As FDA asks for more authority to address prescription drug shortages, a leading expert on supply chains is arguing the agency’s inability to keep up with regular inspections of overseas facilities that produce generic drugs is a major contributor to shortages, with FDA failing to identify quality issues until they become disruptive.
Tinglong Dai, a professor at Johns Hopkins Carey Business School who studies health care supply chains, told Inside Health Policy FDA’s lax foreign inspections regime is a major contributor to drug shortages and other “invisible harms” caused by poor-quality generic drugs.
Dai noted that a majority of prescription drugs in the United States are manufactured in other countries, and FDA has limited insight into those foreign facilities. Only about 6% were inspected in 2022, he said, and there is evidence many facilities attempt to manipulate the outcomes of their inspections. That can lead to quality issues that trigger drug shortages.
FDA has responded to recent shortages of chemotherapy drugs by increasing imports from overseas manufacturers, including from a Chinese manufacturer whose product was not approved by FDA and from the Indian company, Intas Pharmaceuticals, whose poor manufacturing conditions led to an FDA warning letter and contributed to the initial shortage.
“It’s like we have no choice,” Dai said. “Even for the same company, Intas Pharmaceuticals, we’ve known they’re having issues, but we’re still importing thousands from that same company, out of necessity.”
In addition to drug shortages, Dai said, lack of adequate inspections of foreign facilities could lead to “a lot of quality issues that could be as terrible as shortages.”
FDA has repeatedly told Congress it needs more authorities to tackle shortages and has taken steps to coordinate across agencies and with the private sector to stabilize the supply chain.
“While the FDA cannot directly affect many of the business decisions related to the drug supply chain, the agency has, among other things, encouraged the adoption of advanced manufacturing technologies and mature quality management practices to further these important efforts,” the spokesperson said.
A recent FDA response to questions from Republican legislators acknowledged that less than half of drug companies required to submit information to the agency used to prevent drug shortages before they happen are complying.
FDA’s report to Congress on drug shortages said that the number of companies in compliance has increased and that the number of new shortages identified has decreased to 49 in 2022, from a high of 251 in 2011.
Dai acknowledged that FDA lacks the authorities and funding to effectively address supply chain issues, but had a recommendation for what the agency should do immediately: “Stop telling Americans that generics are as safe and as effective as brand-name drugs.”
Generic drugs, he said, should be labeled with information about the site of their manufacture and whether it has been recently inspected by FDA. He added that consumers should also be informed about the fact that unlike manufacturers of brand-name drugs, generic drug producers may not be liable for adverse reactions to their products, under a 2013 Supreme Court case.
Other experts have argued that the low prices of generic drugs can drive shortages by discouraging domestic manufacturing. And FDA Commissioner Robert Califf has echoed that logic, saying in May, “we've got to deal with the fact that many of these commodities and generic products are very low cost. There's intense competition and when the price gets below what can support, you mentioned, a highly qualified workforce, investment in facilities, then the pressure to offshore comes in, which we've also talked about.”
As drug shortages continue to rise, Bloomberg News has reported that the White House has put together a team of officials to work on long-term solutions to problems with the drug supply chain, including members Domestic Policy Council and National Economic Council as well as FDA officials. Sources told Bloomberg the FDA representatives told the White House the agency lacks the funding or authority to make changes policy advisers suggested.
In a statement to Inside Health Policy, a senior administration official said the Biden administration has worked since taking office to strengthen pharmaceutical supply chains and is currently focused on improving resiliency for supplies of critical medical products.
And a spokesperson for FDA said the agency “is fully engaged in cross-government discussions to identify potential policies and provide input on proposals informed by our current authorities, resources and industry knowledge to ensure meaningful solutions.”
FDA’s response to shortages has also sometimes become a divisive issue among lawmakers, with Republicans criticizing the agency for ineffective responses and inadequate scrutiny of foreign manufacturers.
“The FDA's response to shortages is to allow for foreign-made generics and (active pharmaceutical ingredients [APIs]) to come unfettered to the U.S. market. The FDA claims to be focused on collecting information, but it does not effectively use the information that it already has,” Rep. Morgan Griffith (R-VA), chair of the House Energy & Commerce Committee’s oversight panel, said in May.
In a hearing addressing what to include in the must-pass reauthorization of the Pandemic and All-Hazards Preparedness Act (PAHPA) Tuesday (June 13), Republicans and Democrats continued to clash over whether bills aimed at dealing with drug shortages should be included in the package. The committee’s ranking Democrat, Rep. Frank Pallone (NJ), called Republicans’ refusal to consider drug shortage legislation supported by FDA “irresponsible.”
Committee chair Rep. Cathy McMorris Rodgers (R-WA) said PAHPA is not the appropriate vehicle for addressing the issue, but that work on shortages is still a priority. “[R]epublicans, absolutely, are committed to looking at the issues of drug shortages, and we will continue to work with you on that,” she said.
McMorris Rodgers and the ranking Republican on the Senate Finance Committee, Sen. Mike Crapo (ID) sent out a request for information (RFI) on Monday (June 12), which Pallone criticized as partisan. The RFI asks stakeholders for information on what market factors lead to drug shortages and how federal agencies can address those economic issues, pointing to “government-imposed price caps” as a factor in drug shortages and seeking ways to address the issue outside of FDA action.
“Low-cost generic medications, which account for more than 90 percent of retail prescriptions filled across the U.S., have proven particularly vulnerable, comprising around two-thirds of shortages at any given time,” the RFI says. “Given that generic prescriptions drive vital savings for consumers, with American prices averaging roughly 16 percent less than in non-U.S. countries, weaknesses in our ability to supply these products with reliability and predictability could lead to catastrophic effects for affordability, access, and quality moving forward.”
Dai said members of Congress have already introduced legislation that would address many problems with the supply of foreign generic drugs, but none of it has passed. He argued the issue should be a bipartisan one and all lawmakers should be interested in ensuring that Americans can continue to access prescription drugs if geopolitical events lead to a disruption in supply from a major producer, like China.
“Congress has introduced many, many laws, but they should really have a sense of urgency to get those laws passed,” he said. – Jessica Karins (jkarins@iwpnews.com), Lia DeGroot (ldegroot@iwpnews.com)
