FDA Proposes New Mfg Rating System to Address Drug Shortages

By Emily Forster -

October 31, 2019

The US Food and Drug Administration (FDA) has 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. The new system is one of three recommendations from the FDA.

The rating system would evaluate the strength of a manufacturing facility’s quality system and its ability to deliver high-quality products reliably and without disruption. “Historically, many pharmaceutical manufacturing firms have focused their efforts on compliance with Current Good Manufacturing Practices (CGMPs), which set a minimum threshold that companies must achieve to be allowed to supply the US marketplace,” said the FDA in an October 29, 2019 statement. “They do not include more advanced levels of quality management.”

The FDA says a rating system could be used to inform purchasers, group purchasing organizations (GPOs), and consumers about the state of, and commitment to, the quality management maturity of the manufacturing facility making the drugs that they are buying. “This effort would introduce transparency into the market and provide companies committed to quality management maturity with a competitive advantage, potentially enabling them to obtain sustainable prices as well as grow market share,” said the FDA in its statement.

The FDA also recommended considering new contracting approaches that help 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 combination of more complete information about contracting practices and greater transparency of the quality management maturity of specific manufacturing sites would enable payers, purchasers, and GPOs to consider new contracting approaches aimed at making sure there is a reliable supply of medically important drugs,” said the FDA in its statement. It said that this could be done through several different mechanisms, such as paying higher prices for drugs manufactured at top-rated facilities, requiring a certain quality maturity rating as a condition of contracting, or guaranteeing purchase of a set volume of products from sites achieving a certain quality maturity rating.

The FDA also recommended taking steps to increase understanding of the impacts of drug shortages and companies’ contracting practices that may contribute to them. The FDA pointed out that currently, there is little private- or public-sector effort to collect and analyze comprehensive information to characterize shortages, quantify their effects, or closely observe the contracting practices that may be driving them. The agency is recommending more systemic and transparent studies of current contracting practices to support development of model contracts. It also recommended new contracting approaches that help ensure a reliable supply of drugs, such as providing financial incentives to manufacturers to earn sustainable returns on their products.

The report is the work of the FDA’s Drug Shortages Task Force, an inter-agency task force, convened at the request of Congress, to study the problem of drug shortages, determine their root causes, and make recommendations for solutions to resolve these issues. To understand forces causing drug shortages, the Task Force commissioned a team of FDA economists and scientists to analyze drugs that went into shortage from 2013 to 2017. The agency also invited public participation by hosting a public meeting, opening a docket to receive public comments, and inviting stakeholders from industry, academia, and the medical provider and patient communities to a series of listening sessions to provide insight into the causes of drug shortages and identify potential solutions.

The Task Force found that the number of ongoing drug shortages has been rising and analyzed 163 drugs that went into shortage from 2013 to 2017 and compared these medicines to similar drugs that did not go into shortage. Shortage drugs were more likely to be relatively low-priced and financially unattractive drugs and were more likely to be sterile injectables. Shortages often occurred as a result of disruption in supply due to a variety of factors. Importantly, prices rarely rose after shortages began, and during shortages, production typically did not increase enough to restore supply to pre-shortage levels. Many manufacturers reported discontinuing the production of drugs before a shortage for commercial reasons (e.g., loss of profitability).

In addition to its recommendations, the report describes several legislative proposals and planned FDA initiatives that focus primarily on enabling the agency to help prevent supply disruptions that lead to shortages. These include new requests in the President’s FY 2020 budget proposal and new guidances that the agency intends to release by the end of calendar year 2019.

Source: FDA