an excess supply of a particular
drug, there may be no market for it, even at low
prices.''
And you say,
``The combination of limited ability to compel supply
through failure-to-supply clauses or contractual breach
provisions and low price responsiveness means that
manufacturers face a symmetry of incentives. There is
little cost of producing too little of one drug, but a
potentially high cost of producing too much of that
drug.''
OK. How do you solve that conundrum?
Ms. Glied. It's a challenging problem because I think one
of the things we need to think about here is how--one of the
things that we raise in the paper that we wrote is how to think
about the private market responding to a lot of this change,
because if we think about this sector, it's really mostly a
private market issue. The group purchasing organizations are
private, and the drug manufacturing firms are private also.
So one of the things that the economists we spoke with
suggested to us is that some of this could happen through the
contracting processes that exist between the group purchasing
organizations and the manufacturers, trying to essentially have
the group purchasing organizations put more of a premium on
having the supply in hand, not just getting the lowest price
but making sure that the manufacturer really actually has that
supply available.
That's something that's got to work itself out in the
market, because right now the real challenge is if you're a
manufacturer, you want to produce just the right amount for the
market, and in the cases where there's only a sole source
manufacturer, that's not such a complicated problem. You know
what the market is, you can produce it. But when there are two
or three different companies producing the same drug, and
that's typical for this generic kind of industry, you're not
only thinking about how much you produce, you also have to
think about how much your competitors are likely to produce,
and you can create real instability in the market as those
things turn around.
The Chairman. Then your report discusses how better
``failure supply clauses'' in these group GPO contracts could
help mitigate the drug shortage crisis. Can you elaborate on
that?
Ms. Glied. One of the things that we learned in talking to
group purchasing organizations and manufacturers is that most
group purchasing organization contracts do include a clause in
them that says that if a manufacturer is unable to produce a
drug that they were contracted to supply, they have to pay the
difference between the cost of the drug at the price that they
contracted for and the price at which somebody can buy the
drug.
Unfortunately, what happens is that when a drug goes into
shortage and you can't buy the drug at any price, those
contracts become moot, they don't hold any force anymore. So we
thought that one of the things that might happen here is that
private sector manufacturers might work with those contract
terms to try and make them work so that even in the case of a
supply shortage, you would push a little bit more of that
responsibility to the manufacturers.
The Chairman. Dr. Kweder, again looking at your testimony,
one thing that caught my eye last night in reading this is that
FDA does not have the statutory authority to require firms to
continue production if they decide to stop, or require other
firms to increase production in response to a shortage. Firms
are statutorily required to provide FDA with notice of
manufacturing discontinuations only in limited circumstances,
and FDA lacks explicit authority to impose penalties on firms
that do not submit required reports of discontinuations.
How important an aspect to this shortage problem is that?
Dr. Kweder. We think it's extremely important. The root of
them from our window is--we don't get into the finances--is
when a company is having problems producing a quality product,
they're having trouble in a plant, they do not--until there is
a crisis--they typically do not come to FDA and say we're
having a problem here, we need your help, we think we're going
to have a problem producing a product. It's not our job to go
to our competitors and ask them to ramp up production of a
critical product, but we need some help.
If we know about that, we can do that.
The Chairman. My time is running out. One last thing. So if
you've got two, three or four manufacturers and if they each
supplied you with this information, then you would be able to
tell whether or not we're facing a shortage from one day to the
other.
Dr. Kweder. That's right. That's exactly right.
The Chairman. Thank you very much.
Senator Enzi.
Senator Enzi. Thank you, Mr. Chairman.
Dr. Glied, the president of the Generic Drug Manufacturers
Association, Mr. Ralph Neas, has told the committee that drug
pricing issues are not the cause of the current drug shortages.
Do you agree with Mr. Neas and the Generic Drug Manufacturers
that pricing is not the cause of the current shortages?
Ms. Glied. Yes, sir. I agree.
Senator Enzi. Thank you.
Dr. Kweder, how many supplemental and new generic
applications are in the current backlog that could help
mitigate a shortage if they were approved? Is FDA prioritizing
or expediting these applications for review?
Dr. Kweder. The answer to the second question is
absolutely, yes. We do have a longstanding backlog of generic
drug applications, but it's important to look at what those
applications are, and they can be for things like a new
application, a new drug producer, they can be for a new source
of an ingredient, or for a manufacturing change.
We do monitor that queue and are well aware of the ones
that--as we hear about potential drug shortages, we are
constantly looking at that queue to pull things out that might
expedite them in order to prevent a drug shortage, which is one
of the reasons that early notification of a potential problem
is so important. That's exactly what we can do.
Senator Enzi. Thank you. I've also heard about the amount
of time that it takes for different stakeholders, ranging from
6 months to 3 to 4 years for approval. How long does it take to
get FDA approval to a manufacturing facility change? Can you
give some specific examples where the FDA has met the 6-month
goal?
Dr. Kweder. A lot of that depends on the facility or where
the facility is. In many cases, companies are coming to us
seeking to change facilities, and it's a facility that we know
well. It's moving to another plant. Those can be turned around
very, very quickly. If it's a facility in another country, for
example, that we're familiar with, we often have a great deal
of information about that facility, or if we don't, our
international colleagues--who we have cooperative agreements
with and understandings with--may have already inspected those
facilities and be quite familiar with them, and share that
information with us so that we can expedite action on that
particular facility.
There is a big difference in how we do business when we
think there may be a critical product, a highly medically
necessary product with a potential for supply, we can expedite
those and meet those goals, and we do.
Senator Enzi. Thank you. I was very impressed with your
information about what's happened since October 31, when the
President did his Executive order, and I won't ask you to
provide it right now. If you can provide us with a list of the
specific drug shortages that were prevented and how you did it,
that might be helpful as we're doing the legislation as well.
Dr. Kweder. We can do that.
Senator Enzi. OK, thank you. And can you tell us how the
Office of Generic Drugs coordinates with your office when
evaluating applications for the manufacturing upgrades, active
pharmaceutical ingredient approval, or drug applications?
Dr. Kweder. Our office and the Drug Shortages Program work
very closely. In effect, we have key contacts and kind of a
SWAT team approach that's ongoing with the Office of Generic
Drugs and our Office of Compliance, and the Office of New Drug
Chemistry, all scientists who are involved in the actual review
of the applications. So we coordinate very closely. We are in
contact with them on a daily basis sharing information about
what we're hearing, what applications they have, the status of
those applications, and also ongoing interactions with anyone
such as our inspectors in the field who may be going into any
of those plants and working with companies to address problems.
It's a daily contact.
Senator Enzi. Thank you. I'll yield the balance of my time.
The Chairman. Thank you, Senator Enzi.
I have an order of appearance here: Senator Kirk, Senators
Franken, Merkley, Isakson, Bennet, Bingaman, Whitehouse,
Blumenthal, Casey and Hatch.
Senator Kirk.
Senator Kirk. I thought your testimony was outstanding in
describing the problem. Dr. Kweder, I asked Shauna to prepare
me for this hearing. I wanted to drill into one patient and one
therapy in which we were in shortage. It's non-Hodgkin's
lymphoma, and the shortage of doxorubicin. And the story of the
shortage for non-Hodgkin's lymphoma patients I think is
instructive of the problem here. It's supplied by three
companies, and according to the briefing I got, doxorubicin
shortage is due in part to one of the four companies that makes
the drug, Teva Pharmaceuticals, was told earlier this year to
stop manufacturing the drug by FDA.
Meanwhile, demand for the drug has increased according to
the American Society of Health System Pharmacists, and another
supplier, according to ABC Bedford Laboratories, say they're
currently facing a manufacturing and capacity constraint.
So we have, I think, problems that we can solve and
problems that we can't solve. If an individual private supplier
is having difficulty or is deciding to get in or get out of
business, I think it's a nonstarter for the Congress to order a
private concern to produce a pharmaceutical which it does not
want to produce. We should not get into that game.
But with regard to the Teva Pharmaceuticals question where
the FDA is ordering them to stop and then triggering a
shortage, I agree with Senator Blumenthal that the Klobuchar
legislation is good, but I would argue to go one step further.
I very much appreciate the work that your office has done, and
I think you are a very effective advocate inside FDA, but I
would like you to have increased powers.
My hope is that this committee could consider something
like providing the Center for Drug Evaluation and Research a
new authority that I would call, for lack of a better term, a
patient care balancing authority, so that if we find a shortage
which, in your testimony, was very good. You say total supply
of the clinically interchangeable version of an FDA-regulated
drug is inadequate to meet the current or projected demand at
the patient level, that you then have a patient care balancing
authority to take action within FDA to remedy the situation
within 6 months.
And I would argue that we should then go further and say if
you find that the drug is vital to the survival of a patient
which, for example, in oncology that would be the case, that
your patient care balancing authority would be able to remove
FDA barriers to supply within 1 month, and I don't think you
would actually have to use this authority that much.
But the fact that we have given you this authority would
then give you so much greater weight inside the bureaucracy,
because we make many decisions inside FDA to stop or halt or
suspend, but if the decision is for patient death, we
definitely need the Dr. Kweder operation, the CDER office to
have greater authority, and I would call that a patient care
balancing authority. But if you could comment?
Dr. Kweder. First I want to correct something. FDA did not
tell Teva that they had to stop producing.
Senator Kirk. Oh, OK.
Dr. Kweder. OK? And I think that's important. We had been
working with Teva for quite some time on really major quality
production problems. This was not a new situation. This was
ongoing.
They ultimately made the decision that the only way that
they could correct it was if they shut down, and I can't
comment on the specifics of whether that was entirely
necessary. That's not within my purview today.
I think the problem that ultimately resulted because, as
you said, there were other companies producing it, is really
illustrative of Dr. Glied's testimony and findings, that while
there are other companies that produce it, they cannot--because
of their production model, their 24/7 model--they cannot turn
on a dime and ramp up production to meet a need when Teva makes
a legitimate or not legitimate decision about what they need to
do.
I don't think that additional FDA authority, as much as I
welcome additional authority, would necessarily fix that
problem. I am happy to tell you that Teva is coming back online
in producing doxorubicin, if it's not available already, and we
recently approved yet another supplier. Pfizer, not typically a
generic producer, has stepped in and started to produce that
drug to help make up that shortfall. That will help hundreds of
thousands of cancer patients. It's a success story.
Senator Kirk. If I could just finish up, I just hope,
though, that in your testimony you said we have a growing
shortage problem, which means for whatever reason, patients are
being disadvantaged.
Dr. Kweder. That's right.
Senator Kirk. And I'm particularly worried about their
lives being lost. As Senator Franken said, if we switch from
doxo to the other alternative, we just dropped the patient
survival rate by two-thirds, and I would like you to have
greater authority inside FDA to make that argument.
Dr. Kweder. We'll be happy to work with you on that. Thank
you.
Senator Kirk. Thank you, Mr. Chairman.
The Chairman. Thank you, Senator Kirk.
I have to excuse myself from presiding. Senator Enzi will
preside in my absence.
And next is Senator Franken.
Senator Franken. Thank you, Mr. Chairman.
I want to thank you both for your testimony.
Dr. Kweder, in her written testimony, Dr. Glied said that
43 percent of all shortages were caused by quality problems at
drug manufacturing facilities. I've also heard that when some
manufacturers have compliance problems with the FDA's good
manufacturing practices, they take their product off the market
rather than investing money to fix the problem.
What could FDA do to help maintain the quality of drug
lines while at the same time avoiding unnecessary shortages?
And how often does FDA's compliance office coordinate with the
drug shortages office so as to make sure that their actions do
not precipitate a shortage?
Dr. Kweder. Let me answer the last question first. We
coordinate regularly with our Office of Compliance and our
Office of Regulatory Affairs that is out in the field
conducting inspections. In fact, we recently have changed our
practice to require that before our district office people
issue a letter or our Office of Compliance issues a warning
letter, that they specifically address how any of the actions,
any actions proposed might result in a drug shortage, take that
into consideration.
We do it already, but this sort of cements that process and
assures it.
The kinds of quality problems that are occurring in these
plants, these are not people not crossing T's and dotting I's.
The key to producing a quality product for particularly these
injectable drugs is that they have to be produced under very
tightly controlled circumstances. I don't know how many of you
have ever been in one of these plants. If you're a woman,
you're not allowed to wear nail polish in the plant, something
that would seem to be quite permanent, because there's a risk
that if it gets into the air or into the system, it could
contaminate a product that would be injected into a cancer
patient's veins. So maintaining quality is really the company's
job.
The standards are very straightforward. They are the same
and have been, but modernized, current. They've been the same
for a long time. And counter to what some would say, they are
highly consistent across most Western nations. Our standards,
the European Union standards, Australia, and Canada, are highly
consistent and similar.
We do work with companies. The first time we do an
inspection and find a problem, we monitor them. We go back. We
check on their progress. We require that they report to us what
they are doing to address it. Oftentimes when we go back in and
re-inspect, we find that none of those things have been done.
So we go back through this again.
Most companies do an outstanding job. But there are some
that don't, and unfortunately some of the ones that are under
the most production pressure are making the most drugs. These
companies that are at the root of most of these shortages, Dr.
Glied pointed out, make hundreds of products, hundreds. There
is no cushion there for them to shut down a little bit to fix a
problem or shut down temporarily.
Senator Franken. Dr. Glied, according to a report your
office released in October, about half the shortages, at least
until 2010, were for oral medicines like tablets and capsules,
not for injectable drugs. But for 2010, 74 percent of shortages
involved sterile injectable drugs like anesthetics and
chemotherapies.
What brought about the sudden shortage of generic
injectable drugs? And several proposals to address this problem
have included changes to the physician reimbursement for these
drugs. Are we really going to solve this by changing how we pay
for health providers for drugs in shortage?
Ms. Glied. Let me start with your second question, which is
the easier one. As I think we pointed out, there's a quite
rigid disconnect between the price that health providers are
paid, the fee that they're paid to compensate for the cost of
procuring drugs, and the price that manufacturers are paid by
group purchasing organizations for those same drugs. In some
cases, for example, when drugs are used under the Medicare Part
A program, there's actually no fee paid in direct compensation
to the provider at all, but the price that a manufacturer gets
is based on a negotiation between a group purchasing
organization and that manufacturer that encompasses all the
drugs the provider uses regardless of who the payer is, whether
it's private insurance or Medicare Part A or Medicare Part B.
There's a really rigid disconnect there, and that's why I
think we believe that changing the prices that are paid to
health care providers would have no impact on the amount of
money received by manufacturers in this sector.
As to your first question, I think the problem is
multifactorial, but one thing that we saw in the data that we
looked at is that there has been a big increase in the volume
and number of drugs available to generic manufacturers over
this period, I think a very healthy increase that mainly came
about because a lot of branded products went off patent. So the
potential market for the generic manufacturers grew. At the
same time the population is aging, and these sterile injectable
drugs, that market is really growing very robustly.
In the beginning, what that led these manufacturers to do
is to increase their capacity utilization, and our hypothesis
is that that increase in capacity utilization just led to more
of the kinds of quality problems that Dr. Kweder has pointed
out. Then you start having this cascading effect, because there
are not that many manufacturers, not that many plants in this
business. Once one of them goes offline because they're having
a quality problem, it just cascades through the industry, and
that's why we anticipate that it won't be until the new
manufacturing capacity, which is in the works, really comes
online that this problem is going to solve itself, and until
then we really will need the FDA to keep managing it.
Dr. Kweder. And I would add that we are working with those
companies right now, as they are making plans for their new
plants and trying to build quality in.
Senator Franken. Thank you.
Senator Enzi [presiding]. Senator Merkley, and then Senator
Isakson.
Senator Merkley. Thank you very much, Mr. Chair.
I wanted to start simply by noting that the GAO report goes
through a host of different strategies that FDA uses, eight
different strategies, and that they fall largely into helping
with manufacturing problems, helping with importation, and then
flexibility in terms of allowing a drug to be marketed that
maybe doesn't have the right labeling or right quality.
It just strikes me as fascinating that a for-profit company
is running into a manufacturing problem and FDA is able to help
them resolve that problem. I don't quite understand. Can you
explain to me how it is that these experts in manufacturing
need your help to figure out how to solve a manufacturing
problem?
Dr. Kweder. I think that's a good question, and we struggle
with that to some degree ourselves. One of the reasons that FDA
can sometimes get involved is we see all of the companies. We
see where they've been. We have a broader view of manufacturing
processes than sometimes an individual company might. We also
are able to work with them to help them identify new strategies
because we've seen other companies use particular strategies.
But as to the broader question about why they would come to
FDA for advice, why they would need FDA's advice in the first
place, I'm not sure that I have an answer for that. What we can
do, though, is that we can help them prioritize by taking into
account things like products that we think may be medically
necessary or highly critical for patient care, and help them
prioritize potentially a panoply of problems that they're
trying to address at once.
Senator Merkley. Let me move on. I'll leave that as a bit
of a mystery for now.
But neither of you has really gotten into this question
that we keep hearing about, about the gray market, about groups
that are following the drug market well enough to realize
there's going to be a shortage and knowing that, basically
corner the market on that drug, buy up the surpluses and
accentuate the shortage, the scalping problem. And the fact
that it hasn't featured prominently in either of your testimony
is interesting to me because it's often put forward as part of
why there's been such a dramatic change over a 2-year period.
Is drug scalping a significant part of this problem?
Ms. Glied. I think that what we would say is that the gray
market is a symptom of the problem. I mean, it is a problem in
itself, but it arises because of the underlying problem of
shortages. If the problem of shortages weren't there, the gray
market would not be able to exist and survive. Addressing the
gray market is important because price gouging is a significant
issue, but addressing the gray market by itself is,
unfortunately, not going to solve the whole shortage problem.
Dr. Kweder. And I would add that we don't actually have a
lot of information about what's called the gray market. We get
reports from pharmacists or health care providers or health
systems about experiences they've had and what kinds of prices
that they're paying, but this isn't an area where FDA has any
authority, and it's one of the reasons that we are beginning to
work with the Department of Justice, and we'll also have to
work with the Federal Trade Commission, to try and understand
this a little better and see what we can do.
From our standpoint at FDA, some of the gray market
activities are a signal to us to be aware that there may be
counterfeit products involved, another challenge that we have
in this country. It's a signal to us to begin to go into that
zone and start to assess whether there may be counterfeit
products at play.
Senator Merkley. I'm running out of time, so I'll just note
that I want to explore this more, because just as we see with
tickets for a sporting event, if there is a high demand and low
supply, scalping is far more effective, but the scalping
accentuates the problem. And the fact that neither of you has a
firm grip on the role it's playing says we really need to dig
into this piece, because in many markets there's a response.
The response is it's illegal to sell beyond the face value of
the product. That can take the heart out of scalping overnight.
I want to find out, is that something we need to do in this
area?
Thank you, Mr. Chair.
Senator Enzi. Senator Isakson, and then Senator Bennet.
Senator Isakson. Thank you, Mr. Chairman.
Dr. Kweder, when you were responding to Senator Merkley's
question regarding a pharmaceutical company coming in to you
seeking advice when they've got a manufacturing problem, wasn't
that the question? It would seem to me that would be logical.
If I was producing a product and I was regulated by a
government entity and I had competitors, I'd sure come to the
Government rather than the competitor to give me advice,
because all I'm doing is telling them I've got a problem. Am I
right?
Dr. Kweder. I think so.
Senator Isakson. And does the FDA try and be a problem
solver when a manufacturer comes to them and give them
recommendations that they might have missed otherwise?
Dr. Kweder. We consider our job to be problem solvers, and
our job is to facilitate, help facilitate these companies being
able to make a high-quality product. That is at the core of
what we do.
Senator Isakson. You said in your testimony that you
prevented 96 shortages I think this year or last year.
Dr. Kweder. Actually, that's just since October 31.
Senator Isakson. Please tell us. I want to followup on
Mike's question. How did you do that? That seems like why we're
having the hearing, so I'd like to hear that.
Dr. Kweder. Yes. In a lot of those cases what we have done,
is worked with manufacturers to help them get certified
additional supplies of critical ingredients, to help them bring
a new production line on board, to make changes in their
manufacturing process, or to help solve quality problems, help
them find creative approaches to quality problems. They may be
thinking about an approach and aren't sure about it. They'll
come to us, and we'll have a conversation about what makes the
most sense and what's the most pragmatic.
Other things that we have done to prevent these shortages
are, we have gone to competitors of these firms and encouraged
them to ramp up production, thereby putting more in place on
the market so if a company having a problem feels like they
have to go offline, there will be supply available. In some
cases we have gone to sources that are outside this country to
help find alternative supplies.
Those are just some examples. In other cases where there
have been problems, where the company may be having a systemic
problem on multiple lines and we think that one production line
could be protected with additional controls to ensure quality,
we have helped them continue making a product while other
things around it were not able to be made.
Finally, we have done some very creative things where, in
response to one shortage, one company ramped up production and
found that the stress of increasing production was leading to
them having precipitate in their injectable drug. You looked at
it and it was cloudy. Well, we worked with them to figure out
that if you just warmed the vials, the precipitate would
dissolve. What they were able to do was label the drug with
that, send it packaged tightly with instructions and notify
hospital pharmacies that would be administering it that that
was the way to do it, rather than have to not ship the product.
Those are some examples.
Senator Isakson. Dr. Glied, I'm not a doctor, I'm not a
pharmacist, I'm not scientifically inclined, so I may say
something stupid right here, but the growth in cancer drugs in
particular, but a lot of drugs, are biologics. When you talk
about a sterile injectable, is that talking about a biologic?
Ms. Glied. It could be a biologic. I don't think most of
these are biologics.
Senator Isakson. Then my question----
Ms. Glied. I'm not a doctor either, so I have to confess.
Senator Isakson. OK, that makes two of us. With the growth
of biologics, have the shortages become disproportionately
biologic-based drugs, or chemical compound drugs?
Dr. Kweder. To date, the answer is no, but biologics do
offer really special and challenging problems because there are
not generic biologics, and they tend to be made by one company.
Now, the good news about that is that companies guard their
biologic production and monitor it very, very closely. But
there is always the risk of unanticipated problems.
We have had some of those. But the majority of the
shortages, the vast majority, have been for nonbiologics or
small-molecule drugs.
Senator Isakson. OK. Thank you, Mr. Chairman.
Senator Enzi. Senator Bennet, and then Senator Bingaman if
he returns. Otherwise, Senator Whitehouse.
Senator Bennet. Thank you. Thank you very much, Senator
Enzi. And thank you for your testimony, both of you.
Dr. Kweder, as you know, our country does not have a
nationwide drug distribution system to know where drugs are
across the supply chain from manufacturers to patients, and as
a result, when hospitals and pharmacies are approached by
distributors who may actually have an additional supply of
pharmaceutical drug that may be in shortage, the hospitals and
pharmacies can't always verify the legitimacy of that drug. And
even in this time of fiscal constraint, that's why I'm
supportive of a drug distribution system that does--while it
doesn't create unduly burdensome costs for any part of the
supply chain, it would provide us knowledge about where drugs
are in the system, and I wondered whether you'd think it would
be helpful for the FDA and other supply chain stakeholders to
have information on the legitimacy and pedigree of a drug,
particularly when a drug is in shortage.
Dr. Kweder. Yes. I think that it won't solve a drug
shortage problem, but it would allow hospitals, pharmacies, and
the agency to have a better idea of whether a product is a
legitimate product. I already mentioned that one of the
concerns that we have about the gray market is whether some of
these are actually signals of counterfeit, and that would make
assessing that very much more straightforward.
Senator Bennet. And it's my point of view, I don't know
whether you would agree, but that there are a lot of reasons
why we would want to be able to track pharmaceuticals across
the country, but those reasons are particularly in stark relief
when you think about the shortage issues. We'll look forward to
working with you on that.
Dr. Kweder. Thank you.
Senator Bennet. I had a second question for you, as well.
You mentioned in your testimony that FDA can use its regulatory
discretion for temporary importation of nonFDA-approved
versions of critical drugs when a shortage can't be resolved
immediately, and you've noted that there may be foreign
suppliers--you were just talking about this with Senator
Isakson--that possess or have access to a critical drug but are
not FDA-approved and may need to be inspected.
At an earlier hearing on the safety of our drug supply, GAO
reported that at FDA's current pace, all establishments abroad
could be as long as 9 years from now. I wonder whether you
think that FDA's desire to better use third-party resources and
to use inspection information from other top-tier countries to
maximize resources will have a positive effect on reducing drug
shortages.
Dr. Kweder. I think it already is having a positive effect
on reducing drug shortages. We get a great deal of information
from our regulatory counterparts in other countries, and they
don't necessarily obviate the need for us to do inspections. We
will often subsequently go and do that. But they provide us a
great deal of assurance when we are using regulatory discretion
to allow temporary importation of a critical-need product.
We don't do that lightly. We look very carefully at what we
should know from other countries' inspections about that
particular product, and we haven't used it--it's not the first
thing we try to do when we're addressing a shortage, but it is
an extremely important tool.
Senator Bennet. Actually, while we're on that topic, just
out of curiosity, what do we know about drug shortages in other
countries?
Dr. Kweder. This is not a uniquely U.S. problem. This is
occurring in other countries as well, and they utilize many of
the same tools that we do to try and resolve them. We have
monthly teleconferences with some of our regulatory
counterparts, particularly the EU, Australia and Canada, to
share information about shortages, and we work together to try
and identify alternate suppliers, other creative solutions.
Senator Bennet. Are there differences in the categories of
drugs that are in short supply in other places?
Dr. Kweder. I would say, in general, it varies a lot.
Sometimes there is a lot of overlap. Sometimes there's not much
overlap at all. Categories, I would say they're similar. Drugs
that are hard to produce or that require specialized facilities
to produce are much more vulnerable to this.
Senator Bennet. Dr. Glied, do you have anything you'd like
to add to that?
Ms. Glied. Different countries have responded that they
have shortages in different areas. We essentially share a
supply chain with Canada, so they tend to have shortages in
exactly the same areas that we do. When you go to countries
like Australia that are farther away, their markets are
operating somewhat differently. But I would agree with Dr.
Kweder, that some of these drugs, ones where it's really hard
to ramp up production because the facilities are specialized,
are always going to be the ones most prone to shortages in
every country.
Senator Bennet. Thank you very much, both of you, for your
work on all of this. And, Mr. Chairman, thank you for holding
this hearing.
Senator Enzi. Senator Whitehouse and then Senator
Blumenthal.
Senator Whitehouse. Thank you, Chairman.
We've spoken quite a lot about the gray market in the
course of this hearing. Could either of you describe for me
what the gray market looks like, or is there a report that is
not in the record of these proceedings that has taken a look at
what the gray market looks like and who is participating and
what their motivations are?
Ms. Glied. We have not done a report on the gray market. I
believe there is a report. I think the group purchasing
organizations have put out a report on the gray market. I'm not
absolutely sure.
The gray market is a market that is buying drugs, often not
directly from the manufacturers, often from suppliers, from
providers who have extra capacity, we've been told. Some of
these might be infusion clinics or somewhat--they're not
necessarily the hospitals and physicians who are participating
in the typical GPO arrangements. It's a very fragmented market.
There are a lot of players in it, but I think we don't know
very much about it because it's gray.
Senator Whitehouse. For the record, doctor, I see your head
nodding in agreement?
Dr. Kweder. Yes, my head is nodding in agreement. We don't
know a lot about it I think because, as Dr. Glied said, from
the reports that we get, it does seem to be quite fragmented.
For example, one of the ways that health care providers will
learn about a product is they'll receive a fax in their office
from some source advertising availability of a drug that's in
shortage at an exorbitant price. In fact, I can tell you I did
my fellowship training at Women and Infants Hospital, and some
of my colleagues there have sent me some of these things that
we have passed on.
Senator Whitehouse. The gray market could include something
as benign as Women and Infants Hospital calling around to other
hospitals and saying we're short on this drug, do you have any
to spare and would you sell it to us, which I think everybody
in this room would think is a pretty benign form of trying to
resolve the drug shortage issue. But it could also involve
speculators who are--I see two heads nodding actively, just for
the record--who are actively engaged in buying these products
for the sake of hoarding them, selling them, and profiteering
off of the shortage.
Dr. Kweder. Yes. It's the profiteering that really raises
red flags. It's not unusual in a community for one hospital to
be in short supply of a particular product--maybe they've just
used more this month than last--and to seek availability from
another local facility. That isn't what we worry about. We
worry about the latter.
Senator Whitehouse. And I suppose you could make a case
that given these shortages, and given the fact that hospitals
and providers can misjudge how much they're going to need,
there's actually a healthy role for a broker to be in the
middle of this and find a profitable niche as a market maker.
On the other hand, if they're sending unsolicited faxes and
they're seeking to charge a significant markup, it begins to
look pretty sordid. What type of practices are you seeing out
there at the worst end of the spectrum?
Even anecdotally.
Ms. Glied. Just one of the things that I would also note is
that one of the concerns in the gray market is that the quality
of the goods, their pedigree, knowing what they actually are,
is much harder to ascertain. So when these are purchased
through traditional distribution channels, everybody has a good
sense of what they're getting. And I think another concern with
the gray market is also just the quality concerns. I just want
to note that. We haven't heard reports of specific issues with
the gray market. You might have heard more.
Senator Whitehouse. And in terms of price gouging, what
anecdotally are you hearing as the worst case scenarios that
are taking place?
Dr. Kweder. We have heard of 100-fold price increases.
Senator Whitehouse. Not 100 percent, 100-fold.
Dr. Kweder. One-hundred-fold price increases.
Senator Whitehouse. A $4 drug going for----
Dr. Kweder. A $4 drug going for----
Senator Whitehouse [continuing]. Four hundred dollars.
Dr. Kweder [continuing]. Going for $400, or $4,000. I mean,
those are the kinds of reports that we hear of, and I think
those are the ones that stand out, and probably many of them
aren't quite to that extent. But those are the kinds of reports
that many of your colleagues' constituents have sent in letters
to us.
Senator Whitehouse. I'll close because my time is expiring.
But it strikes me that the two considerations are related in
that an entity that is willing to engage in that kind of
gouging is probably not morally opposed to selling low-quality
or phony product as well for that kind of a markup.
I'll yield back. Thank you, Mr. Chairman.
Senator Enzi. Thank you.
Senator Blumenthal.
Senator Blumenthal. Thank you, Mr. Chairman. And thank you
both for your work and for your testimony today. I want to just
take forward some of Senator Whitehouse's questions.
In fact, there has been a report very recently by Premier
which showed that in a 2-week period, 2 weeks, beginning of
this year, 1,745 examples of gray market offers from 42 acute
care hospitals, an average mark-up of 650 percent, and we're
talking here about drugs that are absolutely critical in
oncology, in cardiology, in emergency rooms. These workhorse
medicines are not luxuries. They are essential critical care
medicine, and someone is profiting. It is more than a symptom.
It is more than just a by-product. It is part and parcel of a
market that isn't working.
Dr. Glied, you have said that there is a degree of
concentration here that isn't seen in many other markets. That
is a very polite way of saying that there is no competition. We
have had a discussion here for close to 2 hours, an hour-and-a-
half, and the word ``competition'' so far, at least so far as
I've heard, has not been mentioned. There is no competition
here, which leads to these gray markets.
So my initial question to you is, how many findings in the
2 months since the President's order have been referred to the
Department of Justice by the FDA?
Dr. Kweder. I will have to get back to you on that, on the
specific number.
Senator Blumenthal. Do you know of any?
Dr. Kweder. Yes, I do.
Senator Blumenthal. How many do you know of?
Dr. Kweder. I know of at least two, but I think there are
more, and I'll have to get back to you on that.
Senator Blumenthal. I think that is very, very important,
and as much detail as you could provide I would appreciate.
Don't you believe that some kind of overarching and
intensive investigation is necessary here by either the FTC or
the Department of Justice?
Dr. Kweder. Let me just add that price gouging isn't
something that would necessarily be reported to FDA. The
information, the reports--the kinds of things that our Drug
Shortage Program hears about is mostly hearing from companies,
sometimes from health care providers or hospitalists.
The specific report on the price they paid, that isn't
something they'd bring to our attention.
Senator Blumenthal. I understand that you may not receive
all of the reports, but the President's order directs that you
consult and--
Dr. Kweder. When we do, we do--
Senator Blumenthal. You do give that information to the
Department of Justice.
Dr. Kweder. Yes.
Senator Blumenthal. That's why I'm asking you. Don't you
think that there is a need for an investigation here by the FTC
or the Department of Justice in light of these absolutely
astonishing and appalling markups as part of the gray market?
Dr. Kweder. It's not for me to decide who should do it, but
I do think that we would like to understand this better.
Senator Blumenthal. Well, I would take that as a yes,
unless you disagree. And I recognize----
Dr. Kweder. You can take that as a yes.
Senator Blumenthal. Thank you. Do you know who is
profiting?
Dr. Kweder. We do not know because we don't understand the
whole lay of the land. There are certainly--there is a system
out there of legitimate wholesalers and distributors. Whether
those are the same parties who are in the business anyway who
are involved in this, or whether there are just sort of people
coming in and out of the landscape, we just don't know.
Senator Blumenthal. So it could be the manufacturers?
Dr. Kweder. I guess it could be, but we don't have any
reason to think that it is.
Senator Blumenthal. And it could be the wholesalers or
distributors?
Dr. Kweder. That's right. We just--
Senator Blumenthal. And it could be the hospitals.
Dr. Kweder. We just don't know.
Senator Blumenthal. So there really is a need for some kind
of fact-finding here on a broader basis than just an individual
finding of a particular drug being in shortage.
Dr. Kweder. Yes, and we understand--I mean, one of the
reasons it's called--it's not black or white, it's gray. It's
also gray, as Dr. Glied said, because we don't understand it
very well. And so having a really clear picture of how this
operates, who is involved, and what the factors are that are
motivating it and rewarding it would be very helpful.
Senator Blumenthal. I am almost out of time, but I just
want to suggest, and you should feel free to disagree, that at
the very minimum there ought to be a ban on any secondary
sales--that is, sales after the initial purchase--at a price
higher than that initial purchase of these kinds of drugs,
which would be a remedy against this kind of hoarding and
profiteering and gray market. In other words, a hospital or a
wholesaler or anyone that purchases the drug should not be
permitted to sell it at a higher price than it was originally
purchased. That's the basic concept. I recognize there will be
a lot of elaboration on it, but I'd just open it for your
comment, if you have any.
Ms. Glied. I think it's something that we should definitely
take under consideration and talk to the folks at the DOJ and
FTC about how that might work.
Senator Blumenthal. Thank you, Mr. Chairman.
The Chairman [resuming the chair]. Senator Casey is next.
Senator Casey.
Statement of Senator Casey
Senator Casey. Mr. Chairman, thank you very much. I
appreciate you having this hearing, and I appreciate the work
you've done, and the Ranking Member, and so many others on both
sides of the aisle at a time when we have a lot of news
stories, many of them based upon the reality of Washington
about how Democrats and Republicans don't work together. This
is one issue where you've had I think a broad consensus, and
not just for purposes of a hearing but over many, many months
now to come together, and I've been so honored to work with
people in both parties, working on the original legislation
that Senator Klobuchar and I introduced, and I know I missed
her presentation today, so I'm first of all apologizing for
that. I've been in and out of the hearing.
I want to thank our witnesses. The gravity of this is hard,
really hard to fully comprehend or fully articulate because
this is so immediate and so grave for families. I would like to
recite a story, and I'll abbreviate this, but it's the story of
Sarah Batalka. She's a 29-year-old woman from Pennsylvania, and
here's what she wrote to me, and I'm reading in part.
She said,
``In April of this year, I got the worst possible
news. There's a drug shortage crisis nationwide. I was
told by my home infusion company that their supply of
magnesium sulfate, a key ingredient in my IV bags, and
one without which I cannot survive, was dwindling, and
that they had only enough to fill the IV bags for a few
more weeks.''
She goes on to say,
``To give you some idea of the impact of this news on me,
please consider what it would feel like to you if someone told
you that there would be only enough air supply left for 3 weeks
of breathing.''
That gives you a sense of the intensity and proximity of
the threat that people feel.
I also will note, and I'll introduce Dr. Maris later for
the next panel, but a lot of his testimony, working as he does
so well at Children's Hospital in Philadelphia, is about the
impact on children, children with leukemia, and all of the
horrors and nightmares those children live through and their
families.
This is about as urgent as it gets for work that we're
supposed to be doing in Washington.
Let me just try, in the remaining time I have, to just get
to a couple of questions.
Dr. Glied, and I know you're speaking from the vantage
point of Health and Human Services, I want to ask you, in your
testimony you said that many--and I'm paraphrasing here--but
many of the current supply problems will be alleviated when new
capacity comes online. I know you may have addressed this more
than once, but I want to make sure that I understand.
How do you arrive at that assessment? I didn't read your
exact words, but how do you arrive at that assessment that you
think this will be alleviated when new capacity comes online?
Ms. Glied. When we spoke to the generic manufacturers, and
also just read news reports and looked at information from the
FDA, we learned that several of the manufacturers are planning
to build or are already building new manufacturing capacity and
upgrading their existing capacity. Our analysis suggested that
the big problem here is that the existing capacity is just not
enough to really be able to manage, to produce the amount of
drugs that there's now a demand for with a sort of sufficient
cushion to be able to deal with quality problems that may come
up or changes in other manufacturers' production lines and
other things like that.
We really need to have that extra capacity come on before
we can really solve this problem. We can manage it until then,
but it isn't going to go away by itself until that extra
capacity is there.
Senator Casey. OK. What a lot of us are worried about,
including you and everyone here, is that there may not be an
alignment between that capacity coming online and the urgency
of the problem when you have only weeks within which to solve a
shortage problem.
Let me just ask it this way. Tell us whether it's
responding to us or responding to Sarah, whom I just quoted a
moment ago, or anyone else, tell us what are the things we've
got to do in the next couple of weeks or months to address this
problem.
Ms. Glied. What we have to do in the short run is really
help FDA try and manage the situation we're in right now, which
is one of limited capacity and big demand. We can't produce
more. What we have to do is align what we're producing better
with the need, and that's what we have to do in the short run.
Senator Casey. Dr. Kweder, did you have something to add to
that?
Dr. Kweder. I think what we need to do is get companies who
are experiencing production problems to engage with us early
and not wait until they have a critical situation. We have
learned by doing this for years now that it may not address 100
percent of these circumstances, but boy, does it help us
mitigate them and prevent them. Preventing shortages is
absolutely what we should be looking at.
Senator Casey. Thank you.
[The prepared statement of Senator Casey follows:]
Prepared Statement of Senator Casey
Mr. Chairman, I would like to thank you and Ranking Member
Enzi for convening this hearing today. The unprecedented growth
in prescription drug shortages is among the most pressing and
serious issues confronting the American health system. It is
unacceptable that we are unable to help seriously ill patients
not because we don't know how, but because we don't have enough
of a product that we know saves lives to go around. How can
this be happening in our country? We cannot allow this to
happen on our watch.
This is a problem that was brought to my attention in the
fall of 2011 by a hospital in Pennsylvania: Lancaster General.
Since that time, I have heard from more than 50 hospitals and
pharmacists in the State about how the drug shortage crisis is
affecting their ability to provide care. I am glad that we have
a witness here today, Dr. John Maris from the Children's
Hospital of Philadelphia, to talk about how this issue has
impacted children, who are among our most vulnerable.
I have also heard from individual patients themselves,
about how this crisis is affecting their health and--quite
literally--their lives. I would like to share a story that I
received from a constituent, which describes the severity of
these shortages and how urgently we must work to address these
issues.
Sarah Batalka, a 29-year-old woman from Quakertown, was
born with a mitochondrial disease. For 6 years now, she's
needed help maintaining her blood levels of critical
electrolytes, including magnesium and potassium. In addition to
receiving them in pill form, she gets them through IV's that
provide enormous doses of magnesium and potassium daily. These
intravenous medications keep her alive. She cannot survive
without them.
Now I would like to read from a letter she wrote to me, so
you can hear her own words. She writes:
``In April of this year, I got the worst possible
news: there is a drug shortage crisis nationwide. I was
told by my home infusion company that their supply of
IV magnesium sulfate, a key ingredient in my IV bags
and one without which I cannot survive, was dwindling
and that they only had enough to fill my IV bags for a
few more weeks. To give you some idea of the impact
this news had on me, please consider what it would feel
like to you if someone told you that there would only
be enough air supply left for you for 3 weeks of
breathing. I so depend on this medication for survival
that its unavailability would indeed be the same as you
having your air supply cutoff.
My home infusion company explained to me the reasons
for the shortage. They told me that the FDA had to shut
down plants that manufacture IV magnesium sulfate due
to quality control issues: visible particulate matter
had been found in what is supposed to be a sterile,
injectable drug. I was also told that this has created
a nationwide shortage, affecting individuals like
myself who depend on IV nutrition and/or electrolytes .
. . cancer patients, expectant mothers . . . , dialysis
and kidney transplant patients, and others. IV
Magnesium sulfate is, especially in cases such as mine,
a life-sustaining drug needed by many different kinds
of patients with many different medical conditions.
There is no substitute for IV magnesium sulfate for us,
just as there is no substitute for oxygen, and you
can't survive without it. I was shocked to learn that
it was even possible for there to be a shortage of such
a drug in our country. From what I understand, this is
only one example of one drug on a list of hundreds of
life-sustaining medications that are currently
unavailable.''
With little than 2 weeks supply left of her medication,
twice this year Sarah has had to reach out to our office for
help in finding her medication. Fortunately, in Sarah's case,
her home infusion company was, at the last minute both times,
able to purchase enough IV magnesium sulfate to keep her alive
for the time being.
But what will happen tomorrow? That is the question that is
before us today and I pray that we can find a way to ensure
that we move beyond this crisis.
Chairman Harkin, I know our staffs have been working with
others in the bipartisan work group deliberatively on this
issue for many months now, and are working on recommendations
for how the HELP Committee can help solve this crisis. I hope
that we can find a way to move forward on the legislation--S.
296, the Preserving Access to Lifesavings Medicines Act--that
Senator Klobuchar and I introduced earlier this year, as I
believe having an early warning system in place is fundamental
to addressing these issues.
I have spoken with others of you on the committee,
including Senator Blumenthal, about this crisis and I know that
many of you share this same commitment to moving this
legislation forward, and identifying additional solutions to
advance rapidly through the FDA reauthorization or otherwise.
I look forward to working with you, and learning more from
our witnesses today.
The Chairman. Thank you, Senator Casey.
Senator Hatch.
Statement of Senator Hatch
Senator Hatch. Thank you, Mr. Chairman.
Welcome to both of you. We appreciate the work you do and
appreciate you being here.
As I've been reviewing this, there are a number of reasons
for these shortages that have been given. For instance,
manufacturers have asserted that current shortages are
principally due to manufacturing capacity being temporarily
restricted, primarily due to FDA regulatory actions. Doctors,
hospitals, and some patients have suggested that the problem is
due to economic factors, focusing on the adequacy of payment
rates for the products. And, of course, government-mandated
rebates have lowered the payment levels for these products to a
point where they say they're no longer cost effective for
manufacturers to produce them, or at least make investments in
updating manufacturing capacity to comply with current FDA
supply requirements. Others say that the FDA has asserted that
the problem principally lies with a recent increase in the
number of generic drugs that has exceeded existing
manufacturing capacity.
Now, some outside experts point to the FDA's recent actions
to review unapproved drugs, that were on the market prior to
the current regulatory requirements, as being contributors to
the shortage problem as well. I might say some analysts and
stakeholders have blamed wholesalers for contributing to the
shortage problem by rapidly increasing prices when drugs are in
short supply, and I'm sure there are other arguments that are
made as well.
It's a complex set of problems.
Let me just ask you this, Dr. Kweder. The agency announced
yesterday an interim final rule that will expand to the current
definition of sole manufacturers to increase the number of
manufacturers that are required to notify FDA about a
discontinuation of product. Now, does the Executive order
issued by the President and the interim final rule published by
the agency, does that negate congressional action to address
shortages, or is more required to mitigate current and future
shortages?
Dr. Kweder. Senator, the interim final rule really only
clarifies and expands what we have as existing authority. That
is very, very narrow. It really speaks to notifying FDA of a
disruption or discontinuance of any type of a product where a
company is the sole supplier of that product. The majority of
shortages and potential shortages that we are trying to cope
with don't fall into that category. So it really is not the
sole answer. We think this will help, but it is not the sole
answer. We can't do this on our own.
Senator Hatch. OK. Let me just say it's apparent that we
have to do something here. The question is what. I listened to
Senator Blumenthal's suggestion. It seems to me that would take
away the desire to even be in the drug delivery business, and
it would certainly put even more fiscal controls.
On the other hand, we've got to do something to maybe make
sure that these drugs--for instance, it's said that 80 percent
of the shortage really is in the area of sterile injectables,
and these are really important for people with very serious
maladies. And part of the problem, they claim, is the reduction
in price for these products, and I'm not sure that's a good
argument. But I'd like to get your opinion on that, if either
one of you can comment.
Ms. Glied. I think our analysis suggests that it's not a
problem of a reduction in price, that prices are actually
rising for those drugs that are in shortage, and that prices
paid to manufacturers, that's really not been a source of this
problem. We look at information from the manufacturers, as well
as from public sources, and those sources seem to suggest that
these manufacturers see a robust market ahead of them and that
price is not the issue.
Senator Hatch. Let me just ask one other question. For
example, irinotecan, lost patent protection in February 2008,
as I understand it. At that time, nine generic competitors were
competing in the market. The Federal reimbursement in Medicare
in the second quarter of 2008 was $126.24 per dose.
Today there are only three manufacturers left in the
market, down from a high of 15 manufacturers. Reimbursement by
Medicaid is now $4.66 per dose. How can we increase the
manufacturers in the market when we've reduced the
reimbursement over 90 percent? And I understand the desire to
reduce the reimbursement cost, but it seems kind of ridiculous
to me.
Ms. Glied. I just want to point out that that reimbursement
cost, whatever it may be, is not the price that's paid to the
manufacturers. That's a reimbursement that's paid to providers
and hospitals, but they get their drugs through contracts that
group purchasing organizations negotiate with manufacturers,
and those contracts have only one price in them, regardless of
who the payer at the end is. The fact that the price is
changing, the fact that the price at the hospital or provider
is changing is really disconnected from the price received by
the manufacturers.
I would point out that the other thing to note is that when
a drug moves from branded to generic, it takes a while until
the information that Medicaid and Medicare get on prices
adjusts. We know that when prices move from branded to generic,
their price falls a lot, and that's because of the patent
expiration. That would not be reflected contemporaneously. So
the price, that high price that you're seeing is the price that
still reflects when the drug was on brand, not the price that
existed when the drug went off patent.
A big piece of that, a big chunk of the reductions in
prices is the fact that patent expirations are happening and
drugs are moving from the branded to the generic market.
Senator Hatch. What is the price on that for the
manufacturer today?
Ms. Glied. I couldn't tell you, and I'm not even sure that
that would be publicly available knowledge. Those are private
contracts.
Senator Hatch. All right. Maybe that's not the way we
should look at it, then.
My time is up, Mr. Chairman. I didn't mean to go over.
The Chairman. That's fine. Thank you, Senator Hatch.
Senator Hagan.
Statement of Senator Hagan
Senator Hagan. Thank you, Mr. Chairman, and thank you and
Ranking Member Enzi for holding this hearing today.
I'm concerned, obviously, about this issue, and I've got a
particularly heart-wrenching story I wanted to share, Mr.
Chairman.
A woman, Ms. Sheets, had recurrent breast cancer, and she
lived in the Winston-Salem area of North Carolina. The second
time her breast cancer returned, it also affected her liver.
And she was on doxo, and her doctor said that when a patient is
being treated for metastatic breast cancer and is improving or
stable, they continue the same therapy until they progress,
which for first-line therapy could be a year. And when doxo
became in short supply, her doctor waited to see if it would
become available rather than switching her course of treatment.
But after 1 month, this woman had to be started on another
type of treatment, and for her, a less-effective drug, and
sadly, her breast cancer metastasized to her brain very soon
after the initiation of that regimen, and then she died within
3 weeks of that diagnosis. This is obviously a very tragic
story, and we continually hear from cancer patients like this
across the State. And so I'm looking forward to seeing what we
can do about this issue.
Dr. Kweder, I'm very concerned about the drug shortages
that are currently affecting the way we treat patients in our
country, just like Ms. Sheets. And the President's recent
Executive order directed the FDA to expedite its regulatory
reviews, including reviews of new drug suppliers, manufacturing
sites, and manufacturing changes whenever it determines that
expedited review would help to avoid or mitigate existing or
potential drug shortages.
However, I am aware that applications for generic
injectable drugs currently on the drug shortage list have been
pending with the agency for more than 2\1/2\ years.
What is FDA doing currently to expedite review of
applications for drugs that are currently on the drug shortage
list?
Dr. Kweder. Senator, we are absolutely expediting those.
What we do is when we see a potential drug shortage--we don't
wait until there's a shortage. When we have information about a
circumstance in a company that might lead to a drug shortage,
we look at our queue, which is long, of generic applications
for all kinds of things, and we go in and we try to find any
application that we might expedite that might address that
particular circumstance.
Sometimes the companies come to us and they tell us, ``You
know, I've had this application pending. It wasn't critical
before, but it appears that it is now.'' And we will go right
in and pull it out of the queue and address it and can turn
things around in a matter of weeks to months and get it done.
Senator Hagan. I've specifically heard from a company that
is on the list for 2\1/2\ years for this generic injectable.
Dr. Kweder. And that may well be the case, but they may be
one of five producers of a generic injectable and not one that
we would necessarily see as a high priority to pull out.
Senator Hagan. But the drug is on the drug shortage list.
Dr. Kweder. The drug is on the drug shortage list? If it is
on our list of potential drug shortages, problems that might
lead to shortage, we would pull that. And if there is a company
that's in that circumstance and we've missed it, we need to
know about that.
Senator Hagan. OK. We will definitely get back to you on
that one.
Dr. Kweder, how has the FDA prioritized addressing the drug
shortage problem as part of its agency's goals? And what do we
need to do, what does the FDA need to do in order to make this
a priority? For example, more authorities? More resources? Et
cetera.
Dr. Kweder. We have done a great deal since the Executive
order came out at the end of October. We've doubled, more than
doubled the size of our Drug Shortage Program that does all the
coordinating related to this. I'm happy to say we have--
Senator Hagan. You have more than doubled--
Dr. Kweder. The size. As of October 31, we had about four-
and-a-half people on it. We now have eight and are expecting
three more in January coming on board, I'm happy to say. A
number of commissioned officers are joining this program. The
Administration also has announced its support for the
bipartisan legislation, some of which we heard about from
Senator Klobuchar this morning, that would give us more
authority to require companies to notify us early if they have
any problem with manufacturing or otherwise that could result
in a drug shortage. That is where we can make a difference.
In the long run, Dr. Glied is right, better production
facilities that are more reliable and can produce high-quality
products consistently is what will really address the big
picture. But in the interim, FDA knowing about these potential
situations, companies coming to us allows us to work with them,
prioritize the work in a way that allows us to intervene and
prevent the shortage in the first place.
Senator Hagan. How many manufacturers have actually come
forward to notify you of coming shortages?
Dr. Kweder. We have had, since October 31 and the Executive
order and our other activities, we have had 61 notifications
mostly from companies, some from hospitals and other things,
but 61. The important thing is that that's over the course of
about a month to 6 weeks. Our usual rate is about 10
notifications per month. And we know that companies have been
reluctant to come to us. They don't want to draw attention to
themselves. But we are seeing a real move in the industry. The
Generic Drug Manufacturing Organization is helping get the word
out. We're trying to work together to solve these problems
before they occur.
Senator Hagan. Thank you, Mr. Chairman, and we will
definitely be following up with you. Thank you.
Dr. Kweder. Thank you.
The Chairman. Thank you, Senator Hagan.
Senator Mikulski.
Statement of Senator Mikulski
Senator Mikulski. Mr. Chairman, I know the hour is late.
This has been a very needed conversation and I look forward to
reviewing the testimony. I suggest we move to the next panel. I
ask that my opening statement be included in the record.
There is such compelling interest in this issue in Maryland
from iconic institutions like Hopkins and the University of
Maryland, both research and clinical practice, and to all those
wonderful doctors that just want to make sure their patients
have what they need when they need it.
So let's move on with the panel and move on with an action
plan.
[The prepared statement of Senator Mikulski follows:]
Prepared Statement of Senator Mikulski
Thank you Chairman Harkin and Ranking Member Enzi for
having today's hearing on prescription drug shortages. This is
a local, State and national problem that, unfortunately,
affects all of us.
I am glad to be a member of the bipartisan Drug Shortage
Working Group, where our job is to ensure that we have the
right legislative framework with the right enforcement teeth in
place to ensure that our Nation's patients and health care
providers are able to access the prescription drugs they depend
upon.
I have heard from Maryland hospitals, doctors, nurses and
patients that drug shortages are a serious problem with serious
consequences.
Maryland hospitals are seeing shortages of over 100 drugs.
These shortages affect patient safety and patient care. There
are poor patient outcomes due to delayed treatment. Doctors and
nurses are forced to use drugs that they aren't familiar with,
which can lead to medical errors.
Maryland hospitals--being the innovators they always are--
have implemented some regional solutions to manage the problem.
The University of Maryland and Johns Hopkins University are
working with the Veterans Administration to open up their
pharmacies to each other to manage shortages and minimize harm
to patients.
Like many complex issues, our Nation's drug shortage
problem has many root causes.
There is poor product quality. Manufacturers can't--or
aren't--complying with Food and Drug Administration (FDA) good
manufacturing practices. The FDA has more advanced science and
testing capabilities and are catching more quality problems
than in the past.
Manufacturers can't access raw materials.
Business and market forces are affecting drug availability.
Manufacturers close plants when problems arise and stop
producing drugs that aren't profitable. Some drug companies
have expanded the number of products they manufacture without a
corresponding expansion in production capacity.
Wholesalers and health care providers aren't maintaining a
large inventory of drugs to carry them through a supply
disruption.
The FDA lacks authority to require notification from
manufacturers when a plant shuts down, which could lead to a
drug shortage. Patients and hospitals are then caught off-guard
and get little or no notice that a shortage is imminent. This
leaves hospitals and patients with no time to prepare and
leaves the FDA with no time to find a solution, such as working
with another manufacturer to increase production of the drug in
shortage.
Bad actors in ``grey markets'' are selling fake, expired or
illegally imported prescriptions. Some are hording drugs and
hiking up the prices--exacerbating the problem.
President Obama issued an Executive order on October 31 to
immediately take action to reduce shortages; but we can and
must do more.
I have heard from stakeholders about potential solutions
including: penalties for price gouging; requiring manufacturers
to give notice when there is a manufacturing issue that could
cause a shortage, which is what Senator Klobuchar's bill would
do; improve coordination and consultation among FDA review,
inspection and compliance staff to get more manufacturers to
enter the market and get manufacturing lines re-inspected and
running again in order to reduce the likelihood of shortages.
I look forward to hearing from the witnesses about their
recommendations and will fight to include the best solutions in
the Prescription Drug User Fee Act.
The Chairman. OK. Thank you very much, Senator Mikulski.
I thank the panel. You've been very, very excellent
witnesses. Thank you very much for your work and for being
here.
Now we'll call our next panel, Dr. Marcia Crosse, Mr.
Murray Aitken, and Mr. Ralph Neas.
Dr. Marcia Crosse, Director of Health Care for the
Government Accountability Office. Dr. Crosse has been at GAO
since 1983, has extensive experience evaluating areas such as
biomedical research, medical product safety, and pharmaceutical
regulations. Most recently she led the team that issued today's
GAO report on drug shortages.
Murray Aitken is executive director of the IMS Institute
for Health Care Informatics. In this position, Mr. Aitken
collaborates with other experts in the public and private
sectors to provide information services and analytics for the
health care industry. He led the team at IMS that published a
report in November entitled ``Drug Shortages: A Close Look at
Products, Suppliers, and Volume Volatility.''
Next we have Mr. Ralph Neas, president and chief executive
officer of the Generic Pharmaceutical Association. Mr. Neas has
spent his career focusing on civil rights and health issues,
having previously served as the executive director of the
Leadership Conference on Civil Rights, and most recently as the
CEO of the National Coalition on Health Care.
We thank all of you for being here.
I'm going to yield to Senator Casey for purposes of
introducing our final witness, Dr. Maris.
Senator Casey. Thank you, Mr. Chairman.
Dr. Maris, welcome. Welcome to the whole panel. I haven't
had a chance to personally say hello to Dr. Maris today because
I can't reach that far, but we'll say hello after the hearing.
Dr. Maris is chief of the Division of Oncology at
Children's Hospital of Philadelphia and the director of the
Center for Childhood Cancer Research. He's also the director of
the Pediatric Oncology Program at the Abramson Cancer Center at
the University of Pennsylvania. He's nationally and
internationally recognized for his work in translating research
about childhood cancers from the labs to the patients. His team
at Children's Hospital has been able to identify the main genes
associated with neuroblastoma, a cancer that can be extremely
aggressive. In the quest for a cure, they have moved some of
these discoveries toward new therapies, a number of which are
now in clinical trials.
Dr. Maris, we're grateful for your work, and thank you for
being here today with us.
The Chairman. Thank you very much, and thank you all for
being here. Your statements will be made a part of the record
in their entirety. We'll go from left to right. If you could
limit your opening statements to 5 minutes, we'd certainly
appreciate that.
Dr. Crosse, welcome and please proceed.
STATEMENT OF MARCIA G. CROSSE, Ph.D., DIRECTOR, HEALTH CARE,
GOVERNMENT ACCOUNTABILITY OFFICE, WASHINGTON, DC
Ms. Crosse. Thank you, Mr. Chairman. Mr. Chairman and
members of the committee, I'm pleased to be here today as you
examine prescription drug shortages. As you stated, Mr.
Chairman, today you're releasing GAO's report on FDA's handling
of drug shortages prepared in response to a request from you,
Senator Casey, and Senator Blumenthal. I will discuss some of
our findings from that report.
As we've heard, the number of drug shortages has grown
substantially, more than tripling in the last 5 years, and drug
shortages are currently at record levels. Over half of the
critical shortages involve generic injectable drugs with
certain therapeutic classes such as anesthetic, oncology, and
anti-infective drugs among those most often in short supply.
Our review of specific shortages shows that the majority were
caused by manufacturing problems which are particularly likely
to occur with sterile injectable drugs.
My remarks today will focus specifically on what FDA can
and cannot do to respond to drug shortages, and how the agency
has responded when drug shortages have occurred. We've heard
from FDA about some of the things that they can do, and I'll
come back to that. But what is it that FDA cannot do?
FDA cannot require manufacturers to report actual or
potential shortages to the agency or the public, or require
manufacturers to take certain actions to prevent, alleviate, or
resolve shortages. FDA cannot force manufacturers to make a
drug or to increase the production of a drug that's in short
supply. It cannot control the distribution of drugs. It cannot
prevent drugs from being sold into the gray market, and it
cannot control prices. These distribution concerns have
frequently been highlighted in recent discussions of shortages,
and hospitals are being offered gray market drugs to fill
shortages at prices sometimes hundreds of times above normal.
What is it that FDA can do? Because FDA usually doesn't
know about a shortage until it is well under way, the agency's
approach to managing drug shortages is predominantly reactive.
As FDA testified, the agency takes multiple steps to respond to
drug shortages such as providing assistance to manufacturers to
resolve quality problems.
In addition, FDA encourages other manufacturers to increase
production. It allows some products to continue to be marketed
despite labeling or quality problems, and it has occasionally
permitted the import of foreign versions of drugs.
FDA may also expedite its review of relevant drug
applications. The agency currently has a backlog of over 8,000
generic drug applications and told us that to try to address
shortages, it expedited the review of hundreds of applications.
But FDA was unable to tell us whether any of the expedited
reviews were completed in time to help resolve a shortage.
Of particular importance, when FDA is informed of the
possibility of a shortage in advance, the agency has
increasingly been able to prevent potential drug shortages from
occurring. By taking the same kinds of actions the agency uses
to respond to a shortage, FDA has prevented shortages of the
majority of drugs where the agency learned of potential supply
disruptions in advance.
Beyond this, however, there are some things that the agency
has not been doing. FDA's ability to protect public health has
been limited by management challenges that weaken its ability
to respond to drug shortages. Most importantly, FDA has not
systematically maintained data on drug shortages. Without such
data, the agency has been unable to monitor trends and enhance
its ability to address the causes of drug shortages.
Many of these drugs have repeatedly been in short supply
over the last decade, but FDA has not been performing routine
analyses to understand patterns or examine root causes. Without
a systematic method to store, track, and share data on drug
shortages, the agency cannot ensure that it responds to
potential and current shortages in a timely and coordinated
manner.
In addition, FDA has consistently staffed its Drug Shortage
Program with a small number of employees. Even while the number
of drug shortages tripled, just three staff were handling this
work, and FDA only recently moved to add resources to this
program.
Finally, while the agency identified drug availability as a
strategic objective to protect public health, this objective
was focused solely on processes to bring new drugs to market.
The agency had no strategic focus on maintaining the supply of
drugs already on the market.
In closing, in our report we made several recommendations
to FDA to strengthen its ability to respond to drug shortages,
including assessing the resources allocated to the Drug
Shortage Program and developing an information system on
shortages. The agency has outlined actions it plans to take
that are consistent with our recommendations.
Our report also includes a matter for congressional
consideration. We believe that Congress should consider
establishing a requirement for manufacturers to report to FDA
any changes that could affect the supply of their drugs.
Mr. Chairman, this concludes my prepared remarks. I'd be
happy to answer any questions that you or other members of the
committee may have.
[The prepared statement of Ms. Crosse follows:]
Prepared Statement of Marcia G. Crosse, Ph.D.
summary
why gao did this study
In recent years, nationwide shortages of prescription drugs have
increased, preventing patients from accessing medications essential to
their care. The Food and Drug Administration (FDA), an agency within
the Department of Health and Human Services (HHS), established a Drug
Shortage Program with a mission of helping to prevent, alleviate, and
resolve shortages. FDA receives information about shortages from
manufacturers, though this reporting is generally voluntary, as well as
from the American Society of Health-System Pharmacists (ASHP). ASHP
tracks nationwide shortages for its members through a partnership with
the University of Utah Drug Information Service (UUDIS).
GAO was asked to review trends in shortages and examine FDA's
response. In this report, GAO:
(1) reviews trends in drug shortages,
(2) describes FDA's response, and
(3) evaluates FDA's ability to protect public health through its
response to drug shortages. GAO analyzed UUDIS data, interviewed
officials from FDA, health care professional associations, and
industry, and also examined relevant statutes, regulations,
information, and documents.
what gao recommends
Congress should consider establishing a requirement for
manufacturers to report to FDA any changes that could affect the supply
of their drugs. In addition, FDA should enhance its ability to respond
to drug shortages, for example, by developing an information system to
manage data about shortages. HHS outlined actions it plans to take that
are consistent with GAO's recommendations.
Drug Shortages--FDA's Ability to Respond Should Be Strengthened
what gao found
The number of drug shortages has grown substantially since 2006. In
total, 1,190 shortages were reported from January 1, 2001, through June
20, 2011, according to UUDIS data. From 2006 through 2010, the number
of drug shortages increased each year. A record number of shortages
were reported in 2010, and 2011 is on pace to surpass 2010's record. Of
the shortages, 64 percent involved drugs that were in short supply more
than once. On average, shortages lasted 286 days (over 9 months). Over
half of shortages reported from January 1, 2009, through June 20, 2011,
that UUDIS identified as critical--because, for example, alternative
drugs were not available--involved generic injectable drugs. Certain
therapeutic classes (such as anesthetic, oncology, and anti-infective
drugs) were among those most often in short supply.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
FDA responds to drug shortages by taking actions to address the
underlying causes and to enhance product availability, for example by
providing assistance to manufacturers to resolve manufacturing or
quality problems that can result in a shortage. When informed of the
possibility of a shortage in advance, FDA has increasingly been able to
prevent potential drug shortages from occurring. FDA prevented 50
potential shortages during the first half of 2011. As part of its
response, FDA provides general information about drug shortages to the
public via its Web site.
FDA is constrained in its ability to protect public health from
drug shortages due to its lack of authority to require manufacturers to
report actual or potential shortages to the agency or the public, or to
require manufacturers to take certain actions to prevent, alleviate, or
resolve shortages. As a result, the agency's approach to managing drug
shortages is predominately reactive. FDA's ability to protect public
health is also constrained by management challenges that weaken its
ability to respond to drug shortages. For example, FDA does not
systematically maintain data on drug shortages, without which it is
unable to monitor trends and enhance its ability to address the causes
of drug shortages. In addition, FDA has provided limited resources to
manage its response to drug shortages and lacks related performance
measures and priorities.
______
Mr. Chairman and members of the committee, I am pleased to be here
today to discuss the Food and Drug Administration's (FDA) response to
prescription drug shortages. According to FDA, a record number of drugs
were in short supply in 2010, and the number of drug shortages has
continued to grow throughout 2011. A variety of factors can trigger
drug shortages, such as disruptions in the supply of the active
pharmaceutical ingredients required to manufacture the drug,
manufacturing problems, manufacturers' business decisions, and
increased demand for products. Drug shortages directly threaten public
health by preventing patients from accessing medications that are
essential to their care. During shortages, physicians may have to
ration their supplies, delay treatments, or use alternative medications
that may be less effective for the condition, carry unwanted side
effects, or cost more. Consistent with its mission of protecting the
public health, FDA, an agency within the Department of Health and Human
Services (HHS), established a Drug Shortage Program to help prevent,
alleviate, and resolve shortages.
Drug shortages may be reported to FDA by manufacturers, health
professionals, or the public. FDA also obtains information from the
American Society of Health-System Pharmacists (ASHP), which tracks and
makes information publicly available about nationwide drug shortages
through a partnership with the University of Utah Drug Information
Service (UUDIS).\1\
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\1\ ASHP posts information about drug shortages on its Web site.
See http://www.ashp.org/menu/PracticePolicy/ResourceCenters/
DrugShortages.aspx.
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My statement will highlight key findings from our November 2011
report, which is being released today, that reviews trends in
prescription drug shortages and FDA's response.\2\ In that report, we
(1) reviewed trends in prescription drug shortages that occurred from
January 2001 through June 2011, (2) identified the reported causes of
selected drug shortages that occurred from January 2009 through June
2011, (3) described FDA's response to drug shortages, and (4) evaluated
the extent to which FDA is able to protect the public health through
its response to drug shortages.
---------------------------------------------------------------------------
\2\ See GAO, Drug Shortages: FDA's Ability to Respond Should be
Strengthened, GAO-12-116 (Washington, DC: Nov. 21, 2011).
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To identify trends in drug shortages, we analyzed UUDIS data on the
number and duration of prescription drug shortages reported to ASHP
from January 2001 through June 20, 2011. We examined these data because
FDA did not have a database containing information on drug shortages
for the time period we reviewed, and UUDIS is generally regarded as the
most comprehensive and reliable source of such information. Using these
data, we identified the number of drugs that had been in short supply
on multiple occasions and the collective duration of these shortages.
Using Red Book data, we examined the characteristics of 269 critical
drug shortages that were identified during a shorter time period,
January 1, 2009, through June 20, 2011.\3\
---------------------------------------------------------------------------
\3\ Red Book is a compendium published by Thomson Reuters that
includes information about the characteristics of drug products. UUDIS
recognized these shortages as critical because alternative medications
were unavailable, the shortages affected multiple manufacturers, or the
shortages were widely reported; because the shortages were determined
to be critical, they were posted to ASHP's Web site.
---------------------------------------------------------------------------
To identify the reported causes of selected drug shortages that
occurred from January 2009 through June 2011, we focused our analysis
on a nongeneralizable sample of 15 drug shortages that have had a
significant impact on public health. The drugs involved in these
shortages--all sterile injectables--are from three therapeutic classes:
anesthesia, oncology, and anti-infective drugs.\4\ We asked FDA
officials to provide information on the causes of these 15 drug
shortages, as reported to the agency by manufacturers. For additional
information on the causes of shortages, we obtained information from
four manufacturers of sterile injectable drugs--APP Pharmaceuticals,
Bedford Laboratories, Hospira, and Teva Pharmaceuticals. All of these
manufacturers produce drugs that recently were in short supply, and all
of the 15 drug shortages we selected for review involved drugs that
were manufactured by one or more of these manufacturers.
---------------------------------------------------------------------------
\4\ Specifically, we reviewed information about shortages for five
anesthesia drugs (epinephrine, neostigmine, propofol, thiopental, and
succinylcholine), five oncology drugs (cisplatin, cytarabine,
doxorubicin, etoposide, and vincristine) and five anti-infective drugs
(acyclovir, amikacin, cefotetan, clindamycin, and sulfamethoxazole-
trimethoprim). Most of these drugs have been available in generic form
for over 15 years.
---------------------------------------------------------------------------
To describe FDA's response to drug shortages, we interviewed FDA
officials and reviewed agency documents, including policies and
procedures. To describe how FDA responded to the 15 selected drug
shortages we reviewed in detail, we examined information the agency
provided about its response to these shortages. We also analyzed FDA
information on potential drug shortages the agency prevented from
January 2010 through June 2011.
To evaluate the extent to which FDA is able to protect public
health through its response to drug shortages, we analyzed FDA's
authority under the Federal Food, Drug, and Cosmetic Act, and reviewed
relevant FDA regulations, policies, procedures, and documents. In
addition, we evaluated FDA's approach to managing its response to drug
shortages using standards for internal control--including those for
information and communications, monitoring, and risk assessment.\5\ We
also interviewed a variety of stakeholders--including drug
manufacturers, health professional associations, and others involved in
drug production and the drug supply chain--to obtain information about
FDA's response to drug shortages. Our work was performed in accordance
with generally accepted government auditing standards.
---------------------------------------------------------------------------
\5\ See GAO, Standards for Internal Control in the Federal
Government, GAO/AIMD-00-21.3.1 (Washington, DC: November 1999).
---------------------------------------------------------------------------
In brief, we found that the number of drug shortages has grown
substantially in recent years, and FDA is constrained in its ability to
protect the public health from the impact of these shortages.
The number of drug shortages has grown substantially since 2006,
and many shortages involved generic injectable drugs. In total, 1,190
shortages were reported from January 1, 2001, through June 20, 2011,
according to UUDIS data. From 2006 through 2010, the number of drug
shortages increased each year and grew by more than 200 percent over
this period. A record number of shortages (196) were reported in 2010,
and 2011 is on pace to surpass 2010's record, with 146 shortages
reported through June 20, 2011. Over half (64 percent) of the 1,190
shortages represent 283 drugs that were in short supply more than once.
On average, these 283 drugs were each in short supply between 2 and 8
times during this period, with an average of 2.7 times per drug. While
the duration of all reported shortages varied considerably, most
shortages lasted 1 year or less. On average, shortages lasted 286 days
(over 9 months). Over half of shortages reported from January 1, 2009,
through June 20, 2011, that UUDIS identified as critical--because, for
example, alternative drugs were not available--involved generic
injectable drugs. Certain therapeutic classes (such as anesthetic,
oncology, and anti-infective drugs) were among those most often in
short supply.
The drug shortages we reviewed in detail were generally caused by
manufacturing problems and exacerbated by multiple difficulties. Of the
drug shortages we reviewed in detail, 12 of the 15 were primarily
caused by manufacturing problems, including those that resulted in
manufacturing shutdowns, according to information provided by FDA and
by manufacturers. For example, one manufacturer shut down a facility
that produces sterile injectable drugs in order to improve the
facility's manufacturing capabilities. While the manufacturer expected
that the upgrade would take 3 months, it instead took 1 year to
complete, and as a result, multiple drugs that were produced at this
facility went into short supply. The remaining 3 shortages we reviewed
were reportedly caused by disruptions in the supply of active
pharmaceutical ingredients. Officials from FDA and manufacturers
explained that sterile injectable drugs are complex to make, and as
such, can be prone to manufacturing and quality problems. In addition,
certain types of sterile injectable drugs, such as anti-infective and
oncology drugs, can be particularly challenging to manufacture. FDA
also pointed out that sterile injectable drugs are being made by a
decreasing number of aging facilities, which may contribute to the
recent increase in manufacturing problems. In addition to the initial
problems that caused the shortages, over half of the shortages we
reviewed (8 of 15) were subsequently exacerbated by multiple other
difficulties that arose after the shortages began. These eight
shortages were each affected by an average of four distinct
difficulties that occurred in addition to the primary cause of the
shortage and generally affected multiple manufacturers. During these
shortages, multiple manufacturers sometimes experienced the same
exacerbating issues once a shortage was already ongoing. For example, 9
of the 15 shortages we reviewed were extended as a result of
manufacturing problems that occurred in addition to the shortages'
primary causes. It is also important to recognize that some drugs may
only be produced by a few manufacturers. The drugs involved in the 15
shortages we reviewed were produced by an average of three
manufacturers at the time the drug went into short supply. According to
officials from FDA and industry officials, when only a few
manufacturers make a drug and one cannot maintain production, it can be
difficult for the other manufacturers to substantially increase
production to ensure that demand for a drug is met--even in the absence
of any other problems. Officials from one manufacturer described recent
shortage situations as a perfect storm of several manufacturers
coincidentally experiencing manufacturing problems all at the same
time.
FDA responds to known drug shortages by taking actions to
address their underlying causes and to enhance product availability.
FDA officials explained that they respond to all of the shortages of
which the agency becomes aware, and they determine how to address each
shortage based on its cause and the public health risk associated with
the shortage. For example, the agency may provide assistance to
manufacturers to resolve manufacturing or quality problems that can
result in a shortage. Our review of FDA's response to 15 shortages of
sterile injectable drugs showed that FDA typically used 2 or more types
of actions to respond to each shortage, and for 8 shortages, the agency
responded with 4 or more types of actions. FDA most frequently offered
assistance to manufacturers to prevent, alleviate, or resolve the
shortage, or notified other manufacturers to expect increased demand or
encouraged them to increase production. FDA has demonstrated that it
can prevent the majority of shortages from occurring when it learns of
potential supply disruptions in advance. FDA prevented 50 potential
shortages during the first half of 2011--about 1.5 times the number of
potential drug shortages (35) prevented during all of 2010. To prevent
these potential shortages, FDA took some of the same types of actions
it uses to alleviate and resolve shortages. As part of its response to
drug shortages, FDA communicates information about shortages to the
public via its Web site, which lists both current and resolved
shortages.\6\
---------------------------------------------------------------------------
\6\ See http://www.fda.gov/Drugs/DrugSafety/DrugShortages/
default.htm.
---------------------------------------------------------------------------
FDA is constrained in its ability to protect public
health from drug shortages. Specifically, FDA is constrained by its
lack of authority to require manufacturers to provide the agency and
the public with information about shortages, or require that
manufacturers take certain actions to prevent, alleviate, or resolve
shortages. FDA's sole authority related to manufacturers' reporting of
drug shortages pertains to the discontinuation of approved drugs that
are life-supporting, life-sustaining, or for use in the prevention of a
debilitating disease or condition, when such drugs are produced by only
one manufacturer.\7\ In such instances, companies are required to
provide FDA with at least 6 months notice of discontinuations. However,
such discontinuations have not been the primary cause of most recent
drug shortages. As a result of these constraints, the agency's approach
to managing drug shortages is predominately reactive. While FDA has
encouraged manufacturers to report supply disruptions to the agency,
according to agency officials, less than half of all shortages are
reported to the agency by manufacturers. Instead, FDA is most often
notified by ASHP, health care providers, or consumers when they are
unable to purchase a drug--a point at which the shortage is already
affecting public health. FDA's ability to protect public health is also
constrained by management challenges that weaken its ability to respond
to drug shortages. Specifically, FDA does not maintain data on drug
shortages, such as their causes and the agency's response. Without such
data, FDA is unable to systematically monitor trends and enhance its
ability to address the causes of drug shortages. In addition, despite
the increase in the number of drug shortages reported in recent years,
FDA has not identified drug shortages as an area of strategic
importance for the agency. It has consistently staffed its Drug
Shortage Program with a small number of employees. While FDA has
recognized the significant public health consequences that can result
from drug shortages, the agency has not developed a set of results-
oriented performance metrics related to drug shortages, and has not
identified drug shortages as an area of strategic importance for the
agency. Without such management tools, FDA may be unable to effectively
evaluate its work and improve its ability to protect the public health.
---------------------------------------------------------------------------
\7\ See 21 U.S.C. 356c; 21 CFR 314.81(b)(3)(iii) (2011). FDA
does not have the authority to enforce this requirement, for example,
by seeking civil monetary penalties. To the maximum extent possible,
FDA is to distribute information on the discontinuance of these
products to appropriate physician and patient organizations.
In conclusion, the number of drug shortages has substantially
increased in recent years--including those for life-saving medications
such as oncology drugs--a situation that has jeopardized the public
health. While FDA may not always be able to prevent shortages from
occurring, the agency's response to drug shortages is constrained by
its lack of authority to require manufacturers to report potential or
current shortages to the agency. FDA has demonstrated that when it
learns of shortages in advance, it can prevent the majority of such
shortages from occurring.
However, it does not currently have the authority to require
manufacturers to provide it with information about potential or current
shortages, and therefore it can only prevent the shortages that it
becomes aware of through voluntary reporting. FDA's ability to protect
the public health is also constrained by its own management challenges.
The agency has not elevated the priority it places on its response to
drug shortages, despite the rapid escalation of these shortages. Not
only have its resources not kept pace with this escalation, the agency
has not developed the metrics to manage this growing public health
problem. Without data and results-oriented performance measures, FDA
cannot systematically monitor drug shortages and their causes, nor can
it adequately track or assess its own success in preventing or
mitigating shortages. Although FDA recognizes the serious threat these
shortages pose, we believe the agency can and must do more to protect
the public health.
Our report includes a matter for congressional consideration that
would establish a requirement for manufacturers to report to FDA any
changes that could affect the supply of their drugs. In addition, our
report recommends that FDA take steps to strengthen its ability to
respond to drug shortages by: (1) assessing the resources allocated to
the Drug Shortage Program; (2) developing an information system to
enable the Drug Shortage Program to manage its daily workload in a
systematic manner, track data about drug shortages--including their
causes and FDA's response--and share information across FDA offices
regarding drugs that are in short supply; (3) ensuring that FDA's
strategic plan articulates goals and priorities for maintaining the
availability of all medically necessary drugs; and (4) developing
results-oriented performance metrics to assess and quantify the
implementation of the agency's goals and FDA's response to drug
shortages.
In commenting on a draft of the report upon which this testimony is
based, HHS stated that it supports legislation that would require
manufacturers to report potential or actual supply disruptions to FDA.
In addition, HHS outlined actions it plans to take that are consistent
with our recommendations.
Mr. Chairman, this concludes my statement. I would be pleased to
respond to any questions you or other members of the committee may
have.
The Chairman. Thank you, Dr. Crosse.
Mr. Aitken, please proceed.
STATEMENT OF MURRAY AITKEN, SENIOR VICE PRESIDENT, HEALTHCARE
INSIGHT, IMS, PARSIPPANY, NJ
Mr. Aitken. Mr. Chairman, members of the committee, thank
you for this opportunity to appear before you today on this
important topic. Disruptions in clinical care caused by drug
shortages are of growing concern among patients, clinicians,
suppliers and manufacturers, as well as policymakers. We
applaud the efforts to date of the FDA, ASPE, and ASHP, and
this committee in working to understand the problem.
We believe it's critical to bring the best available
information to the discussion of the underlying causes and
potential mechanisms to prevent shortages or alleviate their
effects. That's why the IMS Institute for Healthcare
Informatics has undertaken an independent study without
industry or government sponsorship, using our proprietary data
to look at the actual supply of those drugs on the shortage
lists maintained by the FDA and the American Society of Health
System Pharmacists.
Among the findings from our analysis and included in our
report are three important points. First, the drug shortage
problem is highly concentrated in a relatively small number of
products that are mostly generic and mostly injectables. We see
that of the 168 products in our dataset, 83 percent are
generics, 82 percent are injectables, and they are almost
entirely used in hospital or clinic settings for inpatient or
outpatient care.
While the problem may be concentrated in terms of the type
of products, this is not to say the problem, of course, is
small. In fact, the 168 products cover every one of the major
anatomical therapy classes used to categorize therapeutic
pharmaceuticals, from analgesics to injectable vitamins. And in
the case of 20 injectable oncology products that are on the
shortages list, these are drugs that over the course of a 12-
month period were used to treat 550,000 cancer patients. So any
disruption in the supply of those drugs will potentially affect
a large number of patients.
We think, though, that the concentration of the problem is
an important point when considering solutions. To the extent
that solutions can be focused on the segment of pharmaceuticals
and the part of the supply chain where disruptions are
occurring, we would expect a more successful outcome and fewer
unintended consequences for the rest of the health care system.
The second finding from our report is that the term
``shortage'' can have different meanings. For over half of the
products on the shortages list, our measure of the total
monthly volume being shipped to end user settings, whether it
be a hospital, a clinic, a retail pharmacy warehouse, or a mail
order facility, that volume has, in fact, been steady or even
increasing over the past 5 years, and this suggests that at a
national level there may not be an imbalance between total
demand and total supply. Instead, the shortage is being
experienced by a particular pharmacy or in a particular region
of the country or with a particular wholesaler or intermediary.
Alternatively, the shortage can be for one specific
manufacturer of a product even if there is adequate supply from
other manufacturers.
For the other 45 percent of the products, though, we do see
at a national level evidence of significant reductions, on
average 26 percent, in the monthly volume being supplied to
hospitals and clinics, and even more volatility in monthly
volume being supplied by individual companies. This can only
mean severe disruption across the supply chain even if it is
for a relatively small number of products.
The third finding relates to the suppliers of these
products. We see that over half of the products have only one
or two suppliers, and this means that in the event that one
company has a temporary disruption of manufacturing capacity,
for whatever reasons, it may be very difficult for another
company to replace that volume quickly and, hence, leading to a
shortage.
Our perspective on recommendations is grounded on what we
know about the information and analytical approaches that can
be applied to this situation. We believe a multistakeholder
early warning system can be a critical tool to help the FDA,
pharmacists, manufacturers and intermediaries predict, monitor,
and mitigate the impact of supply disruptions. Such a system
should include a systematic approach to risk identification, a
continuous forecast for long-term demand for the high-risk
sectors of the market, a volatility index focused on weekly or
monthly changes in the supply volume, and that can be a
sentinel of instability in the supply chain, and predictive
modeling that helps keep a tight focus on interventions only on
those specific parts of the market and supply chain that need
attention.
We are grateful for the opportunity to present our
perspective and we look forward to today's discussion on
solutions that are balanced, coordinated, and sustainable.
Thank you.
[The prepared statement of Mr. Aitken follows:]
Prepared Statement of Murray Aitken
Chairman Harkin, Senator Enzi, and members of the committee, thank
you for the opportunity to contribute to the discussion of this
important topic. Drug shortages have become of increasing concern for
patients, clinicians, manufacturers and policymakers. While the issue
is not entirely new, the increased number of drugs reported as being in
short supply has precipitated a deeper understanding of the underlying
causes of the problem, and potential remedies to prevent future
shortages or alleviate their impact on patient care.
I am the Executive Director of the IMS Institute for Healthcare
Informatics, which is focused on bringing objective, relevant insights
and research that will accelerate the understanding and innovation
critical to sound decisionmaking and improved patient care. We have
recently undertaken a study based on analysis of IMS Health data and
publicly available drug shortage lists in order to bring new evidence
on the products and suppliers involved, and the volume volatility
occurring in the marketplace. This work has been undertaken as a public
service, without industry or government sponsorship.
methodology of ims analysis
The basis of our analysis is a dataset developed by the IMS
Institute and based on products listed on the Current Drug Shortages
Sections of Web sites maintained by the U.S. Food and Drug
Administration and the American Society of Health-
System Pharmacists. Information related to products and molecules was
accessed on October 7, 2011, resulting in an initial list of 197 unique
products. Of these products, 11 are considered to be widely available,
and a further 18 are products unable to be uniquely identified in the
IMS databases, leaving 168 products in the final dataset.
For the 168 products, we accessed monthly volume and sales data for
the 5-year period beginning September 2006 and ending August 2011 from
IMS National Sales Perspectives. This measures volume in Standard Units
and sales within the U.S. pharmaceutical market by pharmacies, clinics,
hospitals and other healthcare providers. Sales amounts are based on
pricing information derived from wholesaler invoices to end-users and
does not include rebates and discounts commonly negotiated between end-
users and manufacturers, including Medicaid rebates and 340B discounts.
Additional information related to distribution channel, therapy
class using the Anatomical Therapeutic Chemical (ATC) Classification
System, and characterization of the product as a brand, generic or
branded generic was also included and derived from IMS National Sales
Perspectives.
For oncology products, patient counts by tumor site and regimen
were sourced from IntrinsiQ, a unit of AmerisourceBergen Specialty
Group, via IMS Oncology Analyzer, for the period of June 2006-June
2011.
Regional volume usage was derived from IMS Drug Distribution Data
(DDD) for the period of September 2007 to August 2011.
key findings
The key findings of our analysis relate to the characterization of
the products on the shortages list; the suppliers of these products;
and the volatility in supply volume for individual products.
Characterization of the Products on the Shortages List
Most of the 168 products included in the IMS dataset are
injectables (82 percent) and generics (83 percent) (Exhibit 1). This
points to the concentration of products to a segment of the market and
suggests the underlying causes and solutions to drug shortages should
be focused on this part of the overall pharmaceutical sector.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
We also found that most of the products on the shortages list are
used in hospital or clinic settings. For the injectables, 72 percent of
the standard unit volume is supplied to non-federal hospitals, 16
percent to clinics, 3 percent to Federal facilities, and the remaining
9 percent goes to retail or other channels. For the oral products, the
distribution is more directed toward retail channels, accounting for 79
percent of the volume, and only 5 percent going to hospitals and 4
percent to clinics.
Although drug shortages are concentrated in terms of the nature of
the products, they are extensive in terms of the therapy areas they are
used in. In fact, the 168 products cover all of the major anatomical
therapy classes used to categorize therapeutic pharmaceuticals. The
largest share of products are used in oncology, representing 16 percent
of the products; a further 15 percent are anti-infective products; 12
percent are used to treat cardiovascular disease; 11 percent for
central nervous system conditions; 9 percent for pain; a further 9
percent are vitamins and minerals (mostly in injectable form); and the
remaining 28 percent cover a broad range of other therapy areas
including asthma/chronic obstructive pulmonary disease and
immunosuppressants (Exhibit 2).
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
The number of patients potentially affected by drug shortages is
also extensive. In the case of the 20 injectable oncology drugs on the
shortages list, we estimate that 550,000 cancer patients were treated
with at least one of those drugs during the past year. This therefore
can represent the number of patients whose treatment could be affected
by any disruption in the supply of these drugs.
Characterization of Suppliers
We analyzed the firms supplying the 168 products on our shortages
list over the past 5 years. In total, 100 companies supplied one or
more of the products on the current shortages list over the past 5
years. More recently, 98 separate companies controlled by 88
corporations were supplying these products during the 3 months ending
August 2011. The largest generic manufacturers have multiple products
(Exhibit 3).
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Over time, we see a number of companies, generally supplying
relatively few products, entering and leaving the marketplace. Over the
past 5 years the number of corporations supplying the 168 products has
fluctuated, including 13 corporations that have stopped supplying any
products on the shortages list during the past 2 years. This movement
among suppliers is one of the underlying causes of the disruption felt
by pharmacists when they are no longer able to source their supplies
from established manufacturers.
Among the 168 products on the shortages list, we identified 86
products, or 51 percent of the total, that currently have two or fewer
suppliers. Of those 86 products, 56 had only one supplier, and 7 had no
suppliers during the 3 months ending August 2011 (Exhibit 4).
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
While patent protected products have single suppliers and generally
do not face supply shortages, in the generics market the relatively
high number of products with very few suppliers may be a contributing
factor to supply disruption. In the event that one company has a
temporary disruption of manufacturing capacity, it may be difficult for
another company to replace that volume quickly and hence lead to a
shortage.
Volatility in Supply Volume
The average monthly supply from wholesalers to end-user settings
for the total set of 168 products has, in aggregate, increased slightly
over the past 5 years. For the injectable products, the average number
of standard units supplied monthly increased from 54 million in 2006 to
56 million in 2011. For the smaller number of oral products, volume
increased from 125 million to 157 million during the same reference
period (Exhibit 5).
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
A closer examination reveals that three distinct segments exist
among the drugs on the current shortages list:
(a) a ``declining'' set of 75 products that have recent monthly
supply volume of less than 80 percent of a base period defined as
September 2006-August 2009;
(b) a ``stable'' set of 56 products whose recent monthly supply is
between 80 percent and 120 percent of the base period; and
(c) a ``growing'' set of 31 products where monthly supply is at
least 20 percent more than the base period.
(An additional 6 products were introduced during the 5-year period
and not included in the above segmentation.)
In aggregate the declining segment of 75 products have seen monthly
supply fall about 47 percent over the 5-year period. For the injectable
products, average monthly volume has fallen from 16 million to 8
million standard units for month (Exhibit 6). Included in this segment
are 12 oncology drugs, 11 anti-infectives, and 12 cardiovascular drugs,
among others.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
For the remaining 55 percent of products in the stable or growing
segments, the total volume has not declined, but there may be
volatility among the suppliers of the individual products. For example,
cisplatin--a widely used platinum-based alkylating agent used in
treating about 85,000 patients for a variety of cancer treatments in
the past year--has had some volatility in total monthly supply volume,
but overall shows a growing volume trend over time. However, a
significant level of volatility in supply at the individual company
level is evident, including the discontinuation of production in mid-
2010 by one company that had been the leading supplier of cisplatin in
the 2007-8 period (Exhibit 7). This level of volatility reflects
disruption throughout the supply chain which ultimately affects
providers and patients.
Exhibit 7
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Across the 50 States we see varying levels of volatility in the
supply of products on the shortage list. For example, for the 64
injectable products included in the declining segment, the average
decline in monthly per capita use between the 12 months ending August
2010 and the 3 months ending August 2011 was 26 percent. Between the
two time periods, 13 States had declines in excess of 30 percent
suggesting a significant disruption to patient care in a short time
period (Exhibit 8).
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Recommendations
Our analysis provides new insights--based on granular information--
about the characterization of the products on current drug shortages
lists, the suppliers of those products and a deeper, industry-wide
understanding of the volume dynamics and volatility for individual
molecules and suppliers of those molecules. Our perspective on
recommendations is focused on how existing information and analytical
approaches can be applied to preventing or alleviating the affects of
shortages going forward. Specifically, we believe that an Early Warning
System for drug shortages created by the FDA or the industry can be a
critical tool to help the regulator, pharmacists and other stakeholders
predict, monitor or mitigate the impact of supply disruptions on the
healthcare system.
Specifically, the Early Warning system should include the following
elements:
1. Risk Identification: Systematically identify the high-risk
sectors of the generics market. Identify all the low-cost, technically
challenging and critical medicines--whether or not they are currently
on shortage lists.
2. Demand Forecasting: Continuously forecast the long-term demand
for low-cost, technically challenging and critical medicines. Adjust
forecasts based on such factors as demand trends, new medications,
changes in clinical guidelines, practice patterns, care delivery
changes and needs of clinical trials.
3. Volatility Index: A quantitative measure to systematically track
and report month-to-month changes in the volume of drugs supplied to
hospitals, clinics and retail pharmacies. Volatility in supply--whether
national, regional, by individual supplier, or for specific drug
molecules--is a sentinel of problems in meeting demand and instability
or dramatic change in the supply chain. Volatility itself can seriously
exacerbate problems in meeting demand, encourage overstocking, disrupt
patient therapies and facilitate short-term price manipulation by a few
suppliers.
4. Predictive Modeling: With the wealth of data available,
predictive modeling techniques could be applied to anticipate shortages
or supply disruptions for critically important medications at the
national and regional levels. As data accumulate and measures are
improved, the model can tightly focus interventions on those specific
parts of the market and supply chain genuinely needing attention.
Other tools would augment the Early Warning System, including self-
reporting of demand and supply disruptions by pharmacies, wholesalers,
group purchasing organizations and drug manufacturers.
Other tools and mechanisms are needed to augment the Early Warning
System, including self-reporting of demand and supply disruptions by
pharmacies, wholesalers, group purchasing organizations and drug
manufacturers.
We are grateful for the opportunity to present our perspective to
this committee and look forward to discussion of the potential
solutions.
The Chairman. Thank you, Mr. Aitken.
Mr. Neas, welcome back to the committee.
STATEMENT OF RALPH G. NEAS, J.D., CHIEF EXECUTIVE OFFICER,
GENERIC PHARMACEUTICAL ASSOCIATION, WASHINGTON, DC
Mr. Neas. Thank you, Mr. Chairman, and thanks, every member
of the committee. We are very grateful for your focus on the
issue of drug shortages. I am Ralph G. Neas, and I'm president
and CEO of the Generic Pharmaceutical Association. GPhA
represents the manufacturers and distributors of finished-dose
generic pharmaceuticals, bulk pharmaceutical chemicals, and
suppliers to the generic industry. At its core, GPhA's purpose
is to improve the lives of consumers by providing timely access
to affordable pharmaceuticals.
The shortage of critical drugs is a complex, multifactor
problem involving many stakeholders. However, much of the
shortage problem could be solved by improving the information
available both from and to the various stakeholders. These
stakeholders would include drug manufacturers, wholesalers,
distributors, group purchasing organizations, the FDA, the DEA,
and possibly others.
Today, we propose the creation of an accelerated recovery
initiative, or ARI. ARI would utilize an independent third
party, or ITP, as an unprecedented information clearinghouse to
collect information regarding the aggregated available supply
of critical drugs, in essence establishing a consolidated
supply schedule, and then to use this information to identify
potential gaps in supply compared to market requirements.
Upon the acceptance of ARI by both the FTC and HHS, the
initiative's mission would be to increase early visibility and
communication between the FDA and industry relating to both
current and potential drug shortages. Of course, the ITP would
be gathering and disseminating information in compliance with
all current market regulations and only under terms of strict
confidentiality. Efforts would be focused exclusively on
critical products where a shortage is expected to last longer
than 90 days, and the initiative would operate in a way that
would neither restrict competition nor cost taxpayers money.
There can be no question that generic manufacturers are in
the business of supplying medicine and ensuring that consumers
and patients have access to the drugs they need. Contrary to
some media reports, shortages are typically not caused by a
manufacturer's decision to voluntarily discontinue supplying
the product. Indeed, manufacturers do not and would never
deliberately reduce the supply of essential medicines to push
prices up.
However, without sufficient information, our efforts
sometimes can be misplaced. As one manufacturer put it, we try,
but without knowing more, we occasionally end up over-solving
one shortage while under-solving another. The FDA, working with
industry through ARI, can help prevent this from happening.
Indeed, ARI will allow the FDA and the industry to ensure that
limited resources are aimed at the highest priority needs.
This is how the initiative would work. A list of critical
products will be determined, incorporating data from multiple
sources. With respect to these products, industry will share
information with the ITP regarding both available and future
supply. The ITP will aggregate this data and communicate where
gaps in critical products are found. Based on this information,
individual manufacturers will indicate to the ITP how they each
could address the shortage.
This feedback loop would continue to help focus industry
efforts for the most critical products on the list. As a
result, manufacturers will be able to focus their production
with a clear understanding of which shortages are being
addressed and which are not. ARI will provide greater clarity
to available supply of the list of drugs, as well as projected
timelines for recovery.
In addition to the initiative I've just outlined, GPhA
believes that a recovery from this crisis could be further
accelerated through creating a high-level team at the FDA. This
team would enable decisionmakers from across the agency and
manufacturers to devise strategies to address or avert critical
shortages. We've come to think of this, and have shared with
the FDA and with HHS, as an FDA SWAT team which could work with
industry to make sure listed products are making it to the
market.
To be clear, this is not a criticism of the FDA. To the
contrary, GPhA applauds the FDA's efforts to ensure that the
U.S. drug supply remains the safest in the world. This
recommendation is based on the recognition that regulatory
efforts sometimes can have the unintended consequence of
disrupting the supply of critical products. In fact, as we
examine the current crisis, more than half of the shortages
have stemmed from regulatory concerns. However, simply by using
this SWAT team approach, we believe that the FDA could greatly
minimize these unintended consequences without compromising
safety in any way.
GPhA is committed to working with this committee, the FDA,
the DEA, and all stakeholders to minimize current drug
shortages and prevent future shortages from occurring. Nothing
is more important to our industry than providing patients
access to their life-saving generic medications. With an
intense and timely multistakeholder collaboration, we believe
we can accomplish this goal.
Thank you, Mr. Chair.
[The prepared statement of Mr. Neas follows:]
Prepared Statement of Ralph G. Neas, J.D.
summary
I am Ralph G. Neas, President and CEO of the Generic Pharmaceutical
Association, which represents the manufacturers and distributors of
finished dose generic pharmaceuticals, manufacturers and distributors
of bulk pharmaceutical chemicals and suppliers of other goods and
services to the generic industry.
Before examining how best to respond to drug shortages it is
important to understand that this is a complex, multi-faceted issue and
the generic industry has, and will continue, to work tirelessly to be
part of the solution. Causal factors of drug shortages are numerous and
do not apply in every case. They include everything from challenges in
manufacturing and an insufficient supply of available raw materials to
meet demand, to inadequate and delayed communications about shortages--
both within the supply chain and also within and among the Food and
Drug Administration's (FDA) enforcement and drug shortages personnel.
A group of generic manufacturers, including both GPhA and non-GPhA
members, that represent approximately 80 percent of the generic sterile
injectable products sold in the United States, are proposing to take
unprecedented steps to build tools and practices that are specifically
designed to accelerate the recovery of critical drugs in short supply.
Under this recommended proposal, known as the Accelerated Recovery
Initiative (ARI):
An independent third party will gather current and future
supply information from stakeholders for products identified as meeting
the critical criteria;
This will then be used to determine current and potential
supply gaps, with a focus on those products where a shortage is
expected to last longer than 90 days;
FDA Drug Shortage staff will be updated when assistance is
needed to facilitate production of a product in shortage; and
A high-level team will be formed within FDA with the
ability to quickly respond to critical shortages.
ARI is predicated on voluntary communication between an independent
third party and stakeholders involved in the manufacturing and
distribution of generic injectable drugs in shortage, including, but
not limited to: manufacturers, wholesalers, distributors, Group
Purchasing Organizations (GPO's) and the FDA. In addition, this multi-
stakeholder approach will provide additional information focusing on
real-time decisions and actions proposed by regulatory agencies and
their potential impact on critical supply.
This initiative will maintain robust competition, and will not in
any way deal with pricing information. It will also require prior
acceptance by the Federal Trade Commission and the Department of Health
and Human Services. The type of information gathered and disseminated
will increase early visibility and communication between the FDA and
industry relating to current and potential drug shortages.
ARI also focuses on FDA. The agency deserves tremendous credit for
the work it is currently doing to expedite regulatory reviews and work
closely with manufacturers. However, there is still more that must be
done, and manufacturers would be aided by a formal process specifically
designed to facilitate communications related to drug shortage
regulatory issues. The industry strongly encourages the establishment
of a high-level FDA drug shortage management team, which would include
representation from key agency offices. This team would provide an
avenue for timely access to FDA decisionmakers by the pharmaceutical
industry to review strategies for addressing or averting drug
shortages. This high-level FDA team would also be empowered to evaluate
issues such as expediting reviews of pending supplements, which enable
industry to address shortages of critical drug products.
GPhA is committed to working with the FDA and all stakeholders to
minimize current drug shortages and prevent future shortages from
occurring. Nothing is more important to our industry than ensuring
patients have access to their lifesaving generic medications, and with
a joint effort among all involved we believe we can make a significant
step toward accomplishing this goal.
______
Good morning Chairman Harkin, Ranking Member Enzi and Members of
the Senate Committee on Health, Education, Labor, and Pensions. Thank
you for asking me to participate in this very timely and important
hearing.
I am Ralph G. Neas, President and CEO of the Generic Pharmaceutical
Association. GPhA represents the manufacturers and distributors of
finished dose generic pharmaceuticals, manufacturers and distributors
of bulk pharmaceutical chemicals and suppliers of other goods and
services to the generic industry. Generic pharmaceuticals now fill 78
percent of all prescriptions dispensed in the United States, but
consume just 25 percent of the total drug spending.
According to an analysis by IMS Health, the world's leading data
source for pharmaceutical sales, the use of FDA-approved generic drugs
in place of their brand counterparts has saved U.S. consumers, patients
and the health care system more than $931 billion over the past
decade--$158 billion in 2010 alone--which equates to $3 billion in
savings every week.
GPhA is the third major coalition that I have had the privilege of
leading. For 15 years, I served as the executive director of the
Leadership Conference on Civil and Human Rights, a 60-year-old
coalition of nearly 200 organizations that is the legislative arm of
the civil rights movement.
For the past several years, I was the President and CEO of the
National Coalition on Health Care, the Nation's oldest and most diverse
health care reform coalition. The 80 organizations that make up NCHC
represent consumers, health care providers, large and small businesses,
unions, older Americans, medical societies, minorities, pension funds,
religious denominations and people with disabilities.
Personally, I am strongly committed to the perspective of patients.
I came down with Guillain-Barre Syndrome (GBS) 32 years ago, an often
serious neurologic disorder, usually reversible, that kept me in the
hospital for 155 days. More than half of those days were spent in the
intensive care unit unable to speak, on a respirator, and totally
paralyzed. That harrowing experience led me to help found the GBS
Syndrome Foundation International, which now represents 35,000 former
GBS patients. In October, we celebrated our 30th Anniversary. With
these experiences in mind, I am proud to be here today representing
GPhA and I am equally proud of the work our member companies are doing
to resolve drug shortages.
introduction
I would like to begin today by commending the committee for your
focus on this important issue. As members of the public who also are
affected by shortages, the generic pharmaceutical industry is devoted
to working with all stakeholders to minimize current shortages and
mitigate factors that could contribute to future shortages. We are
acutely aware of the distress caused to patients, families and
clinicians by the shortage of critical drugs. Drug shortages represent
a complex, multi-faceted issue and our industry has, and will continue,
to work tirelessly to be part of the solution.
why are shortages occurring?
Before examining how best to respond to drug shortages it is
important to understand why they are occurring. Contrary to some media
reports, drug shortages are typically not caused by a manufacturer's
decision to voluntarily discontinue supplying the product, and
manufacturers do not--and would never--deliberately reduce the supply
of essential medicines to push prices up. There can be no question that
generic manufacturers are in the business of supplying medicine and
assuring that consumers and patients have access to the drugs they
need.
Causal factors of drug shortages, rather, are numerous and do not
apply in every case. They include everything from an insufficient
supply of available raw materials to meet demand, to inadequate and
delayed communications about shortages--both within the supply chain
and also within and among the Food and Drug Administration's (FDA)
enforcement and drug shortages personnel.
GPhA also acknowledges that while factors contributing to drug
shortages are many and complex, roughly half of the reported shortages
have been attributed to problems associated with the manufacturing and
release of generic sterile injectable products. The manufacturing
community has been responsive to this issue and has been extremely
active in working with all stakeholders, and especially the FDA, to
find suitable solutions that accelerate the availability of critical
drugs in short supply. GPhA and our member companies have spent months
working with both policymakers and manufacturers to develop strategies
to alleviate shortages and better collaborate with other stakeholders.
I have also paid close attention to recent congressional hearings
examining the economics of drug shortages and potential economic
incentives. I am pleased to see that new and innovative ideas to
address the problem of drug shortages continue to be discussed by the
Congress. After speaking to GPhA's membership, our member companies
have indicated that improved communication, an expedited process for
qualifying alternative suppliers and increased collaboration among
stakeholders would address the causes of the vast majority of
shortages.
insufficient communication
As the regulatory authority charged with maintaining oversight of
the U.S. drug supply, the FDA has stepped up its enforcement efforts to
unprecedented levels in recent years. Due to the efforts of the FDA,
the U.S. drug supply remains the safest in the world. GPhA applauds
these efforts and is committed to working with the agency to ensure
that patients continue to receive safe and effective generic
medications. With the implementation of these expanded enforcement
measures, however, comes a need for industry and the FDA to communicate
effectively at all stages of the process. Otherwise, these efforts may
have the unintended consequence of adversely affecting our country's
supply of critical drugs. Indeed, more than half of the current drug
shortages have stemmed from regulatory concerns.
One way to avoid such unintended consequences is by implementing
processes whereby remedial measures could be implemented without
completely disrupting the manufacturing of necessary products. Through
additional remedial measures, the FDA could maintain its vigilance over
the safety of the U.S. drug supply, while still ensuring that patients
are receiving the medication they need. It is critical that the FDA and
industry increase early communication relating to all proposed or
contemplated regulatory actions that would affect our country's supply
of critical drugs.
qualifying alternative suppliers
Another important factor to note is that the pharmaceutical
marketplace overseen by the FDA today is one that has become
increasingly global. Nearly 40 percent of all prescription drugs
dispensed in the United States are now manufactured outside of the
country, and nearly 80 percent of the ingredients in our drugs are
manufactured abroad. According to FDA estimates, the number of drug
products made outside of the United States doubled from 2001 to 2008.
Manufacturers face significant delays in the process to qualify
alternate Active Pharmaceutical Ingredient (API) suppliers and
secondary or redundant manufacturing facilities. As a result, many
drugs only have one API supplier approved in their applications and are
qualified in just one facility. This is in contrast to many other
regions of the world, where supplemental API suppliers can be approved
in as little as 30 days. Similarly, a prior approval supplement can
take multiple years in the United States while similar changes are
accomplished in Europe and elsewhere within a much shorter timeframe.
The FDA should bring its oversight in this area up to date with
today's global pharmaceutical marketplace. A more streamlined and
timely process for qualifying new or alternate raw material suppliers
and alternate manufacturing facilities would allow manufacturers to
increase production of medicines in short supply sooner.
collaboration among stakeholders is needed
We believe these changes would provide a strong start toward
reversing the drug shortages currently afflicting patients and
preventing further ones from occurring. But as an industry whose entire
business model is to make quality medicines available and affordable to
all, we are acutely aware that a lack of supply of a critical drug can
be devastating, even if it impacts only one patient. Despite all of the
factors currently contributing to shortages, there are still numerous
opportunities for generic manufacturers, and all stakeholders, to work
together in an effort to solve the problem.
With this in mind, the generic pharmaceutical industry has
spearheaded the development of an unprecedented multi-stakeholder
communication tool, which we believe will accelerate the recovery of
critical drugs in short supply to patients in need. This database of
information, which we have labeled the Accelerated Recovery Initiative,
or ARI, can be utilized by all stakeholders involved in the
manufacturing and distribution of vulnerable drugs in shortage--
including, but not limited to manufacturers, wholesalers, distributors,
Group Purchasing Organizations (GPO's) and the FDA--in order to
accelerate the recovery of critical drugs in short supply to patients
in need. In addition, this multi-stakeholder approach will provide
additional information to focus on decisions and actions proposed by
regulatory agencies and their potential impact on critical supply. Let
me provide some more details.
accelerated recovery initiative (ari)
A group of generic manufacturers, including both members of GPhA
and non-members, representing approximately 80 percent of the generic
sterile injectable products sold in the United States today, are
proposing to take unprecedented steps to establish tools and practices
that are specifically designed to accelerate the recovery of critical
drugs in short supply. The goal of ARI is to put in place industry
practices that provide a more accurate, timely and comprehensive view
of the current drug shortage situation, provide greater visibility to
shortages and establish practices that allow for potential, voluntary
production adjustments to lessen or eliminate the impact of a current
shortage. Given the nearly 200 products currently identified by the FDA
Drug Shortage staff, the initial scope of the initiative will focus
only on those products deemed most critical, which currently focuses
exclusively on sterile generic injectable products. We will continue to
fine tune the inclusion criteria with a focus on products that have few
manufacturing options and no therapeutic alternative.
As I noted, this initiative is predicated on voluntary
communication between an independent third party and stakeholders
involved in the manufacturing and distribution of generic injectable
drugs in shortage, including, but not limited to: manufacturers,
wholesalers, distributors, Group Purchasing Organizations (GPO's) and
the FDA. In addition, this multi-stakeholder approach will provide
additional information focusing on real time decisions and actions
proposed by regulatory agencies and their potential impact on critical
supply.
In order for this type of initiative to work, each stakeholder
involved in the manufacture, supply and distribution of critical drugs
in shortage that is willing to participate will communicate necessary
information to the FDA Drug Shortage staff. Safeguards will be put in
place to ensure that market and manufacturing information is treated
with appropriate care.
Further, this initiative will not limit or restrict competition,
and will not in any way deal with pricing information. It will also
require prior acceptance by the Federal Trade Commission and the
Department of Health and Human Services.
The primary focus of the ARI is to gather the current and future
supply information from stakeholders for those products identified as
meeting the critical criteria. This will then be used to determine
current and potential supply gaps, with a focus on those products where
a shortage is expected to last longer than 90 days. This type of
information will increase early visibility and communication between
the FDA and industry relating to current and potential drug shortages.
The supply information will be gathered and disseminated by an
impartial third party in compliance with all current market regulations
and under terms of strict confidentiality. This independent third party
will be supplied with data related to drugs currently in shortage or
expected to go into shortage, including the name of the drug, the
expected duration of the shortage and internal reviews to identify
production capabilities to respond to any market shortage. Wholesalers
and distributors will also supply product availability data to assure a
complete review of all available inventories. The independent third
party will then aggregate the data to provide an overall view of the
projected available supply by product, as defined by critical product
criteria, compared to the total market need. If the data reveals gaps
in market supply that require FDA intervention, the information will be
provided by the independent third party to the FDA Drug Shortage staff
so that they may help to develop solutions with the manufacturers.
In addition, wholesalers, distributors, distribution partners and
GPO's also have an important role to play. It is necessary for both
wholesalers and GPO's to establish a ``critical drug supply program''
that will be implemented during the time when a drug in shortage is in
a supply recovery period. A supply recovery period is the time in which
a product is in shortage and has not returned to market demand levels.
The focus of the program will be to assure that timely and accurate
information is readily available to all affiliated members,
institutions and customers.
The last step of ARI focuses on FDA. The agency deserves tremendous
credit for the work it is currently doing to expedite regulatory
reviews and work closely with manufacturers. However, there is still
more that must be done, and manufacturers would be aided by a formal
process specifically designed to facilitate communications related to
drug shortage regulatory issues. The formation of a FDA drug shortage
management team could more effectively address current drug shortages
and minimize future shortage events. The industry strongly encourages
the establishment of a high-level FDA drug shortage management team,
which would include representation from key agency offices. This team
would provide an avenue for timely access to FDA decisionmakers by the
pharmaceutical industry to review strategies for addressing or averting
drug shortages. This high-level FDA team would also be empowered to
evaluate issues such as expediting reviews of pending supplements,
which enable industry to address shortages of critical drug products.
From an industry perspective, the formation of such a team that
includes high-level representatives from the FDA's Center for Drug
Evaluation and Research medical staff, Office of Compliance, Drug
Shortage staff and Office of Regulatory Affairs could provide the
expertise and the appropriate level of authority to effectuate rapid
decisions on steps to address drug shortages.
We recommend that industry work with FDA and other stakeholders to
implement the ARI communication tool in parallel with our other
recommendations in order to increase the channels of communication and
strengthen our collective ability to supply patients with the medicines
they critically need.
conclusion
In conclusion, Mr. Chairman, GPhA is committed to working with the
FDA and all stakeholders to minimize current drug shortages and prevent
future shortages from occurring. Nothing is more important to our
industry than ensuring patients have access to the lifesaving generic
medications they require, and with a joint effort among all involved,
we believe we can make a significant step toward accomplishing this
goal.
The Chairman. Thank you very much, Mr. Neas.
And now, Dr. Maris, if you'll sum up, I'd appreciate that.
Please proceed.
STATEMENT OF JOHN M. MARIS, M.D., CHIEF, DIVISION OF ONCOLOGY,
CHILDREN'S HOSPITAL OF PHILADELPHIA, PA
Dr. Maris. Mr. Chairman, Senators, ladies and gentlemen,
thank you for the opportunity to speak to this panel today, and
I'd like to take this opportunity to thank Senator Casey for
his very kind introduction. Senator Casey has been a firm
advocate for children, a leader in this area, and with Senator
Klobuchar, the legislation before us and the eloquent
discussion today, we're very encouraged that there's movement,
and we look forward to this committee's role in reaching
solutions.
Today I'd like to speak to you as a pediatrician, as an
oncologist, and also as a cancer researcher, to really cover
three points in my 5 minutes. I'd like to talk to you about how
our organization, the Children's Hospital of Philadelphia, has
responded to this crisis. I would like to talk to you as an
oncologist and how this has affected me and my practice and the
patients that I serve. And I'd also like to spend a brief
minute talking about something that hasn't been discussed here
that much, how this is affecting something that we in this
country should be so proud of, which is our clinical research
enterprise and how this is impacting dramatically clinical
trials and making advancements.
I think I speak for all of us in the field when I say that
sitting here today we feel like we've dodged a bullet to date.
We feel that there is this impending sense that if the status
quo remains or there aren't substantive solutions really soon,
that we are going to see unintended consequences of this.
As far as I know, there's not a reportable death, yet,
that's directly linked to drug shortage, but in my opinion it's
just a matter of time, and that's why I'm very hopeful that
this committee--and I sense the urgency here--will really
address this and address this quickly so that our patients will
be protected.
The Children's Hospital of Philadelphia is the largest
pediatric health care organization in the Nation. Over a
million patients walk through our doors each year. And we've
invested heavily in this problem. It was interesting to hear
how many staff there are at the FDA. At CHOP we've needed to
have three full-time people work on this problem. We have three
individuals who do nothing else but deal with the drug shortage
issue.
We've had to get innovative. We had to purchase
infrastructure to, believe it or not--we're talking about
sterile injectables. These are solutions that come in small
vials. We have robotics now that can take these solutions out,
actually preserve every last drop of it so that we can get this
out to our small patients and really be as efficient as we can.
And we have an intensive monitoring system. And I can tell you
that as I sit here today, these are just data from today, that
there are 35 drugs that we use every day that we only have
knowledge that we'll be able to have for the next 4 to 8 weeks,
9 drugs with 2 to 4 weeks supply, 10 drugs with less than 2
weeks supply, and there are 8 drugs that we commonly use at
Children's Hospital that we don't have right now. And these are
important drugs.
To be clear, what we've put into place at CHOP is possible
because of the resources we have, the intellectual resources,
but it's not sustainable and it's probably not replicatable by
many places across the Nation.
We've heard some anecdotes, and Senator Klobuchar opened
with a child with leukemia, and indeed let me just tell you
briefly what happened last summer. Despite everything we had in
place at CHOP, there was a 6-week period where we could not get
a drug called daunorubicin. We've heard doxorubicin mentioned
here today. There's another medicine called daunorubicin. We
could get the doxo, and we had met and talked about this issue,
and we needed to substitute it.
Just imagine for a minute that you're a parent or a
grandparent and you're sitting in a room with a physician who
is giving you the news that your child or grandchild has
cancer, and that we have researched this over the years and
we've figured out a solution that's going to work most of the
time. But one of the drugs, one of the key essential
ingredients, we don't have.
And so we're going to come up with a Plan B. And, no, we
have not been able to research this plan. And, no, there's
really not evidence that it's going to work as well. But that's
what we've needed to do, and we've needed to do it repeatedly.
In this particular situation, doxo, which we thought should
be a good replacement for dauno, it's too early to know whether
these patients will relapse and whether it impacted, but it
definitely made them more sick. Children got mouth sores, got
infections, spent time in the ICU. No child died from this, but
there was no doubt it was the unintended consequence of serious
toxicity due to this substitution.
You have to understand that cancer care at a place like
CHOP is very complex, dozens of therapies at the same time, an
electronic health record that has hundreds and hundreds of
treatment protocols. So just replacing a drug is something that
is subject to human error and is a very time-consuming and
inefficient process that we need to get beyond.
My last point is that each of the children over the summer
and most of the children treated in pediatric health care
institutions for cancer are on clinical trials, and there's no
doubt that we still don't have a sense of how these changes to
the backbone of chemotherapy in clinical trials is going to
affect our understanding of how to move the field forward.
I think it's also very important to emphasize that there is
a lot of excitement about developing new drugs, new therapies
for cancer, and that's the sort of work that I do. But there is
an unrealistic assumption that they're going to replace these
drugs that we're talking about today, and that's not true at
all. The new drugs are built on the backbone. Cancer research
is incremental, and it's very frustrating to me to have these
new drugs, some of which we've developed, and we're ready to
move them into clinical trials, but we can't even use the
backbone that we're going to need to build on. And so this is
an incredibly important part of the debate that I think has not
been discussed here in detail today.
Mr. Chairman, I'm very pleased to be part of this process
and to give the frontline view of what we see as a critical
problem. I've been there in the room looking a family in the
eye to tell them we don't have a drug, and this is something
that I look to this committee and members of the panel to find
solutions as quickly as possible. Thank you.
[The prepared statement of Dr. Maris follows:]
Prepared Statement of John M. Maris, M.D.
My name is Dr. John Maris, Chief of the Division of Oncology at The
Children's Hospital of Philadelphia (CHOP) and Director of our research
institute's Center for Childhood Cancer Research. CHOP is the Nation's
largest pediatric healthcare network with over 50 locations throughout
Pennsylvania and New Jersey and has over 1 million patient encounters
each year, which requires significant need for generic drugs that are
relatively common and orphan drugs that are not widely used because of
the high acuity and specialized nature of many of our patients.
We are concerned with the inadequate supply of life-saving cancer
drugs used in my pediatric oncology patients, anesthetics used during
surgery, and a large number of ``sterile injectables'' used by our
neonatologists in many of our most vulnerable patients. In response,
CHOP's pharmacy developed a customized database that provides real-time
information on our day-to-day supplies. The number of drugs in short
supply at our hospital has been steadily increasing. In fact, there are
eight drugs that we have completely run out of, forcing us to
substitute potentially equally effective, but often less desirable,
replacements.
For example, CHOP was unable to obtain daunorubicin, a drug known
to be essential for the cure of childhood leukemias--the most common
pediatric malignancy--and part of our standard of care for over two
decades. We were then forced to use the drug doxorubicin as a
replacement, despite there being no data available on the safety and
effectiveness of this as a leukemia therapy or any other replacement.
Withholding the drug altogether would definitely result in a much
higher risk for relapse. While it is too soon to know if the
substitution impacted the curability of these children, we noted
significantly more side effects, mainly severe mouth and gut
ulcerations, fever and infections. While no child died from these
complications, it is my opinion that it is only a matter of time before
this type of tragedy will occur. Absence of a single drug requires us
to rewrite the formulary and road maps for each patient who may receive
a substitution, a procedure which is highly complex, resource
intensive, and frankly highly subject to human error. Further, each of
the children who received the substitution over the summer were in the
midst of a clinical trial and we are deeply concerned that these types
of deviations from accepted practice will impact NCI-sponsored clinical
trial results.
While in most cases we are able to address such challenges in our
pharmacy, I suggest that any solution involve a partnership between
providers, manufacturers and government. This begins by making sure
that information on impending shortages is delivered responsibly and in
real time because the lack of notice of a medication becoming
unavailable can put patients at significant risk since many times there
are not appropriate alternative therapies for critically ill children,
or those with rare diseases. Other critical information we need is an
accurate estimate of re-supply dates so that we can accurately
determine the most appropriate conservation practices. Abolishing
``gray market'' practices would also help assure patient safety,
maximize legitimate supplies, and keep healthcare costs down.
It is important to note that the NCI infrastructure has supported
major advancements in recent years in the development of completely new
and impactful treatments to cancer. However, each of these advances is
built on the backbone of existing therapies, almost all of which are
off patent at this time. Without the bedrock of established and
curative drugs, recent discoveries mean many of our most seminal
advances in the field are in jeopardy of being reversed due to this
issue. Tools that help doctors provide excellent patient care need to
be readily available and continuously improved and these include
pharmaceuticals. We must remember at the epicenter of this issue is the
patient and I hope the information I shared will further invigorate
your efforts to ensure that drugs are readily available for the people
that depend upon them most.
______
Good morning. My name is Dr. John Maris, Chief of the Division of
Oncology at The Children's Hospital of Philadelphia and Director of our
research institute's Center for Childhood Cancer Research. In addition,
I am a Professor of Pediatrics at the University of Pennsylvania where
I direct the Pediatric Oncology Program in our National Cancer
Institute funded comprehensive cancer center.
I thank Chairman Tom Harkin and Senator Mike Enzi for holding this
hearing today, in addition to Senator Bob Casey, Jr. who has made this
and other issues impacting the lives of children a high priority.
The Children's Hospital of Philadelphia, or CHOP as it is more
widely known, is the Nation's largest pediatric healthcare network with
over 50 locations throughout Pennsylvania and New Jersey. We have over
1 million patient encounters each year and are home to one of the
largest pediatric research programs in the country. CHOP shares the
highest ranking on U.S. News & World Report's Honor Roll of the
Nation's best children's hospitals. Our main hospital in West
Philadelphia provides tertiary and quaternary care to a number of
children having multiple chronic conditions or who are affected by rare
pediatric diseases. Because of our high volume, we have an expansive
need for generic drugs that are relatively common but we also utilize
orphan drugs that are not widely used because of the high acuity and
specialized nature of many of our patients.
As a physician focused on childhood cancer, my top priority is to
make sure patients receive the best and safest care possible. As a
researcher, I am dedicated to finding cures for cancer while minimizing
or eliminating any side effects that result from the treatments we
provide to this very vulnerable group of children. Both roles have
enabled our research team to identify the main genes associated with
neuroblastoma, an extremely aggressive form of childhood cancer. As a
result, we have moved some of these discoveries toward new therapies, a
number of which are now in clinical trials and we certainly hope will
someday lead to a cure.
We work relentlessly to overcome obstacles in our work. The drug
shortage we discuss today is one that has had a very potent impact on
the progress we strive to make in research and clinical care. It slows
down our progress and can even bring it to a grinding halt.
Institutions like CHOP, and the National Institutes of Health, have
invested significant resources towards translational research, where we
convert our progress in the labs into treatments that may save lives in
the hospital. However, without the drugs that are known to provide
cures and form the backbone of our armamentarium, an important link in
this chain is missing which can cause setbacks of epic proportions.
My goal in this testimony is to provide insight into our concerns
at CHOP and share with you how we have responded to the drug shortages.
I will close with some of my personal opinions on suggested solutions
with the hope that they may help the committee in its efforts to
address this pressing issue.
Beginning with our more broad concerns, I will tell you that there
are a number of drugs we use commonly that are either in short supply
or not available. These include life-saving cancer drugs used in my
pediatric oncology patients, anesthetics used during surgery, and a
large number of ``sterile injectables'' used by our neonatologists in
many of our youngest and most vulnerable patients. In response to these
shortages, CHOP's pharmacy developed a customized database that
provides real-time information on our day-to-day supplies. The number
of drugs in short supply at our hospital has been steadily increasing
over the last few years to 123 drugs today, most of which are generic
injectables. We are monitoring 35 drugs with a 4 to 8 week's supply; 9
drugs with a 2 to 4 week's supply; and, 10 drugs with less than 2
week's supply left. There are also eight drugs that we have completely
run out of, forcing us to substitute potentially equally effective, but
often less desirable, replacements.
This list includes:
mitomycin injection, which is used for some surgical and
ophthalmic procedures;
co-trimoxazole (Bactrim) injection (which is available on
a compassionate use basis), but a commonly used antibiotic to prevent
serious infections in patients with compromised immune systems;
diazepam (Valium) injection, which is used as a sedative
in surgery and for seriously ill patients;
pancuronium injection, which is used to immobilize
patients for surgery;
ammonium chloride injection which is used to alter the
acid/base balance in critically ill patients; and
Selenium, chromium and cysteine injections, which are all
used to feed patients intravenously. The shortage of these agents poses
a particularly dire situation for patients, often the neonatal
population, who are unable to be fed in any other manner.
All of these shortages are presenting significant challenges to our
medical staff and can have life-threatening consequences for our
patients.
I would like to provide a recent example of how the drug shortage
problem directly and seriously impacts children with cancer at CHOP,
and how the consequences have a potentially dire impact in both the
short- and long-term. For a 6-week period this past summer, CHOP was
unable to obtain daunorubicin, a drug known to be essential for the
cure of childhood leukemias--the most common pediatric malignancy--and
part of our standard of care for over two decades. This drug is a big
part of why we can offer curative approaches to the majority of
patients. We were forced to use the drug doxorubicin as a replacement,
despite there being no data available on the safety and effectiveness
of this as a leukemia therapy or any other replacement. We did know,
however, that withholding the drug altogether would definitely result
in a much higher risk for relapse. While it is too soon to know if the
substitution impacted the curability of these children, we noted
significantly more side effects, mainly severe mouth and gut
ulcerations, fever and infections. While no child died from these
complications, it is my opinion that it is only a matter of time before
this type of tragedy will occur. You must understand that delivery of
cancer care to children requires a highly complex infrastructure. At
any one time, we have about 50 children receiving chemotherapy at CHOP
and there are over 300 different cancer treatment road maps written
into our electronic health record. Absence of a single drug requires us
to rewrite the formulary and road maps for each patient who may receive
a substitution, a procedure that is highly complex, resource intensive,
and frankly highly subject to human error. Finally, each of the
children who received the substitution over the summer were in the
midst of a clinical trial, and we are deeply concerned that these types
of deviations from accepted practice will impact NCI-sponsored clinical
trial results.
Another shortage we're experiencing here at CHOP includes some
ingredients used in total parenteral nutrition (TPN), which is a way of
supplying all the nutritional needs of the body by bypassing the
digestive system and dripping a nutrient solution directly into a vein.
The intravenous compound consists of carbohydrates, protein, fat,
multivitamins, and numerous electrolytes and minerals essential to
sustain life in patients unable to ingest food by other means.
Approximately 50 percent of the patients admitted to CHOP's neonatal
intensive care unit (NICU) have conditions such as gastrointestinal
abnormalities and/or extreme prematurity, which require TPN to survive.
CHOP often finds that many of the ingredients essential to TPN are
either completely unavailable or on shortage. For some of these
ingredients, such as selenium (which is one of the injectables that we
are completely out of), there is no substitution. For others, including
sodium phosphate, there are alternative agents, but these alternative
agents contain other ingredients (like aluminum) that may be harmful to
patients, resulting in neurotoxicity or renal failure. The inability to
provide appropriate TPN to patients may result in inappropriate
nutrition, leading to electrolyte abnormalities, negative developmental
outcomes (cognitive and physical), and longer hospitalizations. In
order to prevent these complications, physicians, pharmacy and
nutrition staff must invest a significant amount of time to develop an
appropriate substitution, often limited to oral supplements. However,
many children cannot take these due to their illness, leaving their
families and doctors with no alternative. The only solution to this
problem is the return of the electrolytes and trace elements in
shortage, the major components of TPN, back to the market.
In most cases, we are able to address such challenges in our
pharmacy. On a daily basis, our pharmacy purchasing staff monitors the
availability of medications known to be in short supply nationally and
enters this information into a customized database for tracking
purposes. The Pharmacy has a weekly meeting of key personnel
(supervisors, managers and clinical pharmacists) to review each
shortage individually, update the status, and create a contingency plan
for ongoing issues. Key physicians are contacted regarding shortages
that may affect their patient population and plans for conservation and
alternative therapies are created and implemented, often on an emergent
basis, as there is often no notice that a medication is about to become
unavailable. Conservation measures may require significant effort on
the pharmacy department, in terms of re-distributing supplies,
repackaging large quantities into smaller quantities, and tracking
prescribers down to change orders. We have invested over $2 million by
purchasing two ``robots'' which allow us to more efficiently use and
repackage medications that we buy in large quantities. This allows us
to stretch our supply and use every drop of a particular drug. The
Hospital's response is designed to help us avert disruptions in patient
care while ensuring the safety of our patients. These resources
represent a significant financial investment, but help us mitigate the
impact of drug shortages here at CHOP. All of these processes take a
minimum of three full-time CHOP pharmacy staff persons.
While these efforts have helped us address these challenges, we
have not overcome them entirely. I suggest this requires a partnership
between providers, manufacturers and government. This begins by making
sure that information on impending shortages is delivered responsibly
and in real time. S. 296, legislation introduced by Senators Amy
Klobuchar and Casey, coupled with President Barack Obama's Executive
order, will require drugmakers to notify the Food and Drug
Administration of shortages and this is an important step in the right
direction. We need this information because the lack of notice of a
medication becoming unavailable can put patients at significant risk,
since many times there are not appropriate alternative therapies for
some of these critically ill children, or those with rare diseases.
Without notice, there is no time to conserve or prepare for a prolonged
absence of a routinely used medication. Other critical information we
need is an accurate estimate of re-supply dates. These are often a
moving timeline that is continually being pushed into the future,
without any target date in sight at all. Knowing when a medication will
truly become available again would help us determine the most
appropriate conservation practices. Abolishing ``gray market''
practices would also help assure patient safety, maximize legitimate
supplies, and keep healthcare costs down.
For me, as someone who spends significant effort developing new
therapies for cancer, the paradox is quite striking. The NCI
infrastructure has supported major advancements in recent years in the
development of completely new and impactful treatments to cancer.
However, each of these advances is built on the backbone of existing
therapies, almost all of which are off patent at this time. It is quite
striking that it is easier for me to get to my patients a drug
discovered only recently and with a limited, and sometimes nonexistent,
track record of curing children with cancer, but I cannot get them
drugs that have been the bedrock of our curative therapies since the
1970's. Modern cancer therapy is not a replacement of the old ways; it
is an integration and an enhancement of established curative methods.
Without the bedrock of established and curative drugs, recent
discoveries mean many of our most seminal advances in the field are in
jeopardy of being reversed due to this issue.
I close today by commending this committee for not only
investigating the issue, but for also helping to identify a solution
for it. While I have shared insight into how The Children's Hospital of
Philadelphia is addressing drug shortages, I will tell you that our
efforts have required us to be nimble and shift resources away from
other priority child health demands, so that we may address this
important problem. We have very high standards for patient care and
safety and we will not allow this crisis to compromise that. As a
pediatric oncologist, I am awestruck at how such an issue can so
dramatically impact the children afflicted with cancer and the research
infrastructure we have built over decades to arrive at curative therapy
for all. As standards continue to rise, as they should, the tools that
help doctors provide excellent patient care need to be readily
available and continuously improved. These tools include
pharmaceuticals. We must remember at the epicenter of this issue is the
patient and I hope the information I shared will further invigorate
your efforts to ensure that drugs are readily available for the people
that depend upon them the most.
The Chairman. Thank you, Dr. Maris. Thank all of you. We'll
begin a round of 5-minute questions.
One thing that's come through to me from the first panel
and from this panel--almost every one of you talk about it--is
the need for early warning, early information coming from the
manufacturers to FDA. Mr. Neas had the ARI. Mr. Aitken, you
talked about an early warning system. I guess those are similar
concepts. Dr. Maris, you talked about it in your testimony,
too. Dr. Crosse, in your findings, GAO found that.
Somehow FDA is not getting any kind of advanced warning
from manufacturers that they may potentially face a shortage.
Is that correct?
Ms. Crosse. Yes.
The Chairman. OK. But you point out, Dr. Crosse, that FDA
does not have the authority to mandate this.
Ms. Crosse. That's correct. Currently they have a very
narrow authority.
The Chairman. Very narrow authority.
Mr. Neas, maybe this is for you. Would the manufacturers
voluntarily enter into some agreement with the FDA to provide
upfront information when they expect to see a shortage? As I
said earlier, the problem is you get two or three or four
manufacturers, and FDA doesn't really know what they're all
doing. If they had this reporting in, then FDA could take a
look and see and anticipate whether or not there may be a
shortage.
But is this something voluntarily that they would do, or
does FDA need some more authority to compel this type of
information?
Mr. Neas. Mr. Chairman, many of the generic manufacturers
already voluntarily supply that type of information. Having
said that, we're working with many members of the Senate and
the House looking at these notification bills, and we are
working with the members, and we want to make sure there are no
unintended consequences, especially with respect to the gray
market and violating confidentiality.
We're also thinking that it probably should apply to
everyone in the supply chain, not just with respect to
manufacturers. There are some really good ideas out there, and
we just want to make sure that it's framed precisely so that we
can all have multistakeholder support.
The Chairman. I'd like to know what that precisely is. So
we kind of all agree they need this information one way or the
other, but then you get to the second problem, Dr. Crosse,
which you point out, so what does FDA do with it? They have no
authority to tell a manufacturer you've got to produce more or
to do something. Then what do you do with that information?
Ms. Crosse. We found that when FDA did get advance notice,
they were able to be pretty effective. In the majority of
instances where they knew about a potential shortage, they were
able to take steps that were able to prevent that shortage from
really becoming the full-blown kind of problem that we're
seeing with other drugs. The problem is that right now, the
majority of the time they don't know about a problem in
advance. They learn about it from hospital pharmacists, from
patients, from other systems that are collecting data. FDA is
not finding out about it soon enough.
The Chairman. I still wonder what they do. If they see a
shortage coming, they can't go to a manufacturer and say
produce more, can they, Mr. Aitken?
Mr. Aitken. I think here also we need to differentiate the
nature of what a shortage is. I think a manufacturer that is
anticipating that they will reduce their production of a
particular product, that's one type of issue that we've heard
talked about.
But shortages exist because demand exceeds supply, and
that's why we believe actually you need to factor in the demand
forecasting for perhaps a 3- to 5-year period in advance,
understand where that incremental capacity can come from, from
the various manufacturers. Even if an individual manufacturer
may not be reducing their actual supply, there may still be a
shortage.
I think, though, this has to be grounded with the
manufacturers, but it does have to be multistakeholder. The
intermediaries are an important part of this as well.
The Chairman. Mr. Neas. Dr. Maris.
Mr. Neas. Mr. Chairman, I do want to re-inforce the
accelerated recovery initiative that we're talking about. FDA
has so much on its plate, and we're definitely supportive of
increasing resources and addressing the crisis.
With respect to looking at the supply schedule, that's why
we think this new initiative, this unprecedented private
sector, nonprofit initiative where we could actually collect
the necessary information and come up with an aggregated
available supply of critical drugs and get a consolidated
supply schedule, and then use this information to identify
potential gaps in supply compared to the current market
requirements. We think this is market-based. We think it comes
from the industry. We know this is a variable problem, but we
want to work with FDA and with everybody in the supply chain.
The Chairman. Dr. Maris.
Dr. Maris. In terms of projecting demand, I think that at
least in the oncology field, there are decades of data, and I
think it's pretty clear what the demand is going to be for most
of the sterile injectables for oncology.
In terms of tracking, I mean, what we do at CHOP is we
don't just track the manufacturers. We track at multiple points
along the supply chain, and I think that's been a critically
important part of our being able to stay somewhat ahead of it
and knowing more from the supply chain side when there's going
to be an impending shortage. The reason why it's so critical is
that we can make those alternative plans sooner rather than
overnight.
The Chairman. Thank you all very much. My time has expired.
Senator Merkley.
Senator Merkley. Thank you, Mr. Chair.
Dr. Maris, could you comment on the impact that the stress
has on patients when patients find out that drugs may not be
available when they're in the third course of treatment, or
that the drugs may have to be switched to something else and
they are not sure if it will work? And in general, whether it
makes a difference as to whether a patient is able to focus
their mind and heart on healing or has to focus their mind and
heart on, wow, am I going to be able to have the drugs
available?
Dr. Maris. Thank you for the question, and I think that the
quick answer to your question is it's not measureable, but it's
significant. I think that, at least in pediatric oncology, this
conversation most often comes up during that incredibly
horrific time of diagnosis when there is so much going on in
terms of being faced with a child with a life-threatening
illness, being faced with a major change in life as families
know it, the reality that therapy is on its way, and then to
hear that there is a major chink in the armamentarium is
devastating. I don't know how to articulate it any better that
it is a very significant problem.
Senator Merkley. And you noted often this is a time, at the
beginning of treatment or diagnosis, but I've talked to a
patient, and my impression is it's not that uncommon for it to
happen in the middle of a course of treatment as well, first
starting with a delay, come in Thursday rather than Tuesday,
and then getting calls saying we still don't have the drugs,
throwing the whole family into chaos as to what role should
they be playing in trying to track down appropriate drugs.
Dr. Maris. And there's no doubt that the time of diagnosis
is when families are most vulnerable, but during therapy as
well. To have a potentially curative therapy withdrawn from
being available to you is quite, quite difficult. And a point
that I'd really like to make from the physician side of things
and the researcher side of things is substitution is, at best,
an inexact science.
Senator Merkley. And you had noted in your testimony that
in some ways a bullet has been dodged because there's not an
attributable death. But certainly I have an impression from
medical providers in Oregon that whereas there may not be an
exact correlation of saying this person died because something
was unavailable, that many, many times, almost on a daily
basis, shortages are compromising the effectiveness of
treatment. Would that be fair to say?
Dr. Maris. I think it would be not only fair, and I'd like
to expand on that by saying that I cannot pick up the medical
literature and say this case report directly links drug
shortage to a death, but I think all of us in the field feel
that it is impacting patient safety and quality care quite
dramatically already, and we're just very concerned that this
is the tip of the iceberg if we don't do something soon.
Senator Merkley. Thank you very much.
Mr. Neas, several of us are trying to get our hands around
this gray market. It's clear that when there is something in
short supply, there's a temptation to try to gain a supply of
it and gain as much as possible, increase the shortage, and
then be able to sell at a high profit. We heard testimony
earlier about a 100-fold increase.
As I think about the pharmaceutical benefit managers,
they're in the business under contract to purchase drugs from
the manufacturers, under contract to deliver. Are there some
PBMs that appear to be in the business of buying extra amounts,
hoarding them, raising prices, or is it the impression that
really, no, this would never happen within the official system?
We're talking about third-party players who are coming in to
try to gain these supplies and then sell them at horrifically
increased prices.
Mr. Neas. Senator, I'm not aware of any incidents within
the pharmacy benefit managers. I do want to echo, however, what
you have said, and Senator Blumenthal and others. It's truly an
outrageous situation. As some of you know, I've just completed
my third month as the new CEO. But in my first week, I had a
chance to attend the FDA workshop on drug shortages, and there
were repeated references to the gray market. But no one could
really get a good handle on how much of a problem it was.
My very first question after my presentation when we were
in the panel was who has jurisdiction? Who is invested by the
law, by Congress? Is it the FTC? Is it Department of Justice?
Who has responsibility? I'm not sure any of us have gotten the
real response as to the extent of the problem, who is
responsible, and who should be investigating and enforcing. I
think it's a major issue.
Senator Merkley. One doctor told me that his institution
refuses to pay these inflated prices. But then families, when
the institution can't acquire the drug, are searching the
country over the Internet, so on and so forth, trying to find
the drug for their ill family member, and I want to echo what
you just said. It's absolutely unacceptable. Certainly I want
to work with all my colleagues and work with you all and the
industry on how can we stop this drug scalping, which
aggravates existing shortages. To me it's absolutely
unacceptable. And so I hope to get your help, all of your help,
in finding a way to address this.
Yes, doctor?
Dr. Maris. I just want to add that there's been a lot of
discussion about who this gray market is, and I don't know why
it's a mystery. I mean, we get faxes every week, and we just
shred them. But, I mean, you can have them.
Senator Merkley. Thank you. I would appreciate if you could
set aside a week's supply, and it appears that there's a gap
here as we're hearing the testimony. It seems like there's a
gap in terms of no one having accountability. It hasn't become
the FDA's role to investigate this and take it on. Apparently,
attorneys general haven't taken it on, perhaps because it's not
a crime.
But we have to fill this gap, and I think that's a very
valuable insight coming out of this committee, and we have to
devise a way, if it's not illegal, to make it illegal and to
end this practice.
I thank you all very much.
The Chairman. Thank you, Senator Merkley.
Well, there is a former attorney general who is focused on
this. Senator Blumenthal.
Senator Blumenthal. Thank you, Mr. Chairman, and my thanks
again for having this hearing and all of your excellent
testimony.
Dr. Maris, it may be no mystery, but the problem is there
has been no real investigation. That's the very simple answer
to a doctor, talking to you as a former attorney general. But
as a lawyer, some of these practices are quite clearly against
the law, existing law. This kind of anti-competitive misuse of
market dominance fit almost a textbook case for an FTC or
Department of Justice investigation. And so I would take your
comment as further support for it.
Mr. Neas, I first want to thank you for your very
distinguished work in the area of consumer protection, as well
as civil rights and civil liberties, and welcome your proposal,
which I think is helpful in advancing the debate or discussion.
Simply to think of a team, a SWAT team as you called it, that
would be more proactive and interventionist, aggressive in this
area I think is a welcome initiative.
My question to you is whether the FDA really has sufficient
authority now to make the SWAT team effective. The concept may
be good, but you've heard the GAO report, Dr. Crosse in
particular, talk about what the FDA cannot do now. And so I
wonder whether your team proposal wouldn't call for more
authority on the part of the FDA.
Mr. Neas. That's a good question, Senator. I'm not sure of
the answer. I know something has to happen. We've heard about
the backlog and the shortage problem, and the FDA needs so much
help. They're so good, but they need so much help, just
materials from the Office of Generic Drugs. The median approval
time of an abbreviated new drug application is now 30 months
for a new drug application. That's 65 percent higher than 4
years ago. There are now 2,000 abbreviated drug applications
that are over 180 days, 2,000, another 600.
They need personnel. They need prioritization. There's got
to be more coordination. I think the SWAT team approach--Drug
Shortage does an unbelievable job. But we were told we went
from three or four to seven or eight, or eight or nine.
When you stated the question about the nature of the
crisis, I think the response of the multistakeholder
collaboration, its intensity should match or exceed the nature
of the crisis. If this is this kind of a crisis, I think eight
people at Drug Shortage is far fewer than they need.
And by the way, we have worked with FDA on the PDUFA bill,
which will be before you all. And Senator Harkin, Mr. Chairman,
we've talked about it one on one. It is going to be an
enormously consequential legislative measure, providing 800 or
900 more inspectors with respect to facilities inspections, but
it's also going to help with the abbreviated drug problem, the
application and approval problem.
But there's got to be that coordinated prioritization. And
I'm not saying there's not talk in meetings and prioritization.
I think it has to happen on a far higher level with much more
intensity and effectiveness.
Senator Blumenthal. I thank you for that answer, and I
agree with you on your comments about the staff shortage.
Dr. Crosse, let me ask you, your report says that the drug
shortages--and I'm going to quote exactly the line--``65
percent of shortages involve drugs that were in short supply
more than once.'' Does that mean that the same drug was in
short supply more than one time; in other words, repeated
times? I would read the plain English as saying that.
Ms. Crosse. Yes, that is what we mean. Many of these drugs
have been in short supply multiple times over the last decade.
Some of the drugs that we looked at in detail had been in short
supply as many as five times.
Senator Blumenthal. It isn't as if there's a short supply,
there's a manufacturing problem, the FDA comes in, offers
friendly advice, the problem is fixed, no problem again. These
are chronic, repeated shortages.
Ms. Crosse. In some instances, they are. All of the 15
drugs that we looked at in depth, I think there were only four
of them that had not been in short supply multiple times across
the last decade.
Senator Blumenthal. One last question, and thank you for
your great work on this report. You say that, again in the
report, that over half--and I'm quoting--``over half of
shortages reported during the relevant time period were in
generic injectable drugs.'' As others have commented here, a
substantial percentage were not in that category. Do you know
the percentage?
Ms. Crosse. We do have information in the report. I'd have
to sit here and add those numbers up, but we do have a figure
in the report that lays that out. The injectable drugs that
were available only in generic form, 53 percent. An additional
15 percent of injectable drugs were available only in brand
name forms. Then there were 16 percent that were orally
administered drugs available in generic form. That could be
generic and brand name. And another 4 percent were orally
administered drugs available only in brand name form. And then
there were 12 percent of other types of drugs that were
topicals and other sorts of things.
Senator Blumenthal. I would like to have an opportunity for
my staff to contact you and verify those numbers. And also,
since I'm out of time, I can't ask this question. But I'm
interested in why the FDA does not have sufficient authority
now to require notification of a drug shortage under 506(c) of
the Federal Food, Drug and Cosmetic Act. I gather it is
requiring some kind of notification, and why it does not have
sufficient authority now.
Ms. Crosse. Right. The current authority only relates to
where there's a sole supplier of a drug, and that drug has to
be life-supporting, life-sustaining, or to prevent a
debilitating disease or condition. It's a narrow set of drugs
that are covered by the current authority.
Senator Blumenthal. Is that as a matter of regulation?
Ms. Crosse. That's their statutory authority.
Senator Blumenthal. OK. Thank you very much.
Thank you again to the entire panel. You've been very
helpful.
The Chairman. Senator, I think Mr. Neas wanted to respond
to this.
Senator Blumenthal. I'm sorry.
Mr. Neas. Mr. Chairman, thank you so much. I just need 30
seconds. Is that all right?
The Chairman. Absolutely.
Mr. Neas. This accelerated recovery initiative, which is
brand new in terms of being announced today, the
multistakeholder approach that people have been talking about,
I do want you to know that Premiere, one of the group
purchasing organizations, has come out for it today, and I
believe there could be a number, maybe all of the group
purchasing organizations. We've had pharmacists, hospitals,
American Cancer Society. I've also met with John Castellani
about working together on drug shortages.
I'm just making a point to demonstrate momentum, but most
importantly the multistakeholder collaboration within the
industry, but also with FDA, with you all, and with the
executive branch.
Senator Blumenthal. I would welcome that cooperation as we
move forward. Thank you very much.
Thank you, Mr. Chairman. Sorry to go over my time.
The Chairman. Oh, that's fine, Senator Blumenthal.
Senator Casey.
Senator Casey. Thank you, Mr. Chairman. I know we're at the
end of the hearing, and I apologize for my back and forth here.
The Chairman. Oh, no. Please.
Senator Casey. It's been one of those days.
Doctor, and I know our other witnesses--I'll make sure that
I submit questions for the record. I'm grateful for your work
and the scholarship and the advice that you give to us. But I
wanted to start with Dr. Maris, and I'll be rather brief.
I know that Children's Hospital in Philadelphia has
invested a tremendous amount of time and resources trying to
manage this problem and trying to deal with it directly, and I
guess I'd ask you, because I know you've got a technological
infrastructure and other means to help track these shortages,
but what advice can you give, if any, that's relevant to a
smaller entity, a smaller hospital or hospital system or in a
community where they may not have the IT resources, they may
not have the opportunity to invest in the way that you have?
Any kind of common practices that would prevail, no matter what
the level of investment or resources, that you could give us
some advice about?
Dr. Maris. Thank you for that question. I'll answer it two
ways. The first answer is that it's very difficult and may not
be practical for many smaller institutions to do what we've
been able to do. That was one of the points I wanted to get
across is that we've been able to address this issue, but many
places may not be able to.
In terms of tangibles that we can share, there's no doubt
that the grassroots tracking system that we put into place, the
databasing, is already being shared amongst the pediatric, the
Children's Health Care Association and the major children's
hospitals. But how we can trickle that down to all the
children's hospitals is something that we have not addressed
yet.
Senator Casey. And we'll try our best to be able to provide
that kind of feedback.
One of the main purposes of the legislation that Senator
Klobuchar and I and a whole host of others have been working on
is to provide that early warning system in place that several
of our witnesses today have spoken to, in one kind or another.
I want to make one point for the record. I'll just state
this and then conclude.
There's been some talk about the causes here, and I noticed
that, Mr. Neas, in your testimony about why this is happening,
you say in your testimony that there are multiple reasons, but
insufficient supply of available raw materials is one you cite,
inadequate or delayed communications about shortages, and I
know the GAO report cites a number of manufacturing-related
causes.
I think there's been some indication in Washington here
that folks are pointing to price and reimbursement. I think we
got a--especially in light of your testimony, how important
that was to have you outline what the causes are, not some of
the things we've heard from folks here in Washington. That's an
important point that you made to help us better understand not
just the causes but, therefore, some of the solutions.
I know we're wrapping up, and I'm just grateful that you
gave us this time and bring to us your expertise. Thank you.
The Chairman. Any last thing from any of our witnesses
before we adjourn for the day?
[No response.]
If not, I also thank you all very much for your work in
this area, your leadership, and for being here today.
I think we got good testimony today from both this panel
and the previous panel. It is a complex problem, but I don't
think it's unsolvable.
I thank you all very much. The record will remain open for
10 days for Senators to submit any other comments or questions.
And with that, the committee will stand adjourned. Thank
you.
[Additional material follows.]
ADDITIONAL MATERIAL
Prepared Statement of Jerry A Cohen, M.D., President, American Society
of Anesthesiologists; and Arnold J. Berry, M.D., M.P.H., Vice President
for Scientific Affairs, American Society of Anesthesiologists
On behalf of the over 48,000 members of the American Society of
Anesthesiologists (ASA), we would like to thank Chairman Harkin and
Ranking Member Enzi for holding a hearing regarding drug shortages on
December 15, 2011, and allowing ASA the opportunity to submit a
statement for the record. We greatly appreciate your willingness to
bring this important topic before the Senate Committee on Health,
Education, Labor, and Pensions and for your efforts to address this
issue.
As the recognized leader in patient safety, anesthesiologists are
seriously concerned about the toll drug shortages are having on our
patients. In April 2011, ASA conducted a survey of 1,373
anesthesiologists to quantify the impact of drug shortages on our
patients and practices. Our survey results demonstrated that as a
result of drug shortages, 51 percent of anesthesiologists altered a
procedure in some way, 48 percent felt shortages resulted in a less
optimal patient outcome, 48 percent reported longer operating room or
recovery times and 10 percent postponed or cancelled procedures. While
these numbers may be alarming they pale in comparison to the 98 percent
of anesthesiologists who experienced a drug shortage during the past
year, or the 90 percent of anesthesiologists that reported a shortage
of 1 or more drugs at the time of the survey.
One of the most common drugs for which anesthesiologists reported a
shortage is propofol. In fact, 88 percent of anesthesiologists reported
experiencing a shortage of this drug. For anesthesiologists, propofol
is one of the most commonly used drugs for the induction of anesthesia
or for providing sedation. Other drugs used for these purposes may
result in less than optimal patient outcomes including prolonged
awakening, longer stays in recovery prior to discharge and increased
nausea and vomiting. While anesthesiologists are trained to safely use
multiple drugs, and can often find alternatives for drugs in short
supply, these shortages can cause decreased patient satisfaction
(prolonged awakening, delayed discharge, nausea) or adverse outcomes,
including death in extreme situations (e.g., trauma patients, unstable
hemodynamics, airway emergencies).
In November 2010, ASA along with the American Society of Clinical
Oncology, the American Society of Health-System Pharmacists, the
Institute for Safe Medication Practices and the American Hospital
Association co-convened a Drug Shortage Workshop Summit.
This Drug Shortage Summit Steering group, consisting of the co-
conveners, manufacturers, distributors and group purchasers, released
initial findings and continued to meet over the course of the next 10
months producing a series of five recommendations for regulatory and
legislative action. The work group made the following
recommendations.\1\
---------------------------------------------------------------------------
\1\ Regulatory and Legislative Recommendations from the Drug
Shortages Summit Steering Group. Drug Shortage Legislative-Regulatory
Work Group: American Society of Anesthesiologists et al. November 5,
2011. http://www.ashp.org/drugshortages/summitreport.
1. Reallocate resources within FDA and for the Congress to
authorize and appropriate funding for FDA activities that prevent or
mitigate shortages.
2. Require manufacturers to report product discontinuations and
manufacturing interruptions 6 months in advance or upon determining
that production will not meet average historical demand. Establish
communications methods to provide accurate and timely information to
health care providers. Establish methods to better predict the
seriousness and duration of drug shortages.
3. Establish criteria for determining whether a drug is vulnerable
to shortage. Designate drugs that are vulnerable to shortage as part of
the FDA approval process. Establish appropriate incentives for
manufacturing redundancies or other means of producing emergency
supplies for drugs that are deemed vulnerable to shortages. The
pharmaceutical industry should collaborate with regulatory and
legislative entities to identify these incentives.
4. Require collaboration between the FDA Center for Drug Evaluation
and Research divisions and the Attorney General to establish a process
that would expedite the increase in manufacturing production quotas
when needed in response to drug shortages of controlled substances.
5. Leverage current FDA pathways to expedite the approval process
for medically necessary unapproved drugs that are vulnerable to
shortages without compromising the safety of the drug.
While drug shortages are an issue for patients and physicians,
shortages also negatively impact health care costs. Drug shortages have
resulted in significant price increases and have often caused providers
to search alternative sources to obtain critically necessary drugs. In
a recent study, Premier found that the average markup on a drug sold in
the grey market is 650 percent. However, for propofol the average
markup is a startling 3,161 percent.\2\ Anesthetic drug shortages can
increase procedure and recovery times as a result of anesthesiologists
being forced to select alternative therapies, as well as increase
societal and health system costs for cancelled or postponed cases. At a
time in which Congress and the Administration are focused on reducing
health care expenditures and maximizing patient safety, quality and
satisfaction, drug shortages present a considerable obstacle to these
important objectives.
---------------------------------------------------------------------------
\2\ Cherici, Coleen; Patrick McGinnis and Wayne Russell. Buyer
Beware: Drug Shortages and the Gray Market. Premier Inc. August 2011.
http://www.premierinc.com/about/news/11-aug/Gray-Market/GrayMarket-
Analysis-08152011.pdf.
---------------------------------------------------------------------------
Anesthesiologists are end users of drugs and need to be better
informed about drug shortages and the duration of the shortages. We are
pleased to see that Congress and the Administration recognizes the need
for provider notification and has taken steps to address this issue.
Recently, the Administration has taken a number of steps to combat
drug shortages. On October 31, 2011, President Obama issued an
Executive order that would quicken the review process for applications
to start or change production of drugs in shortage, widen the reporting
of shortages and expand notifications of shortages and sharing relevant
information regarding possible price gouging with the Department of
Justice. We commend the Administration for their efforts. These are
important steps to address drug shortages, and we fully support them.
Also, we fully support and thank Senator Amy Klobuchar for
introducing the bipartisan Preserving Access to Life-Saving Medications
Act (S. 296), which would require drug manufacturers to notify the Food
and Drug Administration if there is an interruption in manufacturing
that could lead to a drug shortage. Currently, the Senate version has
20 cosponsors and continues to gain support. We strongly urge Congress
to pass this legislation during the 112th Congress.
In addition, ASA looks forward to working with Senator Hatch as he
develops legislation to address drug shortages, and we look forward to
working with all members of the Senate Committee on Health, Education,
Labor, and Pensions to address this issue.
Again, thank you for holding such an important hearing on an issue
that if addressed properly can improve quality of care for our
patients.
______
Department of Health & Human Services,
Food and Drug Administration,
Silver Spring, MD 20993,
March 27, 2012.
Hon. Tom Harkin, Chairman,
Committee on Health, Education, Labor, and Pensions,
U.S. Senate,
Washington, DC 20510.
Dear Mr. Chairman: Thank you for providing the opportunity for the
Food and Drug Administration (FDA or the Agency) to testify at the
December 15, 2011, hearing before the Committee on Health, Education,
Labor, and Pensions entitled ``Prescription Drug Shortages: Examining a
Public Health Concern and Potential Solutions.'' We are providing
responses for the record to written questions from certain members of
the committee sent to us by committee staff on January 19, 2012.
If you have further questions, please let us know.
Sincerely,
Jeanne Ireland,
Assistant Commissioner for Legislation.
______
Response to Questions of Senators Casey, Blumenthal, Enzi, Burr, and
Hatch by the Food and Drug Administration
questions of senator casey
Question 1. Some people have suggested that drug shortages are, at
least in part, related to changes in regulatory actions and standards,
as well as increased enforcement, on the part of the FDA. For example,
some have suggested that the FDA is now requiring manufacturers, in
particular sterile injectable manufacturers, to meet higher levels of
quality for processes and products than it did over the past few
decades. Can you comment on whether the FDA Good Manufacturing
Practices (GMPs) or other standards have changed with respect to
sterile injectables? Have the amount of resources, or the priority that
FDA has placed, for enforcement of GMPs and other standards increased
in the past few years for sterile injectables? Finally, can you comment
on whether technology has changed over the past decade in a manner that
allows the FDA and/or manufacturers to track the purity of drugs, or
the quality of drug products and manufacturing processes, in a way that
was not previously possible?
Answer 1. The trend of increased drug shortages does not correspond
to an increase in regulatory requirements. FDA does everything in its
power to prevent and/or mitigate drug shortages, including exercising
regulatory flexibility. FDA carefully considers the impact of any drug
shortage on patient care and access before taking any enforcement
action.
There have been no recent major changes to the Current Good
Manufacturing Practice (CGMP) regulations that would substantially
impact drug product manufacturing, including sterile injectables. The
CGMP regulations for finished pharmaceuticals are the minimum standard
by which drugs must be manufactured, and are written to be flexible and
adaptable to newer manufacturing technologies and analytical
techniques. The CGMP regulations ensure that consumers have drugs made
with the correct ingredients, have been processed in a controlled
manner to ensure delivery of the safe and effective amount of the
active ingredient, are free of harmful contamination, and will remain
safe and effective throughout the labeled shelf life.
In September 2008, FDA finalized minor changes to its CGMP
regulations for aseptic processing to incorporate a long-standing,
enforced Agency interpretation, and there were no significant
objections to this revision. FDA's ``Guidance for Industry, Sterile
Drug Products Produced by Aseptic Processing--Current Good
Manufacturing Practice,'' was last revised in 2004 using a public
notice and comment process and was well accepted by manufacturers at
the time of finalization. Note that FDA guidance documents represent
the Agency's current thinking on a topic. Guidance documents are not
mandatory and do not operate to bind FDA or the public; alternative
approaches may be used if the approach satisfies the requirements of
the applicable statutes and regulations. We are unaware of any changes
to private or other standard-setting organizations, including the
United States Pharmacopeia, in a way that imposes a higher-quality
level on sterile injectable drugs.
Sterile injectable drug manufacturing operations are vulnerable to
microbiolog-
ical contamination and require more complicated controls and equipment.
For many years, due to heightened patient safety concerns, FDA has made
such drugs a higher-inspection priority, but there have been no recent
changes to the FDA inspection program for sterile injectable
manufacturing operations.
FDA has exercised substantial regulatory flexibility in working
with firms experiencing CGMP problems to help them identify and resolve
quality problems and get their drugs back to market as expeditiously as
possible. Sterile injectable drugs have unique manufacturing and market
features, which make shortages of these products more likely to occur
and harder to prevent or mitigate. These include:
Manufacturing operations are complicated to control and
more vulnerable to problems that affect safety (e.g., microbiological
contamination);
Dedicated manufacturing lines are often required;
The top three generic injectable manufacturers hold 71
percent of the market for generics, by volume;
Most sterile injectables have one manufacturer that
produces at least 90 percent of the drug (innovator and generic
combined); and
``Just-in-time'' manufacturing and inventory practices
leave little margin for error.
Technology has improved over the past decade in the area of sterile
drug product processing and test methods, but not all advances have
been widely adopted. Methods to measure air quality and microbiological
contamination in the manufacturing environment now permit more
consistent and rapid detection of these types of hazardous
contamination. Automated methods to detect and quantify foreign
particles in sterile injectable liquids have also improved over the
past decade, although such methods are not in common use and are not
required by FDA. The quality standards in such areas allow for minor
variations, so improvements in detecting such contamination would not
necessarily result in a greater number of batch failures or disruption
to manufacturing capacity.
The past two decades have also seen improvements in preventing
objectionable contamination in sterile injectables. Processing methods
increasingly incorporate equipment and techniques designed to reduce
contamination--microbiological and other--in sterile injectables. Many
of the processing advances decrease the amount of operator access--a
primary source of microbiological contamination--to the critical
processing areas where vials are open to the environment. FDA has
encouraged manufacturers of sterile injectables to adopt processing
methods that improve sterility assurance. Together, these advances
represent important steps forward in improving the quality of
manufactured products.
Question 2. In your testimony you note that of the 127 drugs in
shortage that the FDA tracked during 2010-11, 43 percent were innovator
drugs. I assume that by innovator drugs, you mean brand name drugs
(i.e., drugs that are still under patent). I thought that it was
interesting that more than two in five drugs in shortage were innovator
drugs given that we have heard some people say that low reimbursement
is one of the causes of drug shortages. But if a drug is still on
patent, its manufacturer can really charge whatever price it needs.
Does that imply that the causes of drug shortages are more complicated
than just pricing or reimbursement, and if so, to what causes do you
attribute the shortages among innovator drugs?
Answer 2. Yes, the causes of drug shortages are more complicated
than pricing or reimbursement. The main causes of drug shortages for
the past 2 years are similar for both innovator (brand name) drugs and
generic drugs and have included:
Problems at the manufacturing facility (43 percent of
drugs in shortage tracked from January 2010-August 2011);
Delays in manufacturing or shipping (15 percent of drugs
in shortage tracked from January 2010-August 2011); and
Active pharmaceutical ingredient shortages (10 percent of
drugs in shortage tracked from January 2010-August 2011).
In our experience, the factors that contribute to drug shortages,
both innovator and generic drugs, generally include:
Industry consolidation and limited capacity (many
innovator products are made by contract manufacturers that make
multiple drugs on the same manufacturing lines and the capacity is
often limited);
Difficulty in producing a given drug;
Quality and manufacturing problems (in some cases
facilities have not been upgraded appropriately, equipment has not been
maintained properly, and appropriate quality systems are not in place);
Unanticipated increases in demand;
Inventory and distribution practices (which may lead to
regional shortages); and
A business decision to discontinue manufacturing the
product (e.g., in favor of producing a more profitable drug or because
the product is not profitable).
Discontinuances caused 8 percent of shortages in 2010 and 2011 and
have usually involved older sterile injectables that were discontinued
for business reasons, such as to make production room for a different,
more profitable product. Economic factors may also influence a firm's
decision to not maintain their facilities and quality systems
adequately. For example, manufacturers may continually decrease idle
time for their manufacturing lines, running them in production mode
continuously. This practice puts stresses on the production equipment
and makes little time available for maintenance and repairs.
Question 3. In your testimony you note that in 4 weeks following
the issuance of the President's Executive order, you received a sixfold
increase in notifications from manufacturers. Can you comment on
whether the types of things that you were notified about were
materially different from previous notifications? Are you now hearing
from a broader group of manufacturers?
Answer 3. Yes, we are hearing from a broader group of
manufacturers. However, the types of issues that manufacturers notify
FDA about have not substantially changed and include the following:
Quality defects or other problems they are experiencing
that are causing actual or potential shortages;
Requests for expedited review of changes in manufacturing,
new manufacturing sites, new suppliers, or other changes;
Delays or temporary unavailability for any reason;
Potential shortages for any reason, with requests that the
normal importation process be expedited for their approved raw
materials or approved finished goods.
Question 4. In your testimony you note that the FDA is assessing
commercial systems that could be contracted to provide ongoing or
periodic data on sales and distribution of drugs at the wholesale level
to detect early signals of potential shortages or supply disruptions.
Can you comment on the FDA's current ability to--at a bird's eye view--
identify and track shortages? Can you further describe efforts underway
to identify such a commercial system and what types of conversations
you are having with manufacturers and distributors about such an
initiative? Do you have an estimate of what types of resources would be
required to execute such contracts?
Answer 4. FDA's Drug Shortage Program is currently able to track
and monitor shortages and potential shortages that are reported to us.
What we are trying to ascertain is whether there are ways we might
track and monitor factors that could predict products or facilities
that are at high risk for leading to drug shortages. To date, we have
not identified any commercial sources for these types of data. We are
also aware of academic centers working on development of such data, but
their efforts have not yet yielded useful information, either.
Therefore, we have begun to examine our own sources of data, such as
records of facility inspections and other compliance activities, to
determine whether any factors alone or in combination are predictive
enough to serve as a bellwether. This process is extremely labor-
intensive and data must be compiled manually.
Data from wholesalers and distributors may provide signals that a
shortage is already underway; however, we prefer to have notification
of shortages or potential disruptions in supply from the manufacturers
themselves so that we can offer assistance, before the shortage reaches
the wholesalers and distributors. Therefore, FDA has continued to
encourage manufacturers to notify the Agency of any shortage or
potential disruption in supply. In addition, on December 19, 2011, FDA
issued an Interim Final Rule (effective January 18, 2012) that expanded
the circumstances required to be reported to FDA related to
``discontinuances.''
In February 2012, FDA issued a Draft Guidance, explaining the
amendments to the implementing regulations published as an interim
final rule on December 19, 2011 (effective January 18, 2012). It
provides guidance to industry on voluntary notification to FDA of
issues that may result in a shortage or potential disruption in supply
of a prescription drug or biological product in the U.S. market,
regardless of whether mandatory notification is required under section
506C.
Question 5. In your recommendations you note that the FDA has
doubled the number of staff to help alleviate drug shortages. Since the
Drug Shortage Program is currently housed within the Center for Drug
Evaluation (CDER), can you comment on how this work is funded? Is any
funding drawn from user fees?
Answer 5. The additional staff are predominantly on temporary
assignment from their positions in a number of offices from across
CDER. This allows us to assess how best to plan for hiring of permanent
positions, while we address current shortage prevention and mitigation.
These staff positions are funded in part by user fees and in part by
appropriated funds.
Question 6. Can you comment on the broader resource needs at the
FDA (e.g., technological, infrastructure, or otherwise) for
appropriately preventing, identifying and tracking, and managing and
resolving drug shortages? Would it be preferable to establish a
separate Center for Drug Shortages and directly fund that entity so
that it can appropriately staff itself and make much-needed investments
in technology for tracking drug shortages, as identified in the recent
GAO report?
Answer 6. The Drug Shortage Program (DSP) has grown from 3 full-
time staff members in 2010 to 11 full-time staff members in February
2012. DSP coordinates tracking and responses to prevent and address
shortages. DSP creates a team of experts throughout the Agency for each
shortage issue. The specific disciplines involved in each shortage team
vary, depending on the issues involved and can involve physicians,
chemists, microbiologists, manufacturing and compliance experts, and
many others. It is important to note that not all shortages can be
prevented or resolved quickly due to the significant safety and quality
issues that may be involved. However, in all cases, FDA utilizes a team
of experts and employs all available tools to prevent and address the
shortage or disruption in supply.
Relocation of the DSP outside of CDER would not improve tracking or
the Agency's response to drug shortages. DSP's presence within CDER
greatly facilitates its ability to effect collaboration in addressing
and preventing shortages. There is a large pool of experts within CDER,
called upon to assist with drug shortages, and DSP engages other
offices outside of CDER when necessary.
Question 7. Can you comment on specifically how the Drug Shortage
Program (DSP) works with others within the FDA, including the Office of
Commissioner, to ensure that drug shortages are prevented as much as
possible, and resolved as quickly as possible? What sort of
coordination and communication occurs between DSP and different
relevant centers at the FDA, and how regularly does it occur? What
barriers stand in the way of achieving better coordination and
communication within the FDA? As Mr. Neas shared in his testimony, the
generic pharmaceutical industry strongly encourages the establishment
of a high-level FDA drug shortage management team, which would include
representation from key agency offices. What do you think about this
proposal?
Answer 7. FDA is committed to prevent and address drug shortages.
CDER works diligently to coordinate across all offices to resolve drug
shortages expeditiously. DSP works closely with CDER's Office of
Compliance (CDER/OC), Office of Generic Drugs (OGD), and Office of New
Drug Quality Assessment in an effort to prevent or mitigate drug
shortages. Communications between various offices within CDER regarding
shortages occurs daily. This includes communications between DSP, CDER/
OC, and the review divisions. That said, we know we can always improve
and we have a Drug Shortage Network in place with key individuals
assigned to work on shortage issues in each of these offices so that
timely communications occur within CDER and between CDER and other
offices and Centers as needed, regarding shortages. CDER also engages
FDA's Office of Regulatory Affairs (ORA) to coordinate domestic and
international investigations and inspections as necessary. The Office
of the Commissioner is also involved to provide policy guidance and
analytic assistance as needed by CDER.
Communications between Centers regarding shortages occurs when a
shortage issue affects more than one Center. This occurs rarely and
could involve, for example, a manufacturer experiencing quality issues
that involve veterinary drugs, human drugs, and vaccines. This example
would involve three Centers in FDA, and the shortage programs in all
three Centers would work together to coordinate all actions and
responses to the shortage. The shortage programs in the different
Centers have shared best practices and continue to do so.
FDA continues to improve coordination and communication, both
within CDER and with other parts of the Agency. For example, FDA formed
an additional working group to concentrate efforts on improved
communications and coordination by and between ORA district offices and
CDER. Additionally, we have identified dedicated Drug Shortage
Coordinators in each ORA District Office. These coordinators will
facilitate communications with the Center, which, in turn, increases
the number of early notifications to CDER that firms are planning to
cease or slow production or are experiencing significant quality
problems that could lead to a shortage.
A high-level drug shortage management team is thus already in place
and includes the Drug Shortage coordination staff as well as a high-
level team of experts from across FDA who possess the specific
knowledge and skills needed to help address and prevent shortages. The
current structure allows us the flexibility to adapt to changing
circumstances, while still ensuring communication and coordination.
Question 8. Can you comment on how well the FDA has been able to
develop and institutionalize a comprehensive and cross-center strategic
plan to address drug shortages that will hopefully, over time, help to
reduce the number of shortages?
Answer 8. DSP has an established network of experts involved in
shortage management and prevention. This team includes individuals from
across the Center and involves compliance/manufacturing experts,
chemists, microbiologists, toxicologists, and clinicians who are called
upon to assist with addressing and preventing shortages. FDA has
established a Drug Shortage working group to continue to investigate
the causes and solutions to shortages and to improve communications
between the various components of the Center as well as between the
field offices and the Center.
questions of senator blumenthal
Question 1. Dr. Kweder, what type of data is FDA keeping about
these shortages and their efforts to mitigate such shortages? Why are
these shortages lasting for, on average, 9 months? What actions are
taking place during those 9 months to mitigate the shortage?
Answer 1. FDA developed a database to track the numbers of
shortages, the types of products in shortage, the reasons for the
shortages, and the FDA actions taken to help resolve and prevent the
shortages. FDA re-assesses all shortages and potential shortages daily
and is doing all that we can within our authority to prevent and
address shortages.
Some shortage problems, such as loss of a manufacturing site or
severe manufacturing or quality problems that could pose a considerable
risk to patient safety, may take firms significant time to resolve. If
there are no other manufacturers able to increase production of the
product quickly (usually due to capacity limitations) or available
product for import, then more time may be required while the original
manufacturer works to address the quality problem and bring the product
back online. However, if there are ways that FDA is able to help, such
as assisting with a quality problem when there is not a significant
risk for patients, or expediting review of changes in manufacturing
sites, suppliers or processes, these issues can be addressed quickly,
sometimes in days or weeks. An example of this is a potassium phosphate
injection that had particulate matter in the vials. The firm was able
to show with data submitted to FDA that the particulate matter could be
successfully removed by a filter and the drug was able to be shipped
with the filter and instructions for pharmacists to use the filter with
the drug to prevent risks for patients. The review of this issue was
completed within days after receiving the proposal from the firm.
In cases where a long-term shortage is anticipated, FDA searches
for firms that manufacture drugs for foreign markets and would be
willing and able to temporarily import a drug that could help meet
critical patient needs. Temporary importations have occurred for nine
drugs over the past 2 years. Five of those drugs are currently being
temporarily imported. FDA evaluates the drug available in the foreign
market to ensure there are no significant safety problems for U.S.
patients and that it is made in a manufacturing site that meets FDA
standards. FDA is not always able to find a firm willing and able to
import to address a shortage; however, it is something that we explore
when there is a long-term shortage of a critically needed drug.
Question 2. Dr. Kweder, what is the relationship between shortages
in the United States and abroad? Are the same shortages felt
internationally, generally? Or is the United States in a unique
position?
Answer 2. FDA is working closely with other regulatory authorities
in Europe, Australia, the United Kingdom, and Canada on existing drug
shortage problems, as drug shortages are not unique to the United
States, but are a global problem. For example the recent Doxil shortage
has affected Europe, Canada and the United States. During our
discussions with international regulatory agencies, crucial information
regarding the availability of important drug products and potential
alternate facilities is shared. Additionally, when quality problems,
manufacturing constraints, or limited production capacity trigger a
shortage, FDA and other regulatory authorities exchange information
regarding the issues identified or leading to the drug shortage. These
regulatory authorities then communicate, when necessary, with industry
to explore options that will best address patient needs.
questions of senator enzi
Question 1. What is the average and range for how long it takes to
get FDA approval for a manufacturing facility change? Please provide
specific examples where FDA met the 6-month goal.
Answer 1. The 6-month goal you reference relates to applications
for manufacturing facility changes that require prior approval. Under
the Prescription Drug User Fee Act (PDUFA), FDA committed to reviewing
90 percent of such supplements within 6 months. In fiscal year 2011,
FDA reviewed 98 percent of these supplements in 6 months, exceeding the
goal agreed to with industry.
FDA does not track the specific data you requested; however, the
time it takes for approval of a manufacturing facility change will
depend on several factors:
whether the new site has ever been inspected;
whether the new site has any quality problems that have
been identified;
location of the site, since an overseas inspection may
take longer to schedule due to current resource constraints;
whether the site makes similar drugs for the U.S. market;
whether the application for the change contains all of the
information needed to review the change (sometimes applications are
missing essential data).
Depending on the type of facility change, sometimes these changes
can be submitted as ``change being effected (CBE)-30 supplements,''
which means that 30 days after the submission, the firm can release the
new production from the new site unless FDA objects. A recent example
is a firm that needed a new site to increase supplies of a cancer drug
and two other drugs in shortage. We accepted the site addition as a
CBE-30 supplement because the firm was recently inspected, had no
quality concerns, and makes similar drugs for the U.S. market.
For drugs in shortage or for those with potential for shortage, FDA
works closely with the firms so that their applications and inspections
can be expedited.
Question 2. What percentage of manufacturing changes requires prior
approval by the FDA, and how does that compare with the EU?
Answer 2. FDA does not compare and/or tally the different types of
manufacturing changes in this manner. However, while not an exact
match, the requirements for filing manufacturing changes in the
European Union (EU) are similar to the FDA. Not all changes require
prior FDA approval (for example, the CBE-30 supplements discussed
above) and for those that do, any shortage related applications--
requiring prior approval or not--are expedited.
Question 3. Please identify the specific drug shortages you have
prevented and describe how you did it. How do you define a prevented
shortage?
Answer 3. FDA regularly intervenes in potential shortage situations
to help prevent or minimize shortages. Since October 31, 2011, when the
President issued his Executive order, FDA has worked closely with
manufacturers to prevent 114 drug shortages.
Of the drugs involved, 86 were manufactured by one firm.
The firm had lost the supplier that it used for material in the
container for these products. FDA worked closely with the firm to
quickly qualify and approve the new supplier and was able to prevent
shortages of the affected drugs.
The other 28 potential shortages involved different causes
and solutions:
Expedited Importation (two potential shortages):
Impending shortages of two drugs were averted by expediting the
importation of these approved drugs from outside the United
States. Both of these approved drugs are manufactured overseas
for the U.S. market. The U.S. inventory levels of these drugs
were insufficient to meet demand. With respect to one of those
drugs, there was an unanticipated increase in demand and the
manufacturer needed FDA's assistance to respond to that demand.
In the second case, a manufacturing delay caused a reduction in
supply. In both cases, FDA expedited the importation process so
that the drugs could be imported quickly to avoid a shortage.
Quality Problems (14 potential shortages): During the
same time period, FDA prevented 14 of these potential shortages
by rapidly addressing quality problems.
One potential shortage involved a firm that had a
slightly out-of-specification test result for their finished
drug product, but which did not represent significant risk for
patients. Therefore, FDA allowed the firm to ship the finished
product in inventory, while they corrected the problem for
future lots.
The second potential shortage resulted from a quality
issue with the glass used for syringes for use with a
particular drug. With guidance from the Agency, the firm was
able to do additional testing to remove all of the defective
syringes from the batch, before releasing the product to the
market.
The third potential shortage involved a quality
problem at the manufacturing site of a manufacturer that makes
sterile water used to dilute injectable drugs that are in a
powder formulation and that need to be reconstituted before
use. FDA determined that the quality issues did not have an
impact on the sterile water vials, so we permitted the firm to
release the drug with the sterile water vials while it worked
to correct the problems at the manufacturing facility.
The fourth potential shortage involved glass
particles in vials of a medically necessary drug. Working with
the Agency, the firm was able to show that pharmacists could
successfully filter the drug to remove the glass if they were
provided with adequate instructions, and that there would not
be a significant risk to patients from the filtered drug. FDA,
therefore, permitted the firm to release the drug with approved
instructions to filter the drug before use.
The remaining issues involved general systems
problems at manufacturing sites that could have had an impact
on the safety or quality of the drugs made in the facilities.
FDA worked closely with the firms, and they were able to take
additional steps to ensure that there were no significant risks
for patients due to the issues and that the drugs could be
released to avoid a shortage while the firms corrected the
problems.
Expedited Review of Supplements (nine potential
shortages): These involved firms that needed new facilities,
new suppliers, and/or changes to their product formulation
approved to avoid shortages. For example, one firm shut down
its original manufacturing site and opened a new facility. As
required by law, the firm submitted a ``supplement'' to its
application to seek FDA approval to manufacture the drug
product at the new facility. FDA expedited the inspection of
the facility and approval of the supplement, completing review,
inspection, and approval in 60 days--well in advance of the
PDUFA goal of 6 months--to avoid a shortage of the product.
Increased Production (three potential shortages):
With respect to the remaining three potential shortage
situations, FDA worked with alternative manufacturers of drugs
that were facing potential shortages to ramp up production to
cover the anticipated shortfall. In these situations, FDA
learned that the manufacturer in question was facing problems
(two involved quality problems and one involved a product
recall). As soon as FDA became aware of potential shortages of
the products in question, we initiated an outreach program and
worked with other manufacturers to avert the shortage.
Question 4. How many more notifications do you expect with the
change in the IFR, and how do you define an action that may precipitate
a shortage?
Answer 4. The Interim Final Rule (IFR) defined the term
``discontinuance'' in FDA's regulations to include both temporary and
permanent interruptions in the manufacturing of a drug product, if the
interruption could lead to a disruption in the supply of a product. The
IFR also clarified the definition of the term ``sole manufacturer'' to
refer to an applicant that is the only entity currently manufacturing a
drug product of a specific strength, dosage form, or route of
administration for sale in the United States, whether the product is
manufactured by the applicant or for the applicant under contract with
one or more different entities.
We anticipate an increase in notifications as a result of the IFR.
It is difficult to predict how many additional notifications will occur
with the change in the IFR; however, FDA is continuing to see an
increased number of notifications in 2012 from manufacturers, some of
which are a direct result of the IFR. The earlier FDA learns of a drug
shortage, the more effective FDA can be in helping to minimize the
impact on patients and health care professionals. For this reason,
legislation requiring early notification of impending supply
disruptions and discontinuation of drugs is a necessary tool in
mitigating or preventing shortages.
question of senator burr
Question. How many of the drugs recognized to be in shortage by the
FDA are drugs for which generic drug applications are currently pending
review by FDA? How many of these generic drug applications for drugs
currently experiencing a shortage, or that have experienced a shortage
over the past 5 years, have been pending review past the 6-month
statutory review timeframe?
Answer. We are not aware of any such applications. FDA's OGD
routinely monitors the queue of generic drug applications and takes
action when an application involves a product that may help prevent a
shortage or resolve one. With respect to new applications, OGD
regularly monitors all incoming applications to determine whether any
are for drugs that are facing a shortage situation. When we identify an
application relating to a drug in shortage, we designate the
application for expedited review and proceed with the review on that
basis. Notwithstanding expediting the review of applications for
generic products that may help alleviate a drug shortage, all
applications still must meet FDA's standard for approval.
There are reasons why a generic application associated with a
shortage drug could and would remain ``pending'' after a successful
review and inspection. In some cases, an application cannot be granted
final approval because the brand in shortage holds a valid patent that
the generic-application sponsor has chosen not to challenge. In that
case, FDA cannot approve the generic application until the patent
expires. Another issue that could affect the review time of a drug in
shortage is that it is not always possible to know ahead of time that a
product will be in short supply. As mentioned above, new applications
relating to drugs in shortage are designated for expedited review, but
it is possible that, prior to a particular drug going into shortage, an
already existing application would be pending with FDA and
appropriately proceeding through the queue. This may be why
applications appear to be pending for some period of time for drugs on
the shortage list, especially if the drug was recently added to the
shortage list.
questions of senator hatch
Question 1. How does the Office of Drug Shortage work with the
Office of Compliance? Do they consult one another before taking action
to relieve or mitigate shortages? Do they consult one another before
taking enforcement actions that could lead to shortages?
Answer 1. Staff in DSP and CDER/OC communicate almost on a daily
basis to discuss potential and actual shortages. The Office of Drug
Security, Integrity, and Recalls (ODSIR), Recalls Coordinating Branch
(RCB) within CDER/OC, is the liaison to DSP. CDER/OC reports weekly to
DSP a summary of all pending CGMP regulatory cases.
DSP is notified prior to a CGMP enforcement action, such as a
Warning Letter, seizure, and injunction, to help evaluate and/or
mitigate the impact such actions may have on medically necessary
products. In addition, if severe violations are identified during an
inspection, the investigators contact CDER/OC, who in turn, will notify
DSP of the violations and have a market impact evaluation done, unless
it is obvious that the products affected are not medically necessary.
The potential for shortage is evaluated along with the impact the
shortage would have on patients, as well as any risks involved with the
drugs in question. Decisions about specific regulatory compliance
actions take into account their potential impact on availability of
drugs, the medical necessity of those drugs in clinical practice, and
the level of risk involved with a firm's manufacturing and CGMP
deficiencies. In all cases, FDA works closely with the firm(s) to
minimize any risks while working to restore and maintain safe supplies.
Question 2. How many of the products in shortage were provided with
a warning letter from the Office of Compliance prior to being in
shortage? Of those products, how many warning letters were specifically
regarding the safety of the product sold on the market?
Answer 2. This information is not readily available, although we do
know that 43 percent of shortages are related to problems at the
manufacturing facility. We are conducting a comprehensive,
retrospective review to see if manufacturers of products in shortage
received a Warning Letter prior to the shortage. This is resource- and
time-intensive. We will share the outcome of our review once it is
available.
Question 3. Is it accurate to say that FDA inspects Contract
Manufacturing Organizations when the organization enters into a new
contract with an innovator to manufacture a particular product? If so,
would it not be better to provide a general quality system review when
requested by the CMO as opposed to waiting for the organization to
enter into a contract? It is my understanding that manufacturers prefer
contracting with CMOs that are already FDA-approved, many of which are
abroad. If the CMO is pre-approved prior to the contract, could that
not help to alleviate shortages by increasing U.S. manufacturing
capacity?
Answer 3. FDA inspections of manufacturing sites are prompted by
the site's registration with FDA, which is required when a site begins
to manufacture and distribute drugs and when a site is identified in a
new drug application. For drug manufacturing sites that are listed with
FDA, we perform routine inspections and, where appropriate, we will use
information from a routine inspection to waive a pre-approval
inspection before additional drugs are made at the facility. In other
words, we already consider a listed site's compliance with CGMPs--and
each CGMP inspection must cover the site's quality system--in deciding
whether to approve a manufacturing site for additional application drug
products. If we were to inspect before the time a contract is signed,
this could result in unnecessary site inspections, for example, if a
site is not, in fact, named in an application.
Question 4. Do you believe the proposal offered by the Generic
Pharmaceutical Association will have a significant impact on drug
shortages? Do you believe the FDA is already filling the role of the
third party entity they suggest establishing for purposes of
coordination? If not, how is it different?
Answer 4. FDA has met with Generic Pharmaceutical Association and
will continue to work with them on shortages. We recently heard some
initial information from them about their proposal, the Accelerated
Recovery Initiative. There is not yet enough information provided to
FDA to make a determination about the impact this proposal could have
on drug shortages.
[Whereupon, at 12:44 p.m., the hearing was adjourned.]