Generic drug lobby details extent of US shortages, offers possible solutions

The Association for Accessible Medicines (AAM) has issued a white paper urging the US Food and Drug Administration (FDA) and other policymakers to adopt long-term sustainable solutions in addressing the current drug shortages. These solutions must address ensuring a sustainable generic market, increasing reserves of critical medicines, and reducing regulatory and manufacturing challenges for generic drugs, AAM said.

The white paper details the extent of the problem, some of the factors that are prompting drug shortages, and offers potential solutions.

Susan Reilly, director of communications for AAM, told Regulatory Focus that the group released the white paper to ensure that policymakers hear an industry perspective of the problem. “The context is that we recognize the significant concern about drug shortages and felt it important to make sure that the ‘on-the-ground’ industry perspective was reflected in the discussions. Further, we feel that while there are smaller, targeted ‘shortage’ ideas worth pursuing, it’s also important to understand that this is all occurring in the midst and because of a larger sustainability crisis for the industry,” she said.

The white paper states that “policymakers, healthcare providers, and manufacturers each play an important role in reducing drug shortages, and all should be cautious of short-term patches that create long-term barriers to robust generic competition and patient access to low-cost medicines.”

It urges the government to address the problems by “improving the long-term sustainability of the generic drug market for patient access and savings.”

The report notes that the generic drugs are “a highly competitive, low-margin industry. External measures including disruptions in the supply chain, regulatory delays, or changes in competitive intensity can make producing certain products financially unsustainable.”

Generic product discontinuations have numbered over 3,000 since 2010 and appear to be on the rise. In addition, drug shortages, which are “approaching record levels,” are causing thousands of patients to delay getting necessary treatments for cancer and other life-threatening diseases, the paper noted, referencing a recent New York Times article.

FDA officials also reported an increase in drug shortages, going from 41 in 2021 to 49 in 2022. (RELATED: FDA saw uptick in drug shortages in 2022, Regulatory Focus 8 June 2023)

Drug shortages are caused by the growing “fragility” of the generic drug market, prompted by pricing factors that “undermine low-cost generic manufacturing” and leave generic drugs vulnerable to shortage.

Other factors that undermine the sustainability of the generic market include insufficient supply of raw materials, including active pharmaceutical ingredients (APIs), and inadequate supply of glass vials, stoppers, and IV bags. In addition, manufacturers may have difficulty in obtaining an adequate supply of certain APIs due to quotas imposed by the Drug Enforcement Administration (DEA).

Other challenges include natural disasters, which can cause manufacturing facilities to shut down. The soon to be implemented Drug Supply Chain Security Act (DSCSA) poses yet another challenge. The law mandates a 27 November deadline for manufacturers to have an interoperable system for tracing all drug products. The report states that “it is unknown how many generic manufacturers are prepared for this, but some manufacturers will likely not be fully ready for this deadline.”

Recommendations

AAM recommends that any approaches to solve the problem should ensure a sustainable market for generic drugs, increasing the reserves of critical medicines, and removing regulatory barriers.

In the first area, the paper recommends the following actions:

The Centers for Medicare & Medicaid Services (CMS) align its Medicaid Inflation Penalty with the inflation penalty provisions of the Inflation Reduction Act (IRA) to exempt products that are in shortage or at risk of shortage from the penalty;
Extend the IRA’s drug shortage exemptions to drugs that are transitioning out of shortage;
FDA should enable generic manufacturers to receive key quantitative and qualitative formulation information (e.g., Q1/Q2) from FDA to speed new generics to market; and
The Department of Health and Human Services (HHS) and the Centers for Medicare & Medicaid Services (CMS) should ensure that Medicare drug plans cover new generics and biosimilars.

To address increasing the reserves of critical medicines, the report recommends:

FDA should update the Essential Medicines List and adapt it to support a drug shortage stockpile and reserve capacity program;
HHS use its Strategic National Stockpile (SNS) as a model for a reserve capacity supply program;
Incentivize multi-year fixed-price purchasing contracts for generic drugs to increase predictability for manufacturers.

To reduce regulatory and manufacturing challenges, the report recommends:

FDA’s drug shortage staff should be given the authority to engage with the agency’s Center for Drug Evaluation and Research (CDER) and the Office of Regulatory Affairs (ORA) staff during inspection planning prior to the actual inspection “to work with manufacturers and build on their track record of successfully mitigating shortages;”
FDA should enhance its use of alternate inspection tools for drugs in shortage if inspection status is the only remaining barrier to approval;
FDA should consider the impact of draft and final guidance to ensure these policies do not contribute to drug shortages or discourage applications for products in shortage.

AAM paper

Generic drug lobby details extent of US shortages, offers possible solutions

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