Articulo 2
Articulo 2
Articulo 2
PANDEMIC
AND THE
SUPPLY
Addressing Gaps
CHAIN in Pharmaceutical
Production and
Distribution
Contributors (in alphabetical order)
6 Policy Recommendations
1. FDA should timely disclose and mitigate demand-driven and local-level shortages
3. To strengthen the global supply chain, the FDA should establish a database of
approved manufacturers of active pharmaceutical ingredients
4. To expand production capacity, the FDA should expand the current mutual recognition
agreement between the United States and Europe.
6. The federal government should stand up a comprehensive effort to assess and manage
the U.S. pharmaceutical supply chain.
7. When necessary to mitigate shortages, the Department of Health and Human Services
should allow additional manufacturers to produce patented medications
11 References
i
SUMMARY
Provoking both unprecedented shifts in demand and new uncertainties
in production and distribution of essential medications, the COVID-19
pandemic has revealed the fragility of the U.S. drug supply in a public
health crisis. Documented shortages in recent months have included
medications used to treat COVID-19 itself, medications used in intensive
care, and medications for related conditions. These shortages point to
serious vulnerabilities in the pharmaceutical supply chain that can
compromise the response to future crises as well as new waves of the
current epidemic that may be yet to come.
POLICY PROBLEMS
PROBLEM 1: PROBLEM 2:
Unexpected increases in Disruption of production of critical
demand for critical medications medications
The COVID-19 pandemic has led to shortages of The high demand driven by the COVID-19 emer-
drug products needed to directly mitigate the gency has exhausted existing2 inventories of drug
infection, to support life, or to control related con- products and raw materials. Most manufacturing
ditions (Table 1). While most non-crisis shortages companies produce enough drugs and drug ingre-
originate in problems with a drug’s production, dients to meet the needs of their clients based on
drug shortages that have been triggered by the predetermined projections3, including manufactur-
COVID-19 epidemic have been mostly driven by ing quotas for sedatives and hypnotics issued by
increases in demand for certain categories of the Drug Enforcement Agency (DEA). The corona-
pharmaceuticals. Such demand increases were virus pandemic has expanded demand and lasted
unexpected and of great magnitude, exceeding the longer4 than anticipated by most drug
capacity of manufacturers of maintaining adequate manufacturers, and therefore drug inventories
supply levels of these pharmaceuticals. and manufacturing quotas have been depleted
Drug shortages have been plaguing the US much faster than manufacturers and federal
market in the last decade, and low-cost generics agencies could predict.
have been the drugs most at risk.1 At the onset of The United States imports many finished drug
the HHS-declared emergency status on January products and raw materials required for drug
31, 2020, there were over one hundred drugs in manufacture from Europe, India and China5,
nationwide shortage according to the FDA. Most including active pharmaceutical ingredients
drugs needed to treat Covid-19 patients - life-sup- (APIs). The shortages associated with the
porting drugs such as vasopressors, sedatives, COVID-19 pandemic have affected both active
injectable solutions, and others - are generic, low- pharmaceutical ingredients6 and finished
cost products that were already at risk of shortag- pharmaceutical products.
es or had experienced shortages before the start China is a major source of active
of the epidemic. pharmaceutical ingredients7 for antibiotics,
From the perspective of drug shortages, the antihypertensives and antivirals. Due to the
Covid-19 epidemic has represented an acute pandemic8, many factories in China had to close
stressor on an ongoing problem, prompted by the temporarily8, leading to a halt in production5 of
unexpected increase in demand. active pharmaceutical ingredients and finished
products. Some of these factories have since
reopened8 but they are understaffed6 due to
government instituted lock-downs and
quarantined employees.6 Lock-downs have also
led to shortage of raw materials6 needed for
manu-facturing APIs because some suppliers
have not resumed work.8 This has disrupted the
production of certain drugs dispensed in the Unit.
Beyond shutdowns, travel bans9 complicate
medication production. These bans have delayed
2
Delayed regulatory oversight of supplies available to treat their own people. India,
users of the supply chain—hospitals and group well as existing contractual agreements that
purchasing organizations—at the local and state guarantee certain levels of supply to purchasers
level is needed. across the country.
In late March, a letter sent20 to the Drug n Pharmaceutical wholesalers do not report
Enforce-ment Administration (DEA) by several inventory levels to the FDA, HHS, or any fed-
professional organizations20 informing of eral agency, and it is not possible to ascertain
shortages experienced by hospitals illustrated this whether scarce resources are being distributed
problem. Information from Group Purchasing equitably and prioritizing areas and facilities of
Organizations have also illustrated the regional higher demand.
profile of shortages. For example, one drug,
Existing contracts with a particular group purchas-
norepinephrine, has been associated with
ing organization or wholesaler may limit hospitals
increased mortality when in shortage21, and was
and pharmacies’ attempts to procure drugs in
reported as a shortage early in the pandemic. But,
shortage. For example, hospitals participating in
though hospitals reported increased demand and
HRSA’s 340B Drug Pricing Program are generally
shortage of norepinephrine well into July22, this
prohibited from obtaining “covered outpatient
drug was never indicated on the FDA’s shortage
drugs through a group purchasing organization
list—limiting the steps that could be taken in
or other group purchasing arrangement.”24 While
response.
HRSA has waived this requirement during the
pandemic, clinics and hospitals may not have
PROBLEM 6: readily available mechanisms to access supplies
Inadequate supply chain planning or transport medi-cations to other facilities.
and management Inadequate supply chain management can
indirectly lead to shortages. Without confidence
COVID-19 has revealed that the US does not have in a national plan, institutions may opt to stockpile
a system to coordinate and direct sharing of large quantities of certain drugs in the anticipation
medications across institutions in different of a shortage and may be hesitant to divert their
regions. Rather, the distribution of limited medical supplies to facilities with greater need.
supplies has relied largely on pharmaceutical
wholesalers during the current pandemic.
Limitations of this approach include:
n Guidance on production of compounded drugs. of drug applications that involve domestic new
The FDA issued a temporary policy guidance37 drug manufacturing technologies that are likely to
to temporarily permit outsourcing facilities that prevent and resolve a drug shortage and/or help
are part of the global pharmaceutical supply maintain an adequate supply of critical medica-
chain to compound certain drug products for tions for national emergencies. This bill would also
hospi-talized COVID-19 patients, provided the designate eligible academic research institutions
corre-sponding FDA-approved drugs appear on as National Centers of Excellence for Advanced
the FDA drug shortages’ list38 and have been Pharmaceutical manufacturing to promote re-
reported by hospitals as drugs in shortage. search and development of active pharmaceutical
ingredients in the U.S. S.3162 - Affordable Drug
n Guidance on reporting manufacturing inter-
Manufacturing Act of 201844 would create an
ruptions. FDA issued a guidance39 under
Office of Drug Manufacturing within HHS that
Section 506C of the Federal Food, Drug and
would either manufacture generic medications
Cosmetic Act to ensure that applicants and
itself or contract with others when it determined
drug manu-facturers report all interruptions
that (1) a drug is not readily available from existing
and permanent discontinuances in the
suppliers, (2) HHS manufacture would facilitate
manufacturing of any drug materials that will
market entry of other generics, or (3) such actions
eventually disrupt do-mestic drug production
are necessary for the Office to carry out its duties.
six months in advance. This policy reflects
provisions established in the CARES Act
passed in March 2020.
Looking ahead, FDA has endorsed1 several addi-
tional proposals. These include a plan to provide a
quality rating for manufacturers that would
reflect the risk of a shortage and a proposal to
lengthen expiry dates. Other proposals in
Congress include a requirement that FDA
maintain shortage lists by region40, permitting
importation41 in the setting of a likely shortage,
and incentivizing new manufacturing
technologies42 less likely to result in shortages.
Finally, some proposals focus on incentivizing43
domestic manufacturing through tax breaks and
forming a new office within HHS44 to support do-
mestic manufacturing of generic drugs.
Multiple bills have been introduced in Congress
to incentivize domestic production of pharmaceu-
ticals. H.R. 6930 - MADE in America Act of 202043
establishes tax incentives to increase domestic
pharmaceutical and medical device production.
H.R.6708 - Securing America’s Medicine Cabinet
Act of 202042 seeks to expedite the approval
6
POLICY RECOMMENDATIONS
RECOMMENDATION 1: stakeholders have questioned48 the legal authority
FDA should timely disclose and mitigate of the agency to require domestic and foreign
demand-driven and local-level shortages manufacturers to report the information needed to
In the event of a public health emergency declared calculate quality metrics.
by the Department of Health and Human Services, To resolve this issue, Congress should autho-
the FDA should expand its drug shortage surveil- rize the FDA to develop, publish, and implement
lance system to capture information on difficulties metrics that accurately reflect the quality of drugs
procuring drugs provided by drug purchasers such produced at manufacturing facilities.
as hospitals, pharmacies, group purchasing organi- The FDA will then be able to provide information
zations, and wholesalers. about the risk of shortages coming from manu-
Adding a drug to the shortage list would allow facturing to stakeholders such as drug compa-
the FDA to more quickly deploy the strategies to nies, wholesalers and hospitals who purchase
increase manufacturing that it typically reserves drug products. Purchasers will have the option
to drugs that it has incorporated in the shortage to choose from manufacturers that have more
list. Such strategies include expedited review of resilient production capabilities, and competitor
manufacturing changes, assistance in establish- manufacturers may choose to enter the market
ing new lines of production, extended expiration if all available products have poor quality ratings.
dating, or redirection of products from outside of A quality metrics system will create incentives for
U.S. markets. manufacturing facilities to self-correct, and lead
to improved product quality thus mitigating drug
shortages.
RECOMMENDATION 2:
To strengthen pharmaceutical produc-
tion, Congress should authorize FDA to RECOMMENDATION 3:
create and publish quality metrics for To strengthen the global supply chain,
the manufacturing process. the FDA should establish a database of
The FDA has proposed the use of publicly avail- approved manufacturers of active
able quality metrics45 to address drugs shortages pharmaceutical ingredients
that stem from poor manufacturing practices. To When a drug manufacturer relies on another com-
further this agenda, the FDA issued a guidance46 pany to produce an API, the FDA must approve
in 2016 on how quality metrics could be used for the API source. This is a lengthy and costly process
evaluation of facilities. The agency also asked for often involving FDA inspections of the API manu-
funding for development of quality metrics to facturer’s facilities. In a public health emergency
improve oversight in next generation sequencing where generic drugs are in shortage, drug man-
(diagnostics) in their FY 2020 financial budget.47 ufacturers must often find alternative sources of
At present, FDA is currently implementing a APIs quickly.
voluntary industry reporting system46 of select- One option is to approve a new source for an
ed quality metrics. However, the voluntary basis API. However, a long review process may delay the
of this system constitutes a weakness. Industry feasibility of this alternative. An alternative would
be to find another existing manufacturer. But no
7
database currently exists to identify approved API the U.S. market for a cheaper cost to the feder-
sources for potential generic drug manufacturers. al agency as well as a faster turnaround time for
An FDA database would accelerate the process review and approval of manufacturing changes both
of finding alternative suppliers that meet agency in regular times and in the event of a public health
requirements. crisis.
RECOMMENDATION 4: RECOMMENDATION 5:
To expand production capacity, FDA Congress should further incentivize
should expand the current mutual domestic production of essential
recognition agreement between the pharmaceuticals
United States and Europe. Beyond actions to date taken by the administration,
The mutual recognition agreement between the Congress can establish a legislative framework to
United States and Europe, which was finalized in describe, define, and sustain all activities to in-
2017, allows the FDA and European regulators to crease domestic production of critical medications
recognize each other’s surveillance inspections of over time. Such a framework can focus investments
manufacturing facilities. However, the agreement and efforts where they will produce the greatest
only covers manufacturing facilities in the United benefit, while maintaining a robust global market in
States and Europe. With the concurrence of the pharmaceuticals. A proposal should:
Office of the United States Trade Representative, n Specify the characteristics of eligible drugs, appli-
the agreement should be revised to cover inspec- cable circumstances, and eligible institutions for
tions of Asian manufacturing facilities conducted contracts for domestic manufacturers. Consider-
by either the FDA or European regulators, and to ations might include the potential for shortage in
cover inspections of manufacturing plants that an emergency.
produce active pharmaceutical ingredients as well n Empowering the FDA to require that manufactur-
as pre-approval inspections of finished products. ers demonstrate that they have and maintain a
This expansion is very important given the high certain level of stockpile of APIs when
reliance on European and Asian countries to pro- approving a new drug.
duce drugs and active pharmaceutical ingredients n Empowering the FDA to expedite approvals of
for the US market. This cooperation would increase new drugs or manufacturing changes of existing
the efficiency of FDA’s oversight of manufacturing drugs when the manufacturing process strength-
facilities because it would help the FDA allocate ens domestic manufacturing of key medications.
resources towards inspecting facilities that have
n Empowering the FDA to track and publicly disclose
not been inspected and approved by European
the countries involved in the manufacturing of
regulators, including in Asia.
each drug commercialized in the United States,
In addition, mutual recognition agreements
incuding its active ingredients and excipients.
could be sought with other countries with ad-
vanced pharmaceutical markets such as Japan
and Australia. The result would be having a greater
number of facilities able to supply medications for
8
RECOMMENDATION 6: RECOMMENDATION 7:
The federal government should stand When necessary to mitigate shortages,
up a comprehensive effort to assess and the Department of Health and Human
manage the U.S. pharmaceutical supply Services should allow additional
chain. manufacturers to produce patented
Supply chain management in an emergency medications
includes the assessment of available supplies, the Two statutes permit the government to make
ability to purchase additional supplies into and copies of patented medications in shortage. The
distribute from a government stockpile, and the federal government should adopt a policy to use
ability to allocate supplies across the market in these laws as needed in a crisis, if companies
an emergency. These capabilities can be built to cannot themselves produce sufficient quantities to
address serious drug shortages of all kinds and meet the demand.
mobilized broadly during emergencies. Existing 28 USC § 1498. This statute allows the federal
emergency authority exists in the Defense Pro- government to permit additional manufacturers to
duction Act and other laws, and Congress could produce patented drugs without approval from the
broaden this authority for use for other critical patent holder as long as the patent holder is given
shortages. fair compensation.
During an emergency, a comprehensive supply The Bayh-Dole Act. This statute provides the U.S.
chain effort would involve collecting information government “march-in” rights that allow a federal
about available stocks from the manufacturer to agency, in special circumstances, to require the
the end user, contracting for additional supplies patent owner to grant a “nonexclusive, partially
(utilizing the Defense Procurement Act where exclusive, or exclusive license in any field of use to
necessary) for a national supply, and establishing a a responsible applicant or applicants.” The Bayh-
distribution system based on levels of need. Such Dole Act can be invoked if the patent holder was
systems should be built in non-crisis times, such considered to be failing at taking “effective steps
that they can be quickly and efficiently deployed in to achieve practical application of the subject
the event of a public health emergency. invention.”
FDA should have the authority to declare a
critical drug shortage. With this declaration, an
agency empowered to manage the supply chain
should be able to compel information about stocks
of key medicines, and, where necessary for public
health, redirect supplies to where most needed.
The agency’s authority should include creating a
pathway for sharing of supplies between end users,
which should supersede contractual restrictions
and other hindrances.
The use of a system for specific critical drug
shortages outside of an emergency will support a
state of readiness for a major national emergency.
9
TABLE FDA Reported Drug Shortages during the COVID-19 pandemic. (Jan 31-present)
Name Therapeutic Category Day Posted COVID Relation
Dimercaprol (Bal in Oil) Injection USP Hematology; Other 2020-05-11 Relation Unknown
continued
10
Notes: COVID treatment represents a drug that can be used in the direct treatment of COVID-19 infection;
Indirect represents a drug whose shortage has been described as triggered or related to the COVID-19
pandemic, though not due to the direct treatment of COVID-19 infection; ICU Care represents a drug
commonly used in treatment of critically ill patients, such as patients with severe COVID-19 illness; and
Relation Unknown represents drugs that were listed by the FDA on the shortage list during the COVID-19
pandemic, but which lack clear evidence attributing this shortage to the pandemic itself.
11
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