Pew Finds Quality Issues Not the Only Cause of Drug Shortages

Drug shortages present major clinical and operational challenges to healthcare facilities in the United States.

With more than 450 documented shortages over a 3-year period between 2011 and 2014—mostly in the area of sterile injectibles—thousands of patients received less-than-optimal care, and hospitals were forced to spend millions to find emergency alternatives to preferred treatments. And the problem, according to a report from the Government Accountability Office, may be getting worse.

Now, research from the Pew Charitable Trusts offers insights—from the perspective of pharmaceutical executives—as to why these shortages occur and potential solutions to prevent them from happening in the future. The 10 companies interviewed for the Pew report, released January 10, 2017, cited “market withdrawals”—in which companies decide to stop manufacturing specific products due to quality issues, the introduction of a competitive product, and/or declining profitability—as a major factor leading to shortages, along with problems in “supply-chain design” and “lack of accurate information” regarding future demand for specific products.

“Pew has worked for years on pharmaceutical manufacturing quality issues, and our research on drug shortages is an outgrowth of that work,” Elizabeth Jungman, Director, Public Health Programs, The Pew Charitable Trusts told Contagion^®. “Quality issues are often cited as a primary contributor to shortages, but they are not the only forces at play. We undertook this research because the market dimensions and investments that influence shortages have not been as thoroughly explored. Reading the report may give clinicians a greater appreciation of the complex nature of drug shortages. As the report details, a wide variety of factors go into companies’ decisions about building capacity and redundancy into their production systems.”

According to Ms. Jungman, although the US Food and Drug Administration (FDA) Safety and Innovation Act of 2012 “strengthened FDA’s ability to respond to and resolve drug shortages… [and] improved the situation, drug shortages continue to affect the ability of patients to access essential medicines.” Notably, the companies interviewed told Pew that improvements were needed in manufacturer “supply chains” and in planning for estimated product demand that coordinated sales, inventory management, and production. Several companies reported that they had expanded manufacturing capacity for certain products—based on manufacturing complexity, profit margin, and the hazards associated with a potential shortage (eg, poor patient outcomes)—but that “not all products received the same level of manufacturing redundancies.” They cited a lack of information on future demand—“especially [for] low-volume, low-margin products” for which they were reluctant to increase capacity due to possible poor return on investment—as a significant problem in this area, and suggested that they “needed incentives, either in the form of guaranteed-volume contracts or the ability to retain contracts,” to protect them financially when making investments into manufacturing capacity.

The companies interviewed also indicated that “regulatory challenges”—particularly for older (read: less profitable) products—served as a disincentive to invest. Older drug products, of course, lose their patent exclusivity, allowing generics to enter the market and reduce returns for manufacturers.

“In general, the report confirms and details that while quality issues are important, understanding the factors driving drug shortages requires understanding a host of other complex and interrelated issues,” said Ms. Jungman. For example, she added, “the companies noted that even the existence of multiple suppliers does not negate the potential of a shortage, since each manufacturer could experience difficulties in ramping up operations when a competitor withdrew from the market, [and that they] may be less likely to invest in redundancies such as dual sourcing and backup manufacturing if there are multiple replacements on the market.”

Brian P. Dunleavy is a medical writer and editor based in New York. His work has appeared in numerous healthcare-related publications. He is the former editor of Infectious Disease Special Edition.