Industry tracking of drug shortages is one step closer

The Accelerated Recovery Initiative (ARI), a project organized by the Generic Pharmaceutical Assn. (GPhA; Washington), and contracted to IMS Health for operating, has received a positive advisory opinion from the Federal Trade Commission, moving it one step closer to reality. ARI, announced early this year, will seek to gather information, voluntarily, from generic manufacturers, especially those whose products are, or could soon be, in short supply, and then predict future availability based on production plans and market forecasts. The FTC opinion was needed because the undertaking could be considered collusive, without the data-security safeguards that GPhA and IMS Health say are being implemented. Ralph Neas, GPhA president, says that ARI will become operational “in the near future.”

Although not the routine headline that it was at the beginning of this year, drug shortages remain a painful problem for health systems, and continue at critical levels for (at last count) 214 drugs, primarily generic injectables. Through the just-passed FDA Safety and Innovation Act, FDA now has the authority to require manufacturers to give advance notice of upcoming production reductions, and an FDA Office of Drug Shortages is actively coordinating short-supply drugs, production schedules and alternative supplies.

In-depth studies of the problem over the past year point to manufacturing upsets and compliance problems among the limited number of suppliers of many of the drugs (which in turn is partly attributable to the low prices many generics have under GPO contracts). Both the House Committee on Government and Oversight Reform and the Senate Committee on Commerce, Science and Transportation issued staff reports this summer on the topic; the House report lays into FDA and Commissioner Margaret Hamburg, saying that “FDA has failed to ensure that enforcement and compliance activities are conducted in a manner that does not create unnecessary shortages of critical drugs,” and asserting that “the committee’s review did not find any instances where the shutdown was associated with reports of drugs harming customers.” FDA, responding to the claim that FDA warning letters have risen from around 450 in 2009 to over 1700 in 2011, pointed out that over 1000 of the letters were issued by a new Office of Tobacco Products starting in 2010, when FDA took command of tobacco product regulation; it also cited direct evidence, in the form of adverse event reports, and Class I recalls (the most serious type of recall) for some of the short-supply drugs.

The Senate report, which originated with an investigation by Rep. Elijah Cummings of the House committee, details the goings-on in gray market distribution: drugs acquired from authorized distributors of record (ADRs), then sold to secondary wholesalers or to pharmacies, from which the drugs enter a snakepit of brokers, other distributors and even some “pharmacies” that basically exist to resell drugs to other pharmacies (which is a violation of some states’ law). Price gouging and hard-to-justify markups abound. Some of the distributors who had been investigated have since ceased operations. While there can be legitimate reselling of short-supply drugs, there also appears to be no-holds-barred wheeling and dealing underneath the radar screen of state authorities. If nothing else, the Senate report demonstrates the value of drug pedigrees to track this activity.