Posted 29 January 2016
By Zachary Brennan
The World Health Organization (WHO) released a new report this week on ways to address global drug shortages, which are increasing in frequency, particularly for old, off-patent or difficult to formulate treatments.
Difficulties in acquiring raw materials, manufacturing problems, barriers to competition, business decisions, the impact of new technologies, expensive medicines and fragmented markets were all listed as reasons for new drug shortages based on studies in several countries.
WHO is quick to note that, “There is poor availability and quality of data on actual demand; inadequate management practices in procurement and the supply chain, combined with large tender contracts that do not sufficiently define quality standards but whose sole emphasis is on obtaining the lowest prices; and too small profit margins for manufacturers – all these factors may lead to shortages.”
In particular, injectable products are at risk of shortages, WHO says, noting the example of benzathine penicillin, which has been in short supply for several years because of problems with manufacturing, lack of consistent demand and a decrease in indications for its use, as well as a relatively low price.
“At the global level, a set of essential medicines could be identified for which shortages have been reported or there exists a risk of shortages, and an international agreement about ensuring continuity of manufacturing and supply could be investigated,” WHO says.
However, several important questions still have to be addressed, WHO says, including: Could a multi-year global advance purchase commitment be worked out? Would an agreed global minimum price that is commercially attractive help to keep a medicine on the market? How would such a price be set?
WHO also points to the idea of using pricing interventions (i.e., placing minimum prices on certain drugs) to reduce shortages, which may raise some eyebrows in the US and EU, where the pricing discussion has centered on how to reduce drug prices.
The organization notes the example of Australia, where manufacturers can request a higher price for products with limited markets.
And in the US, where prices of oncology products decreased following the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, WHO says “that setting minimum prices for some products in order to encourage continuity of supply would improve supply of oncology products.”
Ezekiel Emanuel, an oncologist and former White House advisor, recommended such minimum prices back in 2011 in a New York Timesop-ed, noting, “Because the 2003 act effectively limits drug price increases, it prevents this from happening. The low profit margins mean that manufacturers face a hard choice: lose money producing a lifesaving drug or switch limited production capacity to a more lucrative drug.”
Erin Fox, PharmD, director of the Drug Information Service at the University of Utah, who testified before senators on drug prices, told Focus: “The real reason we had an oncology product shortage was a single factory in Irvine, California (Teva) closed very unexpectedly without telling FDA - this happened while quality issues were ongoing at Hospira and Bedford, and it resulted in a tremendous spike in oncology shortages.”
[Editor’s note: Focus has previously delved into the issue of cancer drug prices with op-eds from industry and academia.]
And although those price minimum limits may not take effect anytime soon or be regarded favorably by US politicians, WHO says that encouraging generic manufacturers to produce particular medicines of interest “has shown enormous benefits in lowering prices and increasing affordability.”
“Too low prices, however, may drive manufacturers out of the market, and higher prices of alternative newer products may result in them being preferentially supplied, with a decline in market for vital but cheaper medicines,” WHO says. “Changes in payment structures or systems that provide perverse incentives to use expensive products may also lead to shortages of low-priced alternative treatments.”
Fox commended the WHO’s plan to shore up overall global manufacturing and quality as “quality issues with manufacturing are the main cause of drug shortages in the US [as FDA notes on its website].”
FDA’s CDER Director Janet Woodcock also explained to senators yesterday that the pharmaceutical industry’s antiquated manufacturing systems need to be upgraded to more continuous operations.
The use of multiple reporting systems for drug shortages, which exist within specialized programs in some countries and at the national level in high-income countries, was also cited by WHO as a means of reducing shortages.
FDA maintains a constantly-updated list of such shortages on its website, as does the European Medicines Agency, and manufacturers in the US and EU are obliged to inform health authorities in advance of possible future shortages.
“A combination of notification systems and systematic regulatory and reimbursement responses may help at a health-system level, together with a systematic approach to the clinical use of products in short supply,” WHO advises. “It is not clear yet whether mandatory or voluntary notification works best and who should do the notifying – let alone considerations on whether these processes can be applied in countries with weak regulation and information systems.”
On the pediatric drug shortage front, WHO has created a Model List of Essential Medicines for Children (most recently updated in April 2015), set global standards for formulations of medicines for children, identified clinical trials in children through its International Clinical Trials Registry Platform, publicized information about prices of some pediatric drugs, and identified missing products, such as fixed-dose combination medicines containing the appropriate dose of the components for tuberculosis in children.
WHO also unveiled several options to reduce shortages, notably a new global agreement on actions to diminish specific shortages; expansion of regulatory collaboration on essential medicines susceptible to shortages; centralized negotiation to preserve essential medicines susceptible to shortages including definition of minimum volume and fair price; and work with partners to ensure appropriate demand for medicines for children, including medicines for uncommon diseases.
Addressing the global shortages of medicines, and the safety and accessibility of children’s medication
New York Times Story on Drug Shortages