DRUG SHORTAGES

Threat to Public Health 

Persists, Despite Actions to 

Help Maintain Product 

Availability

Statement of Marcia Crosse 

Director, Health Care

Testimony 

Before the Subcommittee on Health, 

Committee on Energy and Commerce, 

House of Representatives

For Release on Delivery 

Expected at 2:00 p.m. EST

Monday, February 10, 2014

GAO-14-339T

United States Government Accountability Office
United States Government Accountability Office

Highlights of GAO-14-339T, a testimony 

before the Subcommittee on Health, 

Committee on Energy and Commerce, House 

of Representatives

February 10, 2014

DRUG SHORTAGES

Threat to Public Health Persists, Despite Actions to 

Help Maintain Product Availability

Why GAO Did This Study

From prolonged duration of a disease, 

to permanent injury, to death, drug 

shortages have led to harmful patient 

outcomes. FDA—an agency within the 

Department of Health and Human 

Services (HHS)—works to prevent, 

alleviate, and resolve shortages. In 

2011, GAO recommended that FDA 

should enhance its ability to respond to 

shortages. In 2012, the Food and Drug 

Administration Safety and Innovation 

Act (FDASIA) gave FDA new 

authorities to address drug shortages. 

FDASIA also mandated GAO to study 

drug shortages.

In this statement, and in the report on 

which it is based, GAO focuses on 

(1) trends in recent drug shortages and 

describes what is known about their 

effect on patients and providers; (2) the 

causes of drug shortages; and (3) the 

progress FDA has made in addressing 

drug shortages. GAO analyzed data 

from FDA and the University of Utah 

Drug Information Service, which is 

generally regarded as the most 

comprehensive source of drug 

shortage information for the time 

period we reviewed. GAO interviewed 

officials from FDA, organizations 

representing providers, and drug 

manufacturers. GAO also reviewed the 

literature, relevant statutes, 

regulations, and documents.

What GAO Recommends

GAO recommended that FDA 

strengthen internal controls over its 

drug shortage data and conduct 

periodic analyses to routinely and 

systematically assess drug shortage 

information, using this information to 

proactively identify drug shortage risk 

factors. HHS agreed with GAO’s 

recommendations.

What GAO Found

The number of drug shortages remains high. Although reports of new drug 

shortages declined in 2012, the total number of shortages active during a given 

year—including both new shortages reported and ongoing shortages that began 

in a prior year—has increased since 2007. Many shortages are of generic sterile 

injectable drugs. Provider association representatives reported that drug 

shortages may force providers to ration care or face difficulties finding alternative 

drugs.

Number of Active Drug Shortages from January 2007 through June 2013

The immediate cause of drug shortages can generally be traced to a 

manufacturer halting or slowing production to address quality problems, 

triggering a supply disruption. Other manufacturers have a limited ability to 

respond to supply disruptions due to constrained manufacturing capacity. GAO 

also identified potential underlying causes specific to the economics of the

generic sterile injectable drug market, including that low profit margins have 

limited infrastructure investments or led some manufacturers to exit the market. 

While shortages have persisted, the Food and Drug Administration (FDA) has

prevented more potential shortages in the last 2 years by improving its 

responsiveness. FDA has initiated steps to improve its response to shortages, 

such as modifying the information on its drug shortages website. However, there 

are shortcomings in its management of drug shortage data that are inconsistent 

with federal internal control standards. For example, FDA has not created 

policies or procedures governing the management of the data and has not 

conducted routine analyses using these data. Such shortcomings could 

ultimately hinder FDA’s efforts to understand the causes of specific shortages as 

well as undermine its efforts to prevent them from occurring.

View GAO-14-339T. For more information, 

contact Marcia Crosse at (202) 512-7114 or 

crossem@gao.gov.
 

Page 1 GAO-14-339T

Chairman Pitts, Ranking Member Pallone, and Members of the 

Subcommittee:

We are pleased to be here today to discuss our work on drug shortages. 

Drug shortages have led to harmful outcomes for patients of all ages: 

from prolonged duration of a disease, to permanent injury, to death. Over 

the last decade, an increasing number of prescription drugs have been in 

short supply. The Food and Drug Administration (FDA)—an agency within 

the Department of Health and Human Services (HHS)—is responsible for 

overseeing the safety and effectiveness of drugs marketed in the United 

States, including by addressing drug shortages.1 A unit within FDA, 

referred to as the Drug Shortage Staff (DSS), coordinates the agency’s 

activities to prevent, alleviate, and resolve shortages. In November 2011, 

we found that the agency lacked sufficient authority to respond to 

shortages. We recommended that FDA strengthen its response and 

suggested that Congress consider establishing a requirement for 

manufacturers to report potential or actual supply disruptions to FDA.2

The Food and Drug Administration Safety and Innovation Act (FDASIA), 

enacted in July 2012, provided FDA new authorities to address drug 

shortages and assigned the agency new responsibilities.3 It also 

mandated us to update our work on drug shortages. This statement 

summarizes the findings in our report, being released today, entitled Drug 

Shortages: Public Health Threat Continues, Despite Efforts to Help 

Ensure Product Availability.

4

As part of its oversight of drugs, FDA’s approval is required before new 

drugs and generic drugs can be marketed for sale and its responsibilities 

continue once a drug is approved for marketing.5

 

1

FDA defines a drug shortage as a situation in which the total supply of all clinically 

interchangeable versions of an FDA-regulated drug is inadequate to meet the current or 

projected demand.

If FDA identifies a 

violation of law or regulations, it may issue a warning letter or take an 

enforcement action. In some cases, FDA may exercise its regulatory 

2

GAO, Drug Shortages: FDA’s Ability to Respond Should be Strengthened, GAO-12-116

(Washington, D.C.: Nov. 21, 2011).

3

Pub. L. No. 112-144, 126 Stat. 993 (2012).

4

GAO-14-194 (Washington, D.C.: Feb. 10, 2014).

5

21 U.S.C. § 355.
 

Page 2 GAO-14-339T

discretion and assess whether the risks of taking a certain enforcement or 

other action will outweigh the benefits; for example, when an action may 

cause or exacerbate a drug shortage, FDA may exercise its regulatory 

discretion and refrain from taking action.6

When FDA is informed of a potential shortage in advance, it may take 

steps to prevent the shortage, such as providing assistance to the 

manufacturer to address manufacturing problems.7 For example, it may 

offer feedback on a manufacturer’s proposed approach to responding to 

quality concerns. In addition, FDA can expedite the review of a drug 

application or can expedite inspections once remediation to address 

quality problems has been completed.8

FDASIA required us to examine several different aspects of shortages. 

Our report, and my remarks today, focus on 1) the trends in recent drug 

shortages and describes what is known about their effect on patients and 

providers, 2) the causes of drug shortages, and 3) the progress FDA has 

made in addressing drug shortages.

While there are a number of steps 

FDA can take to address a shortage, FDA cannot require manufacturers 

to start producing or continue producing a drug. It also cannot require 

manufacturers to maintain or introduce manufacturing redundancies in 

their establishments to provide them with increased flexibility to respond 

to shortages.

9

 

6

In determining how to respond to a shortage, FDA takes steps to assess whether a drug 

is medically necessary, defined as any drug that is used to treat or prevent a serious 

disease or medical condition for which there is no other adequately available drug that is 

judged by medical staff to be an appropriate substitute.

To address these issues, we 

analyzed data from the University of Utah Drug Information Service 

(UUDIS) on drugs that were in short supply from January 1, 2007, 

7

FDA officials said that they take steps to address shortages of both medically necessary 

drugs and non-medically necessary drugs, though they give priority to shortages of 

medically necessary drugs.

8

FDA periodically inspects drug manufacturing establishments to assess their ongoing 

compliance with Current Good Manufacturing Practice regulations. These regulations 

provide a framework for a manufacturer to follow to produce safe, pure, and high-quality 

drugs. See 21 C.F.R. pts. 210-211.

9

Our report also describes steps federal agencies have taken to respond to gray market 

activities and describes incentives that have been proposed to prevent shortages. 

GAO-14-194. 
 

Page 3 GAO-14-339T

through June 30, 2013.10 We interviewed representatives from 10 national 

associations representing health care providers—including physicians, 

hospitals, and pharmacists—and from eight drug manufacturers and 

associations representing them, and reviewed relevant documents from 

these groups.11 We performed a search of research databases to identify 

literature on the causes of drug shortages, and analyzed FDA data on the 

reported causes of shortages that occurred from January 1, 2011, 

through June 30, 2013.12 We reviewed documentation and interviewed 

FDA officials regarding the agency’s current approach to managing drug 

shortages and implementing FDASIA requirements, and compared this 

approach to the relevant standards described in the Standards for Internal 

Control in the Federal Government and to the agency’s requirements 

under FDASIA.13

We found that the number of drug shortages remains high and that 

providers experience challenges responding to drug shortages without 

adversely affecting patient care. From 2007 through 2011, the number of 

drug shortages reported increased each year, with a record 255 

shortages reported in 2011.

Our work was performed in accordance with generally 

accepted government auditing standards.

14

 

10These data are generally regarded as the most comprehensive and reliable source of 

drug shortage information for the time period we reviewed. We reviewed all UUDIS data 

used for reasonableness, outliers, and consistency; based on our review, we determined 

that the data were sufficiently reliable for our purposes.

However, in 2012, 195 shortages were 

reported; this was the first decrease from one year to the next since 2006. 

11We interviewed three leading national associations representing drug manufacturers, 

both brand-name and generic, and five generic sterile injectable manufacturers. 

Specifically, we selected the top three manufacturers of generic sterile injectables 

between 2010 and 2012. We also selected two additional manufacturers, which were 

among the manufacturers associated with the highest number of shortages, according to 

the following report: IMS Institute for Healthcare Informatics, Drug Shortages: A Closer 

Look at Products, Suppliers, and Volume Volatility. (Parsippany, N.J.: November 2011).

12We reviewed all FDA data used for reasonableness, outliers, and consistency; based on 

our review, we determined that the data were sufficiently reliable for our purposes.

13See GAO, Standards for Internal Control in the Federal Government, 

GAO/AIMD-00-21.3.1 (Washington, D.C.: November 1999).

14A shortage is only counted in the total for “reported” shortages in the year that UUDIS is 

first notified of the shortage. For example, a shortage reported in July 2010 and resolved 

in March 2012 would only be counted as a reported shortage in 2010. It would not be 

counted as a reported shortage in either 2011 or 2012, although it would be counted in the 

total number of active shortages in each of those years.
 

Page 4 GAO-14-339T

Though the number of newly reported shortages has recently declined, 

due to ongoing shortages that began in prior years, the number of active 

shortages has increased steadily since 2007 and remains high.15

Figure 1: Number of Active Drug Shortages from January 2007 through June 2013

The 

number of active shortages each year almost tripled between 2007 and 

2012 from 154 in 2007 to 456 in 2012 (see fig. 1).

Note: The active shortage total for each year includes 1) new shortages reported that year and 2) 

shortages that started in a prior year that were still ongoing.

We found that many shortages involved generic sterile injectable drugs. 

Specifically, based on our review of the characteristics of a subset of 

critical drug shortages, we found that 44 percent of the 219 critical 

 

15The active shortage total for each year includes both (1) new shortages reported that 

year and (2) shortages that started in a prior year that were still ongoing. For example, a 

shortage reported in July 2010 and resolved in March 2012 would be counted as an active 

shortage in three different years (2010, 2011, and 2012).
 

Page 5 GAO-14-339T

shortages involved generic sterile injectable drugs.16 Further, four 

therapeutic classes—anti-infective, anesthetic and central nervous 

system, cardiovascular, and nutritive—comprised 53 percent of critical 

drug shortages.17

Faced with this continuing problem, provider association representatives 

identified challenges in responding to drug shortages without adversely 

affecting patient care. Provider association representatives told us that a 

number of the challenges that we reported in 2011 were still relevant for 

their members. Providers may be challenged by delays in or rationing of 

care, difficulties finding alternative drugs, risk associated with medication 

errors, higher costs, and reduced time for patient care.

We also found that quality problems resulting in supply disruptions and 

constrained manufacturing capacity were frequently cited as the 

immediate causes of recent drug shortages. We determined that the most 

frequently cited immediate cause of a drug shortage was when a 

manufacturer halted or slowed production after a quality problem was 

identified, resulting in a supply disruption.18

 

16UUDIS identified 219 of the 382 shortages reported from June 1, 2011, through 

June 30, 2013, as critical shortages. We reviewed the characteristics of those 219 critical 

shortages, which represented 57 percent of all shortages reported during this time. These 

shortages were identified by UUDIS as critical because alternative medicines were not 

available, the shortages affected multiple manufacturers, or it received multiple reports 

from different institutions.

These supply disruptions 

were linked to, among other things, such problems as bacterial 

contamination or the presence of glass or metal particles in drug vials. 

Although quality problems were a frequently cited issue, there was not 

complete agreement as to whether quality problems were always the 

primary trigger for the supply disruptions that cause shortages, with two 

studies and three manufacturers suggesting that changes in FDA 

inspections of manufacturing establishments also played a role. In 

17Examples of shortages in these therapeutic classes during this time period included 

acyclovir and doxycycline (anti-infective); propofol and diazepam (anesthesia and central 

nervous system); nitroglycerin and verapamil (cardiovascular); and potassium chloride 

and sodium phosphate (nutritive).

18As shortages have been concentrated in the generic sterile injectable market in recent 

years, the literature on the subject of shortages and comments from manufacturer 

representatives largely focused on the causes of shortages specific to that market. As a 

result, our discussion about the causes of shortages may not be applicable to all 

shortages.
 

Page 6 GAO-14-339T

reviewing the literature, we identified a number of additional factors that 

can cause supply disruptions and ultimately result in shortages—such as 

permanent product discontinuations or the unavailability of raw 

materials—but our analysis of FDA data and interviews with 

representatives of drug manufacturers suggested that these factors play a 

relatively small role overall.

Constrained manufacturing capacity limits other manufacturers’ ability to 

respond to supply disruptions. There are few generic sterile injectable 

manufacturers overall, and the existing manufacturers are producing a 

large number of drugs. For a variety of reasons, these manufacturers 

have little flexibility to increase production in existing facilities or move 

production to alternative facilities.

In addition, half of the studies we reviewed suggested that the immediate 

causes of drug shortages, such as quality problems, are driven by an 

underlying cause that stems from the economics of the generic sterile 

injectable drug market. However, the studies that cited underlying causes 

did not all focus on the same underlying cause. The potential underlying 

causes cited in the literature were that competition in the generic drug 

market focuses primarily on price; the possible role of group purchasing 

organizations; and a change in Medicare Part B reimbursement policy.

The studies that cited these underlying causes generally suggested that 

such causes led to low profit margins, which limited infrastructure 

investments or led some manufacturers to exit the market. Manufacturer 

representatives had mixed views on the potential underlying causes we 

identified in the literature.

Finally, we determined that FDA has prevented more potential shortages 

and improved its ability to respond to shortages since we issued our prior 

report on this topic in 2011. Based on our analysis of FDA data from 

January 2011 through June 2013, FDA was able to prevent 89 potential 

shortages in 2011, 154 potential shortages in 2012, and 50 potential 

shortages through June 2013.19

 

19As we did in analyzing data for our 2011 report, we grouped together shortages of 

multiple versions of the same drug to identify the total number of potential shortages 

prevented. While FDA had reported preventing 195 potential shortages in 2011, 282 

potential shortages in 2012, and 80 potential shortages through June 2013, we found that 

these data represented the number of individual drug products for which a shortage had 

been averted.

This is more than the 35 potential 
 

Page 7 GAO-14-339T

shortages we found that FDA prevented in 2010 and the 50 prevented 

through June 2011.

FDA officials told us that FDASIA’s requirement that manufacturers notify 

FDA in advance of a potential shortage allowed FDA to employ various 

steps to prevent or resolve shortages sooner.20

While FDA is planning on establishing a new information system to track 

drug shortage data, we found that it still lacks policies, procedures, and 

specific training materials related to management and use of its existing 

drug shortage database. This lack of documentation may limit the 

agency’s ability to communicate proper use of the existing and new 

databases to staff and could also ultimately lead to inconsistencies in the 

use of the database. The lack of policies and procedures is also 

inconsistent with internal control standards for the federal government, 

which state that agencies should have controls over information 

processes, including procedures and standards to ensure the 

completeness and accuracy of processed data.

Such steps include 

expediting a number of agency actions to prevent or resolve shortages, 

contacting manufacturers regarding their ability to increase production, 

and facilitating the availability of drugs from alternate sources to help 

prevent or resolve a shortage. FDA has taken steps to further enhance its 

ability to respond to shortages, such as modifying the information the 

agency displays on its drug shortages website, developing a drug 

shortage database, and increasing the number of DSS personnel from 4 

in 2011 to 11 in 2013.

21

 

20Consistent with the matter for Congressional consideration contained in our 2011 report, 

FDASIA required manufacturers to notify FDA at least 6 months prior to the date of a 

discontinuance or interruption (or as soon as possible if 6 months notice is not feasible) in 

the manufacture of a drug that is life supporting, life sustaining, or used to treat debilitating 

health issues. FDASIA required FDA to issue a final rule implementing this requirement by 

January 9, 2014. § 1001(a), 126 Stat. at 1099 (to be codified at 21 U.S.C. § 356c). FDA 

issued a proposed rule on November 4, 2013, with a 60-day comment period. 78 Fed. 

Reg. 65904 (Nov. 4, 2013) (to be codified at 21 C.F.R. pts. 20, 310, 314, and 600).

In addition, we found 

that FDA has not conducted routine analyses of its existing drug shortage 

database to identify, evaluate, and respond to the risks of drug shortages 

proactively. Again, according to the internal control standards for the 

federal government, agencies should comprehensively identify risk 

through qualitative and quantitative methods, including data collected in 

21GAO/AIMD-00-21.3.1. 
 

Page 8 GAO-14-339T

the course of their work.22

Based on our work, we have identified two actions that we recommend 

the Commissioner of FDA take to enhance its oversight of drug 

shortages:

We determined that FDA currently uses data 

on an ad hoc basis to respond to specific shortages as opposed to using 

the data to identify trends or patterns that may help it predict and possibly 

prevent shortages. By only using the database to respond to individual 

shortages as they occur, FDA is missing opportunities to use the data 

proactively to enhance the agency’s ability to prevent and mitigate drug 

shortages.

• develop policies and procedures for the use of the existing drug 

shortages database (and, ultimately, the new drug shortages 

information system) to ensure staff enter information into the database 

in a consistent manner and to ensure the accuracy of the information 

in the database; and

• conduct periodic analyses using the existing drug shortages database 

(and, eventually, the new drug shortages information system) to 

routinely and systematically assess drug shortage information, and 

use this information proactively to identify risk factors for potential 

drug shortages early, thereby potentially helping FDA to recognize 

trends, clarify causes, and resolve problems before drugs go into 

short supply.

In commenting on a draft of our report HHS agreed with our 

recommendations and stated that it will continue improving the collection 

of drug shortage data as part of a larger system that would help identify 

problems with quality drug manufacturing as they evolve. HHS also stated 

that it agrees that policies and procedures for drug shortage data entry 

are important and noted that FDA has ongoing work to ensure such 

policies and procedures are established.

Chairman Pitts, Ranking Member Pallone, and Members of the 

Subcommittee, this concludes my prepared remarks. I would be pleased 

to respond to any questions you may have.

 

22GAO/AIMD-00-21.3.1. 
 

Page 9 GAO-14-339T

For future contacts regarding this statement, please contact 

Marcia Crosse ((202) 512-7114 or crossem@gao.gov). Individuals 

making key contributions to this testimony and the report on which 

it is based include Geri Redican-Bigott, Assistant Director; 

Katherine L. Amoroso; Alison Goetsch; and Eagan Kemp.

(291191)
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