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FDA Statement

Statement on FDA’s new report regarding root causes and potential solutions to drug shortages

For Immediate Release:
Statement From:
Norman E. "Ned" Sharpless, MD
Acting Commissioner of Food and Drugs - Food and Drug Administration

One of the U.S. Food and Drug Administration’s top priorities is to ensure that Americans have access to safe and effective medicines. Sometimes, for a number of reasons, shortages of certain medicines occur and the FDA works immediately with our public health partners and industry to minimize their impact on patients and restore the availability of these drugs. A shortage of just one critical drug can have a major impact on a patient’s health, which underscores why government and industry need to act quickly to prevent future shortages.

Despite public- and private-sector efforts to prevent and mitigate drug shortages, they continue to occur and persist. So, at the request of Congress last year, the FDA convened an inter-agency Drug Shortages Task Force to study the problem, determine the root causes of drug shortages, and make recommendations for enduring solutions. This effort was designed to help address the number of drug shortages that we continue to experience, which place a serious burden on patients and providers who need access to these medically necessary products.

To understand forces causing drug shortages, the Task Force commissioned a team of FDA economists and scientists to analyze drugs that went into shortage from 2013 to 2017. The agency also invited public participation by hosting a public meeting, opening a docket to receive public comments, and inviting stakeholders from industry, academia, and the medical provider and patient communities to a series of listening sessions to provide insight into the causes of drug shortages and identify potential solutions.

Today, on behalf of the inter-agency Task Force, the FDA issued a report, “Drug Shortages: Root Causes and Potential Solutions,” that attempts to identify root causes and offer recommendations for government and industry based on insights gleaned from stakeholders in the private and public sectors. These recommendations are intended to help prevent and mitigate future drug shortages. The report focuses on human drugs, but many of the same concerns apply to veterinary medicines used to treat service, companion, and food-producing animals.

The Task Force found that the number of ongoing drug shortages has been rising, and that their impact is likely underappreciated. The Task Force analyzed 163 drugs that went into shortage from 2013 to 2017 and compared these medicines to similar drugs that did not go into shortage. Shortage drugs were more likely to be relatively low-price and financially unattractive drugs and were more likely to be sterile injectables. Shortages often occurred as a result of disruption in supply due to a variety of factors. Importantly, prices rarely rose after shortages began, and during shortages, production typically did not increase enough to restore supply to pre-shortage levels. Many manufacturers reported discontinuing the production of drugs before a shortage for commercial reasons (e.g., loss of profitability). These results suggest a broken marketplace, where scarcity of drugs in shortage or at risk for shortage does not result in the price increases predicted by basic economic principles. While there are no easy solutions to the problems identified, and there is no single cause of drug shortages, the Task Force offers three key recommendations to address the root causes of shortages.

First, we recommend taking steps to increase understanding of the impacts of drug shortages and companies’ contracting practices that may contribute to them. Currently, there is little private- or public-sector effort to collect and analyze comprehensive information to characterize shortages, quantify their effects, or closely observe the contracting practices that may be driving them. This information would help improve stakeholders’ understanding of the impact shortages have on the Nation’s health care and support private- and public-sector strategies to prevent or mitigate them in the future. Our report encourages more systematic and transparent study of current contracting practices to support development of model contracts designed to promote reliable access to safe, effective, and affordable drugs.

Second, we support the idea of developing a system to measure and rate a facility’s quality management maturity. The rating would evaluate the robustness of a manufacturing facility’s quality system and its ability to deliver high-quality products reliably and without disruption. Historically, many pharmaceutical manufacturing firms have focused their efforts on compliance with Current Good Manufacturing Practices (CGMPs), which set a minimum threshold that companies must achieve to be allowed to supply the U.S. marketplace. They do not include more advanced levels of quality management. As outlined in an FDA Voices perspective piece issued last week, a rating system could be used to inform purchasers, group purchasing organizations (GPOs), and consumers about the state of, and commitment to, the quality management maturity of the manufacturing facility making the drugs they are buying. This effort would introduce transparency into the market, and provide companies committed to quality management maturity with a competitive advantage, potentially enabling them to obtain sustainable prices as well as grow market share.

Third, we recommend considering new contracting approaches that help ensure a reliable supply of drugs. This may include providing financial incentives to make certain that manufacturers, especially of older generic drugs, earn sustainable returns on their products. The combination of more complete information about contracting practices and greater transparency of the quality management maturity of specific manufacturing sites would enable payers, purchasers, and GPOs to consider new contracting approaches aimed at making sure there is a reliable supply of medically important drugs. This could be done through several different mechanisms, such as paying higher prices for drugs manufactured at top-rated facilities, requiring a certain quality maturity rating as a condition of contracting, or guaranteeing purchase of a set volume of products from sites achieving a certain quality maturity rating.

The report also describes several legislative proposals and planned FDA initiatives that focus primarily on enabling the agency to help prevent supply disruptions that lead to shortages. These include new requests in the President’s FY 2020 budget and new guidances that the agency intends to release by the end of calendar year 2019. We have outlined these specific actions in the report, and they are designed to mitigate and prevent drug shortages nationwide.

We also feel that international action is necessary. The International Council for Harmonisation (ICH) is finalizing a guideline, “ICH Guideline Q12: Technical and Regulatory Considerations for Pharmaceutical Product Lifecycle Management,” which provides opportunities for regulatory flexibility in making post-approval changes to the product or its manufacturing process. Global implementation of this guideline, once finalized, could facilitate the efforts of manufacturers for the international market who wish to modernize processes and equipment to avoid potential disruptions, but have found the regulatory landscapes of different countries to pose a financial burden.

Given the potential scale of impacts from drug shortages, and the fact that these impacts have continually been underestimated, it is likely that drug shortages will continue to persist absent major changes to this marketplace. The root causes of shortages involve economic factors that are driven by both private- and public-sector decision-making. This means that the types of enduring solutions proposed in the report will require multi-stakeholder efforts and rethinking business practices throughout all sectors of the health care system. It will also require a fuller characterization of the true costs of shortages and more comprehensive and reliable analysis of the effects shortages have on patients and the health care system.

We hope that the recommendations set forth in this report will help to set a framework that all stakeholders can assess and implement as we work together to further mitigate the public health impact that drug shortages have on American consumers. In the meantime, the FDA’s employees remain committed to working behind-the-scenes to anticipate and help mitigate shortages and make sure that patients have access to the drugs they need. The FDA will continue to report regularly on the progress of our Task Force and keep the public informed about current drug shortages and our efforts to prevent and mitigate new ones.

The FDA, an agency within the U.S. Department of Health and Human Services, protects the public health by assuring the safety, effectiveness, and security of human and veterinary drugs, vaccines and other biological products for human use, and medical devices. The agency also is responsible for the safety and security of our nation’s food supply, cosmetics, dietary supplements, products that give off electronic radiation, and for regulating tobacco products.

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