Executive Order Seeks to Curb Drug Shortages

 According to the Food and Drug Administration (FDA), despite successful prevention of nearly 137 shortages since 2010, drug shortages are increasing in frequency and severity.  As a result, patient care has been adversely affected, especially when the shortages are of drugs used in life-threatening conditions.  On October 31, 2011, President Obama signed an executive order instructing the FDA to get better advance warning from drug companies of impending supply problems, expedite regulatory reviews that can help prevent shortages, and examine whether potential shortages have led to price gouging.  In addition, the administration is increasing the FDA’s staff in its Drug Shortages Program to deal with drug shortages, from five people, now, to 11.

Most of the recent drug shortages have involved generic, sterile injectables; in 2010, these accounted for 74 percent of all reported drug shortages.  Among the approximately 80 manufacturers making generic injectables, about 40 experienced a shortage in 2010.  In a letter to industry, sent in conjunction with the President’s executive order, FDA Commissioner Margaret A. Hamburg wrote that “[a] significant number of drug shortages are the result of manufacturing quality problems.  In fact, in 2010, 54 percent of drug shortages were caused by manufacturing quality issues. ”

Although the FDA can oversee imports of drugs that are in short supply, it cannot regulate how much a company can make.  Manufacturers are not required to report shortages to the FDA.  However, sole-source manufacturers of certain “medically necessary” drugs that are life-supporting, life-sustaining, or intended for use in the prevention of a debilitating disease or condition must notify the agency at least six months prior to the date of discontinuation of the manufacture of such drugs.  Health and Human Services (HHS) Secretary Kathleen Sebelius commented that the executive order “advances” and “enhances” this FDA oversight on a growing shortage of important chemotherapy drugs, anesthetics and antibiotics, rather than granting new authority to the HHS or the FDA.

While the government cannot order drug companies to build more factories, advocates hope that the President’s executive order spurs congressional progress on bipartisan supported proposed legislation that would move beyond the “sole-source” notifications currently employed to requiring notifications for all supply disruptions or product discontinuations that could lead to shortages.  The proposed bills, however, have been stuck in Congress. 

Regardless, the impact of the executive order may be limited, because it lacks the authority of legislation, as well as the power of congressional funding.  The FDA noted in its report that although the production capacity of drug manufacturers is expanding slowly, the infrastructure requirements to produce these drugs safely were significant.  Companies operating at full capacity may not be able to manufacture a drug in shortage without dropping production of another product, potentially producing a secondary shortage.