Drug Shortages: How Should the Industry Address?

By Patricia Van Arnum - DCAT Editorial Director

January 29, 2020

The European Federation of Pharmaceutical Industries and Associations (EFPIA), which represents research-based innovator companies, put out a position paper on how to best address drug shortages. This follows reports by both the European Medicines Agency (EMA) and the US Food and Drug Administration (FDA) What solutions are being recommended?

Inside drug shortages

Ways to combat drug shortages has been a priority in the pharmaceutical industry and reached on inflection point in 2011 and 2012 when the number of drug shortages, particularly generic sterile injectable drugs, rose, causing regulators to take action to better oversee and monitor potential drug shortages. In 2011, the US Food and Drug Administration (FDA) reported 251 drug shortages in the US, of which 183, or 73%, were for injectable drugs. In 2012, the total number of drug shortages declined to 117, with 84, or 72% of those shortages for injectable drugs. A major reason for these shortages, as reported by the FDA, was quality/manufacturing issues, which accounted for 37% of the drug shortages in 2012, with injectable drugs accounting for the majority of these shortages.

While the level of drug shortages has declined, both the FDA and the EMA continue to address the issue with several recent policy recommendations. In October 2019, the FDA issued a report on the root causes and potential solutions for drug shortages, including proposing a new system to measure and rate the quality management maturity of manufacturing facilities, one of three recommendations from the FDA. The FDA further made recommendations for new contracting approaches to ensure a reliable supply of drugs, including providing financial incentives to make certain that manufacturers, especially of older generic drugs, earn sustainable returns on their products. The report was the work of the FDA’s Drug Shortages Task Force, an inter-agency task force, convened at the request of the US Congress, to study the problem of drug shortages, determine their root causes, and make recommendations for solutions to resolve these issues.

Last year (July 2019), the EMA issued two guidance documents, respectively to pharmaceutical companies and national regulators in the European Union (EU), to develop and coordinate actions to better prevent, identify, manage, and communicate drug shortages. The guidance documents were two key deliverables of a task force established by EU regulators that had undergone consultation with stakeholder groups, including at a multi-stakeholder workshop in November 2018. The task force was set up by the EMA and the Heads of Medicines Agencies (HMA), with representatives from the European Commission and national competent authorities, the chairs of the Co-ordination Group for Mutual Recognition and Decentralized Procedures—Human (CMDh) and Veterinary (CMDv), the GMP/GDP Inspectors Working Group, the Working Group of Communication Professionals (WGCP) and the European Surveillance Strategy Working Group (ESS WG).

EFPIA’s policy proposals to address drug shortages

The imperative to put into place a better system of monitoring and responding to drug shortages was further underscored by the EFPIA earlier this month (January 2020). “Addressing the issue of shortages is a priority for the research-based industry in Europe as well as for supply-chain stakeholders and national competent authorities,” said Nathalie Moll, Director-General of EFPIA in a January 15, 2020 statement. “The situation requires more than empathy or ‘lip-service’—it requires serious engagement and action…We are acutely aware of the impact a medicine shortage can have on an individual patient, but we are insufficiently equipped to measure and foresee how many individual patients are (or will be) affected by a medicine shortage in any given country or region, or to accurately predict the seriousness of the disruption.”

To address the situation, the EFPIA put out a position paper to more closely examine the causes and main drivers of medicine shortages. “Despite the multiple individual country reports, EFPIA believes that there is still a lack of sound evidence and knowledge about the key drivers and extent of medicine shortages,” Moll said in her January 15 statement. “That lack of understanding prevents us getting quickly to solutions for patients.”

Moll says that “one source of information, currently under-utilized, that can make a real difference is the data captured by the national repositories set up in the context of the EU Falsified Medicines Directive.” She explains that these repositories record the number of prescription medicines supplied by manufacturers in each country as well as the number of packs dispensed in national pharmacies, the number of packs exported (or imported) and, therefore allow for determining the overall level of stock remaining in the supply chain at a country level. Since the data are recorded in real time, she said the data should be available to regulatory authorities for analysis at a granular level (per day, per week, per month as well as per region, postal code or individual supply-chain actor).

”EFPIA is committed to working with other supply-chain stakeholders in order to ensure that the data stored in the interoperable network of national repositories being set up in the context of the EU Falsified Medicines Directive be used to help to monitor, analyze and understand the causes of shortages,” said Moll in her statement.

The recommendation by the EFPIA to leverage the network and data secured in the implementation of the EU Falsified Medicines Directive to address drug shortages is one of a five-point plan put forth in EFPIA’s position paper (see Table I).

Table I: European Federation of Pharmaceutical Industries and Associations' (EFPIA) Policy Proposals to Minimize Medicine Supply Shortages in Europe.
1. Better understanding of the root causes and drivers of shortages. This should include identification of bottlenecks in the supply chain (the European Medicines Verification System set up in the context of Falsified Medicines Directive could readily be used for this purpose).
2. Better reporting of shortages. Better reporting of shortages through enhanced cooperation between supply-chain stakeholders and the European Medicines Agency (EMA) and Heads of Medicines Agencies (HMA) Task Force. Standardized reporting requirements for information on clearly defined shortages should be agreed, giving priority to critical products with high potential impact. The information should be uploaded onto a common portal to ensure a streamlined and effective alert system.
3. Enforcement of existing requirements. Effective enforcement of existing regulatory requirements on all actors in the supply chain at a national level, coupled by measures to enhance transparency within the supply chain and support further dialogue across key stakeholders facilitating sharing of best practices.
4. Emergency intervention as a last resort. Emergency intervention as the last resort, with greater solidarity among member states of the European Union (EU) to reduce disruptions in the supply chain by abolishing the distortive effects of national schemes incentivizing imports from lower-income countries to higher income EU member states (e.g., dispensing quotas for parallel imported products in Germany) or imposing significant national stockpiling obligations limiting supply for other EU markets.
5. Temporary emergency measures. Where needed, appropriate and proportionate temporary emergency measures enacted at a national level to prevent shortages due to exports and to follow the good practice guidelines set out in EFPIA’s position paper on drug shortages.

Source: EFPIA, January 2020.

Manufacturing/quality’s role in drug shortages

In its policy proposals, the EFPIA outlined the root causes and drivers of drug shortages and the role that manufacturing and quality issues play (see Table II).

Table II. Causes and Main Drivers of Drug Shortages.
Product area Regulatory Manufacturing Quality Economic Supply Chain
Products not authorized Regulatory time lag NA NA NA NA
Products authorized but not launched National requirements Manufacturing capacity; Natural disasters NA Market attractiveness; Company size NA
Products authorized and marketed but unavailable due to temporary shortages NA Manufacturing lag times; GMP issues; Surges in demand API and excipient supply Pricing mechanisms; Tender practice; Cost-containment measures Supply quotas and parallel export; Logistical inefficiency
Products authorized and marketed but unavailable due to permanent shortages NA Manufacturing capacity NA Commercial withdrawals NA

NA is not applicable. API is active pharmaceutical ingredient

Source: European Federation of Pharmaceutical Industries and Associations (EFPIA), January 2020.

Further details on EFPIA’s policy proposals

In its policy proposals, the EFPIA provides further details and recommendations as outlined below.

Better understanding of the root causes of drug shortages. Despite multiple country reports, EFPIA says there is a lack of sound evidence and knowledge about the key drivers and extent of drug shortages. It says that most country information systems are based on different/diverging definitions of shortage, without any agreed view of what would be a meaningful disruption in the supply of medicines. In addition, it says that most country information systems do not make any distinction between “suspected medicine shortage” and “actual medicine shortage." “If the problem is to be effectively tackled, there needs to be a commonly agreed definition of what constitutes a genuine material disruption in the supply of medicines,” EFPIA says in its report.

The EFPIA is calling for all relevant sources of information to be used in order to provide additional intelligence about the root causes and drivers of shortages, including the identification of bottlenecks in the supply chain. In particular, EFPIA recommends that the data stored in the interoperable network of national repositories being set up in the context of the Falsified Medicines Directive (Directive 2011/62/EU) and its Delegated Regulation 2016/161/EU on safety features be used for the monitoring of shortages.

Better reporting of shortages. In its position paper, the EFPIA notes that the industry is currently working with the EMA and the Heads of Medicines Agencies in order to ensure the effective implementation of the EMA guidance on the detection and notification of shortages. The aim is to enable all EU competent authorities to receive more harmonized information about any potential disruption or interruption of supply at a very early stage in order to be able to anticipate when a potential disruption is likely to turn into a shortage with an actual impact on patients. “Getting to a common understanding that the best way to organize such a system is through a common portal with standardized reporting information format is in everyone's interests,” said the EFPIA in its position paper.

Effective enforcement of existing regulatory obligations. In its position paper, the EFPIA says that EU member states should evaluate the limits of the responsibilities of marketing authorization holders (MAHs) and wholesale distributors on a product-by-product basis, pointing to examples where there are scenarios where the MAH is not responsible for the shortage. Such an example is when the MAH’s supply meets ordinary orders, in real-time, in relation to demand from patients of the member state concerned, but a shortage is caused by a distributor’s export/supply of medicines to another customer in a different member state, without the MAH being aware. Another example relates to shortages caused by increased demand due to a shortage in the member state of an alternative medicinal product produced by another company.

Emergency intervention as a last resort to ensure security of supply. EFPIA considers that when, despite best efforts, shortages do occur, national legislation designed to achieve security of supply should address the following six areas as outlined below:

1. A clear definition of the notion of shortage linked to patient demand and patient needs (actual and potential) and the scope of application of any emergency legislation;

2. A data-driven methodology to identify actual and potential shortages;

3. A mechanism that allows a swift response to actual or potential shortages to minimize any negative impact on patients; enforcement should remain the responsibility of national competent authorities, and not be delegated to MAHs in order to avoid competition-law compliance risks;

4. An appeals process allowing supply-chain stakeholders to promptly challenge decisions adopted by the authorities to address shortages and obtain short-term relief as appropriate;

5. A regular review mechanism to ensure that emergency measures continue to be in place or are rescinded as appropriate to accurately reflect market reality in line with the principle of proportionality; measures should not go beyond what is strictly necessary to achieve the underlying public health objective and the return to the normal situation after the lift of the emergency measure should be gradually introduced in order to avoid a ‘bullwhip” effect in supply; and

6. Sufficiently deterrent but proportionate penalties for violations of the obligations imposed on supply-chain actors to combat shortages.

In providing these suggestions, EFPIA, however, emphasizes that “[t]emporary emergency measures can act as an important safety valve, but they do little to alleviate the underlying problems/root causes that give rise to shortages and do not address the fundamental malaise of today's inequality of access to innovative medicines.”

Call for action. In making its policy recommendations, the EFPIA in its position paper emphasizes that EU member states “should resist placing the entirety of the burden on manufacturers by imposing disproportionate requirements in terms of prevention plans, stock piling, reporting and/or penalties, without considering the potential effect of such country requirements on the continued supply of other EU markets. It says that the industry is currently working with the EMA and the Heads of Medicines Agencies (HMA) in order to ensure effective implementation of the July 2019 EMA/HMA guidance on detection and notification of shortages, which should enable all EU competent authorities to receive harmonized information about any potential disruption or interruption of supply at a very early stage from a common reporting portal. It says that in most countries, manufacturers are currently liaising with all supply-chain stakeholders in order to fix short-term issues within the limits of their responsibilities.