DRUG SHORTAGES

Certain Factors Are 

Strongly Associated 

with This Persistent 

Public Health 

Challenge

Report to Congressional Committees

July 2016

GAO-16-595

United States Government Accountability Office
United States Government Accountability Office

Highlights of GAO-16-595, a report to 

congressional committees

July 2016

DRUG SHORTAGES

Certain Factors Are Strongly Associated with This 

Persistent Public Health Challenge

Why GAO Did This Study

Drug shortages are a serious public 

health concern. GAO previously found 

that many shortages were of sterile 

injectable drugs and could generally be 

traced to supply disruptions caused by 

manufacturers slowing or halting 

production to address quality issues.

Congress included a provision in 

statute for GAO to review several 

aspects of drug shortages. This report 

examines (1) trends in drug shortages, 

(2) FDA’s efforts to prioritize reviews of 

drug submissions to address 

shortages, (3) trends in FDA warning 

letters issued to sterile injectable 

manufacturing establishments for 

noncompliance with manufacturing 

standards, and (4) the relationship 

between certain factors and shortages 

of sterile injectable drugs. GAO 

analyzed—using various methods 

including regression analyses—drug 

shortage data from the University of 

Utah Drug Information Service from 

2010 through 2015; drug sales data 

from IMS Health from 2010 through 

2014 for sterile injectable anti-infective 

and cardiovascular drugs (which have 

been subject to multiple and prolonged 

shortages); and FDA data, including 

data on warning letters related to 

inspections conducted from October 

2006 through September 2013 and 

data on prioritized reviews from 

January 2010 through July 2014, which 

were generally the latest available data 

at the time GAO began its analysis.

GAO also interviewed FDA officials 

and reviewed agency documents, 

including documents related to the 

issuance of warning letters to seven 

establishments FDA and others said 

were linked to widespread shortages.

What GAO Found

When available supplies of prescription drugs are insufficient, patient care may 

be adversely affected. The number of new shortages has generally decreased 

since 2011, while the number of ongoing shortages remained high.

Number of Drug Shortages from January 2010 through December 2015

To help address shortages, the Food and Drug Administration (FDA) prioritized

the review of—more quickly reviewed—383 drug applications and supplements

during the time period GAO examined. Most were for generic sterile injectable 

drugs. FDA’s approval of some of these submissions occurred before the 

shortage was resolved. Although the timing of FDA’s approval does not establish 

a causal link, it could indicate that FDA’s action helped address some shortages.

GAO found that, as part of FDA’s oversight of drug safety and quality, it generally 

issued an increasing number of warning letters to sterile injectable drug 

establishments during the time period GAO reviewed for noncompliance with 

manufacturing standards outlined in federal regulations. However, the 

percentage of inspections resulting in warning letters remained relatively small as 

the number of inspections also increased. Moreover, seven establishments that 

were linked to widespread shortages and received warning letters all had 

previous indications of difficulty complying with manufacturing standards.

Shortages of sterile injectable anti-infective and cardiovascular drugs in 2012, 

2013, and 2014 were strongly associated with certain factors GAO examined.

Two factors—a decline in the number of suppliers and failure of at least one 

establishment making a drug to comply with manufacturing standards resulting in 

a warning letter—suggest that shortages may be triggered by supply disruptions. 

A third factor—drugs with sales of a generic version—suggests that due to

relatively low profit margins for generic drugs, manufacturers are less likely to 

increase production, making the market vulnerable to shortages. The Department 

of Health and Human Services (HHS) reviewed a draft of this report and 

reiterated its commitment to addressing drug shortages. GAO incorporated 

HHS’s technical comments as appropriate.

View GAO-16-595. For more information, 

contact Marcia Crosse at (202) 512-7114 or 

crossem@gao.gov.
Page i GAO-16-595 Drug Shortages

Letter 1

Background 9

New Drug Shortages Have Decreased Since 2011, but Many 

Shortages Persist for Multiple Years 15

FDA Prioritized Reviews of 383 Submissions to Respond to Drug 

Shortages 18

Number of Warning Letters FDA Issued to Sterile Injectable Drug 

Establishments Increased, Including Letters to Establishments 

Linked to Widespread Shortages 26

Shortages of Sterile Injectable Anti-infective and Cardiovascular 

Drugs Were Strongly Associated with Certain Factors 36

Agency and Third-Party Comments and Our Evaluation 41

Appendix I Comparison of Drug Shortage Data Collected by the Food and Drug 

Administration and the University of Utah Drug Information Service 43

Appendix II Scope and Methodology – Relationship between Certain Factors and 

Sterile Injectable Drug Shortages 52

Appendix III Comparison of Selected Factors for Sterile Injectable Anti-infective 

and Cardiovascular Drugs by Shortage Status, 2012 - 2014 61

Appendix IV Comparison of Selected Factors for Sterile Injectable Anti-infective 

and Cardiovascular Drugs by Shortage Status in 2014 63

Appendix V Comments from the Department of Health and Human Services 65

Appendix VI GAO Contact and Staff Acknowledgments 69

Related GAO Products 70

Contents
Page ii GAO-16-595 Drug Shortages

Tables

Table 1: Status of Submissions FDA Received from January 2010 

through July 2014 and Prioritized Its Review of to Address 

Drug Shortages 21

Table 2: Median Time to Approval for Submissions that FDA 

Received from January 2010 through July 2014 and 

Prioritized Its Review of to Address Drug Shortages 22

Table 3: Summary of Relationship between Submissions 

Prioritized by FDA for 38 Selected Drugs and Drug 

Shortages 24

Table 4: Number of New Shortages of Sterile Injectable Drugs and 

Warning Letters Issued to Sterile Injectable Drug 

Establishments for Noncompliance with Manufacturing 

Standards, Fiscal Years 2007 through 2013 28

Table 5: Estimated Percentage Point Increase in Probability of a 

Drug Shortage in the Presence of Certain Factors, for 

Sterile Injectable Anti-infective and Cardiovascular Drugs, 

2012-2014 37

Table 6: Number of Sterile Injectable Anti-infective and 

Cardiovascular Drugs Manufactured by Establishments 

That Failed to Comply with Manufacturing Standards 

Resulting in a Warning Letter from 2010 through 2013 39

Table 7: Summary of FDA’s and UUDIS’s Processes for 

Identifying and Resolving Drug Shortages 46

Table 8: Information about the Eight Shortages That Were 

Identified by Both FDA and UUDIS from January 2013 

through March 2013 49

Table 9: Reasons Why FDA Differed with the University of Utah 

Drug Information Service in Identifying Certain Shortages 

from January 2013 through March 2013 50

Table 10: Estimated Odds Ratios from Repeated Measures 

Logistic Regression Model of Shortages for Sterile 

Injectable Anti-infective and Cardiovascular Drugs, 2012-

2014 57

Table 11: Estimated Probability of a Drug Shortage When Each 

Explanatory Variable Is Present, Sterile Injectable Antiinfective and Cardiovascular Drugs, 2012-2014 58

Table 12: Relationship between Certain Factors and Shortages of 

Sterile Injectable Anti-infective and Cardiovascular Drugs, 

by Shortage Status in 2012-2014 61
Page iii GAO-16-595 Drug Shortages

Table 13: Certain Factors Associated with Sterile Injectable Antiinfective and Cardiovascular Drugs, by Shortage Status in 

201463

Figures

Figure 1: Number of Drug Shortages from 2010 through 2015 16

Figure 2: Duration of Ongoing Shortages from 2010 through 2015 17

Figure 3: Number of Submissions FDA Prioritized Its Review of to 

Address Drug Shortages, by Submission Type and Year 

Received, January 2010 through July 2014 19

Figure 4: Number of Sterile Injectable Drug Establishment 

Inspections and Percentage Resulting in Warning Letters 

for Noncompliance with Manufacturing Standards, Fiscal 

Years 2007 through 2013 27

Figure 5: Percentage of Inspections with a For-Cause Component, 

by Establishment Type, Fiscal Year 2007 through Fiscal 

Year 2013 31

Figure 6: Indications of Potential Manufacturing Problems for 

Seven Establishments Linked to Widespread Shortages, 

Fiscal Year 2007 through Fiscal Year 2013 34

Figure 7: Comparison of the Number of Drug Shortages Identified 

by FDA and UUDIS from January 2013 through March 

2013 48

Abbreviations 

ANDA abbreviated new drug application

ASHP American Society of Health-System Pharmacists

DSS Drug Shortage Staff

FDA Food and Drug Administration

HHS Department of Health and Human Services

NDA new drug application

UUDIS University of Utah Drug Information Service

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Page 1 GAO-16-595 Drug Shortages

441 G St. N.W.

Washington, DC 20548

July 7, 2016

The Honorable Lamar Alexander

Chairman

The Honorable Patty Murray

Ranking Member

Committee on Health, Education, Labor, and Pensions

United States Senate

The Honorable Fred Upton

Chairman

The Honorable Frank Pallone, Jr.

Ranking Member

Committee on Energy and Commerce

House of Representatives

Shortages of prescription drugs continue to be a serious public health 

concern. When available drug supplies are insufficient to meet medical 

needs, patient care may be adversely affected. Drugs in shortage include 

those that are essential therapies, such as antibiotics, chemotherapy 

agents, cardiovascular drugs, and pain medications. Shortages can result 

in delayed patient care and medication errors. They may also result in 

rationing, which can lead to the use of less effective treatments and force 

providers to make difficult choices, such as deciding which cancer 

patients should start or complete a round of chemotherapy. In light of the 

effect such shortages can have on public health, the Food and Drug 

Administration (FDA) works within the scope of its authority to ensure 

drug availability by taking actions to address—prevent, mitigate, or 

resolve—drug shortages.1

We previously found that many shortages were of sterile injectable drugs 

and that their immediate cause could generally be traced to supply 

disruptions triggered by a manufacturer slowing or halting production to 

 1

FDA is an agency within the Department of Health and Human Services, and it is 

responsible for overseeing the safety and effectiveness of drugs marketed in the United 

States and protecting public health.

Letter
Page 2 GAO-16-595 Drug Shortages

address quality problems.2 In addition to this immediate cause, for our 

2014 report, we conducted a literature review and from that we also 

identified potential underlying causes of shortages that were particular to 

the economics of the generic sterile injectable drug market, such as low 

profit margins limiting infrastructure investments or leading some 

manufacturers to exit the market. Also cited in the literature we reviewed 

as causes of shortages were more rigorous inspections of drug 

manufacturing establishments by FDA and an increase in warning letters 

issued by the agency.3 Proponents of this view maintained that warning 

letters caused shortages as establishments slowed or shut down 

production in response to receiving the letters. Opponents of this view 

counter that manufacturers encountered quality problems resulting from 

noncompliance with manufacturing standards, which led to both the 

issuance of these letters and shortages. 

To help address some shortages, regardless of the cause, FDA has 

stated in its drug shortages strategic plan that it prioritizes its review of 

submissions from drug sponsors seeking approval to bring a similar drug 

to market.4 These submissions may include applications to market an 

additional generic version of a drug in shortage or supplemental 

applications, requests to make certain changes to already approved 

generic or brand-name drug applications. An example of a supplemental 

 2

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

(Washington, D.C.: Nov. 21, 2011) and Drug Shortages: Public Health Threat Continues, 

Despite Efforts to Help Ensure Product Availability, GAO-14-194 (Washington, D.C.: Feb. 

10, 2014). For a list of these and other related reports, see the Related GAO Products at 

the end of this report.

3

FDA issues warning letters when it identifies violations that, if not promptly and 

adequately corrected, may lead the agency to take enforcement actions, such as seeking 

court action to stop an establishment from manufacturing and distributing a product until 

the violation is corrected.

4

See Food and Drug Administration, Strategic Plan for Preventing and Mitigating Drug 

Shortages (October 2013). When an application or supplement is prioritized, it is 

considered more quickly by FDA review staff than it otherwise would be and therefore 

rises up in a reviewer’s queue of submissions. 
Page 3 GAO-16-595 Drug Shortages

application requiring FDA approval would be one that adds a new 

manufacturing site.5

Congress included a provision in the Food and Drug Administration 

Safety and Innovation Act for us to review several different aspects of 

drug shortages.6 Our February 2014 report examined these issues, and 

this report continues to explore drug shortages and FDA’s management 

of them in more detail. Specifically, this report examines

1. trends in recent drug shortages;

2. FDA’s prioritization of reviews of drug submissions to address drug 

shortages;

3. trends in FDA warning letters issued to sterile injectable drug 

manufacturing establishments for noncompliance with manufacturing 

standards; and 

4. the relationship between certain factors and shortages in the sterile 

injectable drug market.

To examine trends in recent drug shortages, we analyzed data from the 

University of Utah Drug Information Service (UUDIS) to identify drugs that 

were in short supply from January 2010 through December 2015, which 

were the most recent data available at the time we conducted our work.7

These data are generally regarded as the most comprehensive and 

reliable source of drug shortage information for the time period we 

reviewed. Although UUDIS and FDA both track and maintain information 

about drug shortages, we used the data maintained by UUDIS because 

 5

FDA’s review and approval of an application is required before a drug can be marketed 

for sale in the United States. In addition, FDA review and approval is required for certain 

changes to the original application—such as changes to the product manufacturing 

location or process, type or source of active ingredients, or the product’s labeling—if the 

change has a substantial potential to adversely affect the drug product’s identity, strength, 

quality, purity, or potency. We use the term “submission” to refer to both applications and 

supplemental applications submitted to FDA.

6

Pub. L. No. 112-144, § 1008, 126 Stat. 993, 1107 (2012).

7

Our analysis focuses on shortages of prescription drugs, so we excluded shortages of 

over-the-counter drugs, biologics (including vaccines), medical devices, and orallyadministered vitamins from our analysis even though UUDIS also tracks and includes 

these shortages in its data. UUDIS broadly defines a shortage as a supply issue that 

affects how pharmacies prepare and dispense a product or that influences patient care 

when prescribers must choose an alternative therapy because of supply issues. 
Page 4 GAO-16-595 Drug Shortages

part of the time period we reviewed predates FDA’s establishment of a 

data tracking system. (See app. I for a comparison of FDA and UUDIS 

drug shortage data.) UUDIS’s data are also what we used in preparing 

our 2011 and 2014 reports on drug shortages.8 We reviewed all UUDIS 

data used for reasonableness, outliers, and consistency, and based on 

our review, determined that the data were sufficiently reliable for our 

purposes. We also obtained information from representatives of the 10 

national associations representing health care providers, including 

physicians and pharmacists that we interviewed for our 2014 report 

regarding their experiences with drug shortages in recent years.9 We 

asked them to respond to open-ended questions and did not 

independently validate their responses.

To examine FDA’s prioritization of reviews of drug submissions to 

address drug shortages, we analyzed data from FDA’s Document 

Archiving, Reporting, and Regulatory Tracking System on all 

submissions—drug applications and drug application supplements—for 

which FDA prioritized its review to address drug shortages. Specifically, 

we analyzed all the submissions that FDA received and prioritized for this 

reason from January 2010 through July 2014, the most recent data 

available when we began our analysis. In response to a shortage or 

potential shortage of one drug, FDA can prioritize more than one 

submission. To examine FDA’s prioritization process in greater detail, we 

selected a subset of the prioritized submissions. To select this subset, we 

first identified all submissions for which FDA prioritized its review during a 

shorter time period—January 2013 through June 2013.10 As we used the

drug as the unit of analysis, we next identified the number of drugs 

associated with those prioritized submissions.

11 The submissions that 

FDA prioritized for review during this shorter time period were associated 

with 38 drugs. Finally, as FDA may have prioritized its review of other 

submissions related to these 38 drugs outside of this short time frame, we 

 8

See GAO-12-116, 2, and GAO-14-194, 2. 

9

See GAO-14-194, 64. 

10We focused on this shorter time period as the initial step for selecting the subset 

because it would allow for a reasonably sufficient amount of time to elapse for FDA to 

have completed its review of these submissions and for the shortages associated with 

them to have been prevented or resolved. 

11For the purposes of our analysis, we consider a drug to be a unique combination of 

active ingredient and dosage form (e.g., acyclovir sodium injection). 
Page 5 GAO-16-595 Drug Shortages

identified any additional submissions for these drugs for which FDA 

prioritized its review from January 2010 through July 2014. In total, the 38 

drugs were associated with 153 prioritized submissions. We compared 

the data on these prioritized submissions to FDA’s drug shortage data, 

which include information on actual shortages and shortages FDA 

classifies as prevented, to determine whether at least one submission for 

each drug may have contributed to the prevention or resolution of a 

shortage of the drug. For the purposes of this analysis, we determined 

that a submission may have contributed to the prevention or resolution of 

a shortage if it was approved before the shortage of that drug was 

prevented or resolved. The status of each submission—such as whether 

FDA had approved it or whether it was still under review at FDA—was as 

of October 30, 2014, the date FDA extracted the data.12 To assess the 

reliability of FDA’s prioritized review data and drug shortage data we 

reviewed related documentation, interviewed knowledgeable agency 

officials, and reviewed the data for missing information, discrepancies, or 

logical errors. We found these data sufficiently reliable for the purposes of 

our report. Lastly, we reviewed FDA guidance and policies regarding 

prioritized reviews and interviewed relevant FDA officials about the 

agency’s approach to prioritizing reviews of submissions to address 

shortages.

To examine trends in FDA warning letters issued to sterile injectable drug 

establishments for noncompliance with manufacturing standards, we 

obtained 2009 and 2014 drug registration and listing data from FDA to 

identify all foreign and domestic establishments that were listed as 

 12The data we analyzed may understate the number of submissions that FDA prioritized 

prior to October 2013, because, according to FDA officials, reviewers were not required to 

record all types of submissions that had been prioritized to address shortages before that 

time. There also may have been submissions relevant to shortages that FDA did not 

prioritize, but the information obtained from FDA did not permit us to identify such 

instances. 
Page 6 GAO-16-595 Drug Shortages

manufacturing at least one sterile injectable product.13 We also obtained 

inspection data from FDA’s Field Accomplishments and Compliance 

Tracking System on drug manufacturing establishment inspections that 

were conducted from October 2006 through September 2013. Using the 

registration and listing data, we identified inspections of foreign and 

domestic establishments manufacturing sterile injectable drugs and noninjectable drugs.14 We also obtained data on warning letters citing noncompliance with manufacturing standards that were issued to human drug 

manufacturing establishments following inspections conducted from 

October 2006 through September 2013. Using the registration and listing 

data, we identified warning letters issued to foreign and domestic 

establishments manufacturing sterile injectable drugs and non-injectable 

drugs.15 To assess the reliability of FDA’s drug registration and listing, 

inspection, and warning letter data, we reviewed related documentation, 

interviewed knowledgeable agency officials, and performed electronic 

data testing for missing information, outliers, or logical errors. For our 

 13Domestic and foreign establishments that manufacture drugs for the U.S. market are 

required to register annually with FDA and to provide a list of drugs they manufacture. 21 

U.S.C. § 360(b), (i)(1), (j)(1). Our use of registration and listing data to identify sterile 

injectable drug manufacturing establishments may overstate the number of such 

establishments if (1) an establishment listed that it manufactured a sterile injectable drug 

for the U.S. market, but did not actually do so, or (2) an establishment discontinued the 

manufacture of its sterile injectable products, but did not report that to FDA as required, or 

(3) an establishment only manufactured a sterile injectable drug for part of our time frame, 

as we categorized an establishment as one marketing sterile injectable drugs if it was 

listed as the manufacturing location of at least one sterile injectable drug at any point 

during our time frame. At the same time, our use of these data may understate the 

number of such establishments if an establishment manufactured a sterile injectable drug 

for the U.S. market, but failed to register and list that drug. FDA officials were unable to 

quantify the extent to which registration and listing data may erroneously include or 

exclude sterile injectable drug manufacturing establishments. 

14If an establishment was listed as the manufacturing location of at least one sterile 

injectable product, we classified that establishment as a sterile injectable establishment 

and inspections of that establishment as sterile injectable establishment inspections. 

However, establishments may manufacture multiple dosage forms, including sterile 

injectable drugs and non-injectable drugs, such as tablets or ointments. Therefore, our 

count of sterile injectable establishment inspections may be an overcount if FDA focused 

on the manufacture of non-injectable drugs during inspections of establishments 

manufacturing both dosage forms. 

15As with our inspection data, if an establishment was listed as the manufacturing location 

of at least one sterile injectable product, we classified warning letters issued to that 

establishment as sterile injectable warning letters. Therefore, our count of sterile injectable 

warning letters may be an overcount if the violations listed in a warning letter were related 

to an establishment’s non-injectable manufacturing processes only. 
Page 7 GAO-16-595 Drug Shortages

inspection and warning letter data we also compared our counts to 

published data and compared a selection of our warning letter data to 

source documents. We found all of these data sufficiently reliable for our 

purposes. We also analyzed UUDIS data on shortages of sterile 

injectable drugs from October 2006 to September 2013. In addition to 

analyzing these data, we interviewed FDA officials and reviewed FDA 

policies and procedures related to selecting establishments for inspection, 

conducting inspections, classifying the results of establishment 

inspections, and issuing warning letters. Finally, FDA and others have 

linked seven major sterile injectable manufacturing establishments to 

widespread shortages.16 For this group of seven establishments, we 

examined materials related to the recommendation for, internal review of, 

and issuance of all warning and untitled letters associated with

inspections of these establishments conducted from October 2006 

through September 2013.17

To examine the relationship between certain factors and sterile injectable 

drug shortages, we used data from IMS Health to identify all sterile 

injectable anti-infective and cardiovascular drugs with sales—118 drugs 

total—from 2010 through 2014, the most recent data available when we 

began our analysis. We chose these two therapeutic classes of drugs 

because they both have been subject to multiple and prolonged 

shortages and prior studies have focused on other classes such as 

oncology.18 We estimated a regression model using 3 years of shortage 

history for each drug in our study to examine the relationship between 

whether a drug was in shortage during 2012, 2013, or 2014 (dependent 

variable), and four factors (the explanatory variables). We based our 

dependent variable for drug shortages on UUDIS data. We classified a 

drug as being in shortage if it was in shortage any time during a given 

 16The seven establishments are Ben Venue Laboratories, Inc., establishment in Bedford, 

OH; Fresenius Kabi USA, LLC, establishment in Grand Island, NY; Hospira, Inc., 

establishments in Rocky Mount, NC, and Clayton, NC; Luitpold Pharmaceuticals, Inc., 

establishment in Shirley, NY; Sandoz Canada, Inc., establishment in Boucherville, 

Quebec, Canada; and Teva Parenteral Medicines, Inc., establishment in Irvine, CA.

17FDA issues untitled letters when serious violations of manufacturing standards are 

found, but the violations do not meet the threshold of regulatory significance for a warning 

letter.

18As part of our work we spoke to representatives of the American College of Cardiology 

and the Infectious Diseases Society of America who confirmed that shortages of these 

drugs have been consistently problematic in recent years.
Page 8 GAO-16-595 Drug Shortages

calendar year, including shortages that started in a prior year and 

remained ongoing. We used IMS Health data to create three of the binary 

explanatory variables: sales of a generic version, a decline in the number 

of suppliers, and price decline.19 We created the fourth binary explanatory

variable, noncompliance with manufacturing standards by an 

establishment that resulted in the receipt of a warning letter, using FDA’s 

drug registration and listing data and warning letter data. This is a unique 

explanatory variable that provides a direct measure of compliance with 

FDA’s manufacturing standards. See appendix II for more on the data 

sources and methodology for this analysis. We took several steps to 

ensure that the data used to produce this analysis were sufficiently 

reliable. Specifically, we assessed the reliability of the IMS Health 

National Sales PerspectivesTM data by interviewing officials at IMS Health. 

We also reviewed relevant documentation and examined the data for 

obvious errors, such as missing values and values outside of expected 

ranges. 

Our analysis of the relationship between certain factors and drug 

shortages has some limitations. First, our findings are limited to data for 

sterile injectable anti-infective and cardiovascular drugs that were 

marketed and sold from 2010 through 2014 and shortages in these two 

therapeutic classes from 2012 through 2014. Our findings are not 

generalizable to drugs in other routes of administration, other therapeutic 

classes, or shortages during other time periods. Second, missing 

manufacturing location data may have caused us to underestimate or 

overestimate the relationship between shortages and noncompliance with 

manufacturing standards resulting in a warning letter. For the drugs in our 

study that were missing manufacturing location data, we could not always 

identify whether the drugs were manufactured by at least one 

establishment that received a warning letter. Therefore, we may have 

misclassified some drugs that were manufactured by establishments that 

received a warning letter as drugs manufactured by establishments that 

did not receive a warning letter. Whether we may have overestimated or 

underestimated the relationship depends on whether the potentially 

 19We use the term “supplier” to describe the company name on drug labels. The company 

whose name is on the drug label may or may not be the same as the manufacturer of the 

drug. A drug’s supplier could be different from its manufacturer if the labeler is actually a 

repackager, a distributor, the parent company of the manufacturer, or if the supplier 

contracts with another manufacturer—known as a contract manufacturer—to produce the 

drug on the supplier’s behalf.
Page 9 GAO-16-595 Drug Shortages

misclassified drugs were in shortage. If these potentially misclassified 

drugs were in shortage, our model may underestimate the relationship 

between shortages and receipt of a warning letter. If these potentially 

misclassified drugs were not in shortage, our model may overestimate the 

relationship between shortages and receipt of a warning letter. The extent 

to which we may have underestimated or overestimated this relationship 

is unclear. For 57 of the 118 drugs in our study, we found partial 

manufacturing location data, and for 3 drugs we found no manufacturing 

location data. We were not able to identify these data for drugs if the IMS 

data did not include a national drug code for a particular product or if the 

manufacturer was not listed in FDA’s drug registration and listing data. 

We conducted this performance audit from June 2014 to July 2016 in 

accordance with generally accepted government auditing standards. 

Those standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our 

findings and conclusions based on our audit objectives. We believe that 

the evidence obtained provides a reasonable basis for our findings and 

conclusions based on our audit objectives.

FDA’s approval is required before brand-name drugs and generic drugs 

can be marketed for sale in the United States.20 To obtain FDA’s approval 

to market a brand-name drug, sponsors must submit a new drug 

application (NDA) containing data on the safety and effectiveness of the 

drug as determined through clinical trials and other research. To obtain 

FDA’s approval to market a generic drug, sponsors must submit an 

abbreviated new drug application (ANDA). The ANDA must contain data 

showing, among other things, that the generic drug is bioequivalent to, or 

performs in the same manner as, a drug approved through the NDA 

process.21 If a sponsor wants to change any part of its original NDA or 

ANDA after its approval—such as changes to manufacturing location or 

process, the type or source of active ingredients, or the labeling—it must 

generally submit an application supplement to notify FDA of the change. If 

 2021 U.S.C. § 355(a). 

2121 U.S.C. § 355(j).

Background

FDA’s Oversight of Drugs
Page 10 GAO-16-595 Drug Shortages

the change has a substantial potential to adversely affect factors such as 

the identity, strength, quality, purity, or potency of the drug, the sponsor 

must obtain FDA approval.

22 As part of the application and application 

supplement review process, FDA may conduct an inspection of the 

establishment where the drug will be manufactured to verify the accuracy 

and authenticity of the data contained in the application, to determine that 

the establishment is following commitments made in the application, and 

to verify that the establishment is prepared to make the drug named in the 

application or supplement. 

After approving brand-name and generic drugs for marketing in the 

United States, FDA’s oversight responsibilities continue, as it is charged 

with monitoring their safety, effectiveness, quality, and promotion. FDA 

periodically inspects drug manufacturing establishments, including those 

manufacturing brand-name, generic, and over-the-counter drugs to 

assess their ongoing compliance with current good manufacturing 

practice regulations.23 In addition to these surveillance inspections, FDA 

may also conduct for-cause inspections when the agency receives 

information indicating problems in the manufacture of marketed drugs, 

among other reasons. FDA may conduct an inspection that includes 

multiple components (e.g., both preapproval and surveillance) during a 

single visit to an establishment. Based on the agency’s findings during an 

inspection, FDA classifies the inspection as either (1) no action indicated, 

when insignificant or no deficiencies were identified; (2) voluntary action 

indicated, when deficiencies were identified and must be corrected, but 

the agency is not prepared to take regulatory action; or (3) official action 

indicated, when serious deficiencies were found that warrant regulatory 

action. 

Specifically, if FDA identifies a violation of law or regulations during an 

inspection and therefore finds the establishment to be out of compliance 

with manufacturing standards, the agency may issue a warning letter. 

FDA issues warning letters when the agency has identified violations that 

may lead to enforcement action if not promptly and adequately corrected. 

Recommendations to issue a warning letter are either made by staff in 

FDA’s district offices or by staff in FDA’s Center for Drug Evaluation and 

 2221 C.F.R. §§ 314.70, 314.97 (2015). 

23See 21 C.F.R. pts. 210-211.These regulations provide a framework for a manufacturer 

to follow to produce safe, pure, and high-quality drugs. 
Page 11 GAO-16-595 Drug Shortages

Research. Multiple levels of the Center’s staff review all warning letter 

recommendations. It is FDA policy to consider many factors in 

determining whether to issue a warning letter. For example, the agency is 

to consider the compliance history of the establishment, the nature of the 

violation (e.g., whether the establishment was aware of the violation, but 

failed to correct it), and the risk associated with the product and the 

impact of the violation on such risk. FDA is also to consider corrective 

actions taken or promised by the establishment since the inspection, and 

it may decide not to issue a letter if an establishment’s corrective actions 

are adequate and the violations that would have supported the letter have 

been corrected. To determine whether actions planned or taken by an 

establishment to correct violations are adequate FDA may, among other 

activities, review documentation describing proposed or completed 

corrective actions or hold meetings with representatives of the 

establishment to discuss these actions. FDA is also required by law to 

consider whether issuing the warning letter could reasonably cause or 

exacerbate a shortage of a life-saving drug.24 If it determines a shortage 

could occur or an existing shortage could worsen, the agency must 

evaluate the risks associated with the impact of such a shortage upon 

patients and the risks associated with the violation before taking action, 

unless there is an imminent risk of serious health consequences or death 

from not taking action. Once issued, warning letters are publicly posted 

on FDA’s website. 

FDA’s Drug Shortage Staff (DSS) coordinates the agency’s response to 

drug shortages. FDA is notified of actual and potential drug shortages by 

manufacturers, health professionals, and the public.25 Once DSS 

becomes aware of a potential or actual shortage, DSS attempts to 

determine whether the total supply of the drug and any pharmaceutical 

equivalents is inadequate to meet demand. To verify that a shortage is in 

effect or a potential shortage is pending, DSS contacts all manufacturers 

of the drug to collect up-to-date information on the inventory and demand 

 2421 U.S.C. § 356c(b)-(c). The law defines a life-saving drug as one that is life supporting, 

life sustaining, or intended for use in the prevention or treatment of a debilitating disease 

or condition. 

25Manufacturers must 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. 

21 U.S.C. § 356c.

FDA Oversight of Drug 

Shortages
Page 12 GAO-16-595 Drug Shortages

for the drug and manufacturing schedules. DSS also analyzes market 

research data from IMS Health to compare current supply of the drug with 

historical demand. 

DSS coordinates as needed with several other FDA offices including the 

Office of Generic Drugs and the Office of Compliance to address drug 

shortages. Once DSS verifies a shortage or potential shortage of a drug, 

it may seek assistance from these offices to address that shortage, 

including the following:

• identifying the extent of the shortage and determining whether other 

manufacturers are willing and able to increase production of the 

shortage drug;

• prioritizing reviews of drug applications, supplements, and inspections 

for manufacturers attempting to restore, increase, or begin production 

of the shortage drug; and 

• applying regulatory discretion, such as refraining from taking 

enforcement action to stop the distribution of a drug that is in shortage 

despite a labeling or quality issue.

For example, DSS provides the Office of Generic Drugs with drug 

shortage information so that the office can identify ANDAs or ANDA 

supplements it can prioritize its review of to address a shortage. 

While there are a number of steps FDA can take to address a shortage, 

FDA cannot require manufacturers to start producing or continue to 

produce 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. Finally, FDA 

cannot control the prices of marketed drugs.

In our February 2014 report, we identified unique characteristics of the 

sterile injectable drug industry that may make these drugs susceptible to 

shortages.26 These characteristics include limited inventory, need for 

regulatory approval, production complexity, and constrained 

manufacturing capacity.

 26GAO-14-194.

Characteristics of the 

Sterile Injectable Drug 

Industry 
Page 13 GAO-16-595 Drug Shortages

• Limited inventory. The widespread use of “just-in-time” inventory 

practices can increase the vulnerability of the supply chain to 

shortages. For example, according to one manufacturer 

representative, manufacturers typically have about 2 to 3 months of 

inventory on hand, wholesale distributors usually have about 1 month, 

and providers only have a few weeks of inventory. Consequently, 

when a manufacturer stops production, a shortage can result quickly. 

• Regulatory approval. New manufacturers may not be able to quickly 

enter the market to produce a drug in shortage because FDA’s 

approval of an ANDA—which can take more than a year—is required. 

Further, even existing manufacturers of the drug need FDA approval 

of changes to manufacturing conditions or processes that have a 

substantial potential to adversely affect factors such as the identity, 

strength, quality, purity, or potency of the drug before the drug 

manufactured under the new conditions or processes can be 

marketed. For example, FDA approval of an application supplement 

may be required for changes in location of a manufacturing site or the 

source of the raw materials or components for manufacturing a drug. 

• Production complexity. Costly, specialized equipment is required to 

manufacture prescription drugs and production processes are 

complex, particularly for sterile injectables.27 Maintaining sterility 

throughout the production process is challenging, yet it is particularly 

important for these drugs as serious injury can occur if contaminated 

drugs are injected into patients. Some generic sterile injectable drugs 

need to be manufactured on lines or in facilities dedicated solely to 

those drugs, thus creating challenges for new manufacturers to enter 

the market. We previously found that sterile injectable anti-infective 

and oncology drugs require lines, and sometimes whole facilities, that 

are limited to the production of such drugs. For example, some antiinfective drugs, such as penicillin, can trigger serious allergic 

reactions at very low levels and as a result, may be limited to specific 

manufacturing lines. 

• Constrained manufacturing capacity. The generic sterile injectable 

drug industry is highly concentrated and this limited manufacturing 

 27See Department of Health and Human Services, Office of the Assistant Secretary for 

Planning and Evaluation, Economic Analysis of the Causes of Drug Shortages

(Washington, D.C.: October 2011), 4.
Page 14 GAO-16-595 Drug Shortages

capacity has been challenged in recent years as the industry has 

expanded the number of generic products it manufactures. The 

pressures to produce a large number of drugs on only a few 

manufacturing lines leaves the manufacturers that do participate in 

the generic sterile injectable market with little flexibility when one 

manufacturer ceases production of a particular drug. For example, 

manufacturer representatives told us that manufacturing 

establishments schedule the production of each drug in their product 

line for specific time periods, often months in advance.28 An 

establishment that produces a particular drug may not be able to 

produce additional quantities in response to a shortage until the next 

time the particular product is scheduled for production—which could 

be months after a shortage begins.29 If a manufacturing establishment 

has available production capacity, the manufacturer also faces risks 

when deciding to ramp up production to address a shortage. In 

particular, one manufacturer representative said that manufacturers 

do not know how long their competitors will be out of the market. If the 

manufacturer that left the market quickly restarts production of the 

drug, the manufacturer that made the investment to ramp up 

production to address the shortage may face a financial liability if it is 

unable to sell the additional product it manufactured. 

Another capacity-related issue is that the company whose name is on 

the drug label, which we term the supplier, may or may not be the 

same as the company that actually manufactures the drug. Rather 

than produce the drug themselves, some suppliers enter into a 

relationship with a contract manufacturer to produce the drug on their 

 28We previously found that multiple drugs are often manufactured on the same production 

line, so increasing production of one drug could reduce the supply of other drugs. For 

example, one manufacturer representative told us that there are usually anywhere from 30 

to 50 different drugs manufactured on a given line. GAO-14-194, 29. 

29We previously found that it can take as much as 3 months to increase production due to 

the complexity of manufacturing sterile injectable drugs. In addition to the capacity 

constraints that result from manufacturing a large number of drugs on only a few 

manufacturing lines, we previously found that suppliers do not typically have redundant 

manufacturing facilities. See GAO-14-194, 28-31, for further discussion of this and other 

capacity constraints. 
Page 15 GAO-16-595 Drug Shortages

behalf.30 Therefore, the number of suppliers of a particular drug may

not be the same as the number of manufacturers of that drug.31 The 

number of suppliers could also be different than the number of 

manufacturers if the name on the drug’s label is that of a repackager, 

a distributor, or the parent company of the manufacturer. 

New drug shortages continue to be reported, although the number of new 

shortages each year has generally decreased since 2011. New shortages 

peaked in 2011 with 257 reported, while 136 new shortages were 

reported in 2015, a decrease of 47 percent from 2011. Meanwhile, since 

2012, the number of ongoing shortages (shortages that began in prior 

years) has remained high with over 250 ongoing shortages each year 

from 2012 through 2015.32 (See fig. 1.) As a result, the majority of drug 

shortages each year since 2012 have been ongoing shortages rather 

than newly reported shortages. For example, in 2015, 68 percent of the 

shortages (291 out of 427) were ongoing shortages that began in a prior 

year.33

 30One study found that in the sterile injectable market, drugs produced under contract 

manufacturing relationships are primarily brand-name drugs marketed by emerging 

companies without their own manufacturing establishments and that such drugs are 

generally made by manufacturers that already produce many generic drugs. See J. 

Woodcock and M. Wosinska, “Economic and Technological Drivers of Generic Sterile 

Injectable Drug Shortages,” Clinical Pharmacology & Therapeutics, vol. 93, no. 2 (2013), 

173.

31In addition, a single manufacturer may have multiple manufacturing establishments that 

produce a given drug. 

32We counted a shortage as a “new shortage” in the year UUDIS was initially notified of 

the shortage. We counted a shortage as an “ongoing shortage” in each year that it 

continued to be in shortage after the year it was first reported. For example, for a shortage 

of which UUDIS was notified in July 2013 and that continued uninterrupted until its 

resolution in March 2015 we would count it as a new shortage in 2013 and as an ongoing 

shortage in both 2014 and 2015.

33Though FDA identified far fewer shortages than UUDIS in 2015, the agency reported a 

similar trend to that seen in the UUDIS data in that new shortages have decreased and 

the majority of shortages in 2015 were ongoing shortages that began in a prior year. For 

2015, FDA identified 26 new shortages and 64 ongoing shortages that began prior to 

2015. See appendix I for more information about the differences between FDA’s and 

UUDIS’s drug shortage data.

New Drug Shortages 

Have Decreased 

Since 2011, but Many 

Shortages Persist for 

Multiple Years 
Page 16 GAO-16-595 Drug Shortages

Figure 1: Number of Drug Shortages from 2010 through 2015

Since 2013, the majority of the ongoing shortages in a given year were 

first reported at least 2 years earlier. (See fig. 2.) For example, in 2015, 

171 of the 291 ongoing shortages (59 percent) were first reported during 

2013 or an earlier year, while the remaining 120 ongoing shortages were 

first reported during 2014. 
Page 17 GAO-16-595 Drug Shortages

Figure 2: Duration of Ongoing Shortages from 2010 through 2015 

The duration of all shortages reported from January 2010 through 

December 2015 varied, ranging from 1 day to almost 6 years.34 Of these 

shortages, 65 percent lasted 1 year or less, while 12 percent lasted more 

than 3 years. The average duration of all shortages reported during this 

time period was 418 days. The fact that some shortages have lasted 3 or 

more years suggests that manufacturers and FDA have had difficulty 

addressing the issues behind these persistent shortages. For example, 

FDA stated that some drugs have been in shortage for multiple years 

because manufacturers have been unable to address the issues that led 

to the shortage or have chosen not to continue producing the drugs.

 34We excluded 30 of the 1,101 shortages reported from January 2010 through December 

2015 from this analysis of duration because UUDIS listed these shortages as lasting 0 

days. Almost all of these 30 shortages represented manufacturers’ decisions to 

discontinue production of the drug.
Page 18 GAO-16-595 Drug Shortages

The experiences of providers dealing with shortages every day generally 

supports the trend seen in the UUDIS data that shortages persist. In 

following up with representatives from the 10 national associations 

representing health care providers (including hospitals, physicians, and 

pharmacists) that we contacted for our 2014 report, we learned that 

shortages continue to affect providers’ ability to safely and effectively care 

for patients.35 Reflecting on their experiences with shortages in the last 2 

years, representatives of 6 of the 10 associations reported that shortages 

had remained constant or increased, 2 reported a decrease, and 2 others 

did not identify a trend in recent shortages, but noted that they were still a 

concern. 

FDA prioritized its review of 383 drug applications and supplements to 

address shortages from January 2010 through July 2014, 240 of which 

were for generic sterile injectable drugs. Our analysis of a subset of those 

submissions indicates that some were approved before the shortage was 

resolved. Although the timing of FDA’s approvals of submissions does not 

establish a causal link, it could indicate that prioritizing reviews may be a 

useful strategy in addressing some drug shortages. 

From January 2010 through July 2014, FDA prioritized its review of 383

submissions—applications and supplements to change approved drug 

applications—to address drug shortages. These submissions represent 3 

percent of all submissions that FDA received during this time period. 

Almost all of the submissions that FDA prioritized during this time period 

were ANDAs or ANDA supplements for generic drugs; the remaining few 

were NDA supplements for brand-name drugs. (See fig. 3.) 

 35GAO-14-194, 18-20.

FDA Prioritized 

Reviews of 383 

Submissions to 

Respond to Drug 

Shortages

FDA Prioritized Review of 

Both Drug Applications 

and Supplements to 

Address Shortages and 

the Majority Were for 

Generic Sterile Injectable 

Drugs
Page 19 GAO-16-595 Drug Shortages

Figure 3: Number of Submissions FDA Prioritized Its Review of to Address Drug 

Shortages, by Submission Type and Year Received, January 2010 through July 

2014

Further, the majority of the submissions for which FDA prioritized its 

reviews to address drug shortages were for generic sterile injectable 

drugs.36 Specifically, 63 percent (240) of the 383 submissions granted a 

prioritized review were for generic sterile injectable drugs, and an 

additional 4 percent (17) were for brand-name sterile injectable drugs. 

Twenty-four percent (92) of the prioritized submissions were for drugs in 

capsule or tablet form, while the remaining 9 percent (34) were for drugs 

in other dosage forms, such as ointments or patches.

 36This aligns with the characteristics of shortages from recent years as we previously 

reported that many shortages were of generic sterile injectable drugs. See GAO-14-194, 

15, and GAO-12-116, 19.
Page 20 GAO-16-595 Drug Shortages

Overall, FDA had completed at least one review cycle for approximately 

80 percent of the 383 prioritized submissions as of October 30, 2014.37

FDA’s review of a submission may span several review cycles before the 

agency makes a decision regarding its approval, and once the review of a 

submission is prioritized any subsequent reviews of it are also prioritized. 

An additional review cycle may occur if, for example, to ensure the safety 

and efficacy of the product, FDA asks a sponsor to supply additional data, 

analyses, or other information to address concerns identified in its 

review.38 According to FDA it has historically taken, on average, about 

four review cycles to approve an ANDA. As of October 30, 2014, 43 

percent (164) of the 383 prioritized submissions had been approved and 

FDA had completed at least one review for another 37 percent (140). The 

majority of submissions for which FDA had not completed a review cycle 

as of October 2014, were received in 2013 and 2014. See table 1 for the 

status of the 383 prioritized submissions FDA received from January 

2010 through July 2014. 

 37All data on the status of each submission for which FDA had prioritized reviews to 

address shortages is as of October 30, 2014, which is the date that FDA extracted the 

data from its database.

38For the purposes of this analysis, a complete review cycle includes reviews for which 

FDA has either issued an approval letter or a complete response letter. A complete 

response letter is a written communication to a sponsor from FDA usually describing all of 

the deficiencies that the agency has identified that must be satisfactorily addressed before 

the submission can be approved. After receiving a complete response letter a sponsor 

may address the deficiencies identified in the letter and resubmit the submission to FDA 

for another review. 
Page 21 GAO-16-595 Drug Shortages

Table 1: Status of Submissions FDA Received from January 2010 through July 

2014 and Prioritized Its Review of to Address Drug Shortages

Status of submission

Number of 

submissions

Percentage of 

submissions

Approved 164 43

FDA completed at least one review 

cycle 140 37

FDA had not yet completed one review 

cycle 64 17

Othera 15 4

Total 383 100b

Source: GAO analysis of Food and Drug Administration (FDA) data. | GAO-16-595

Notes: Our analysis does not reflect reviews that FDA completed or approvals made since October 

30, 2014.

a

The other category includes submissions that were withdrawn by the sponsor and ones that FDA 

refused to receive for review because it determined that such submissions were not sufficiently 

complete to permit a substantive review. 

b

The percentage column does not sum to 100 due to rounding.

For the submissions in our review that FDA approved as of October 30, 

2014, the time from when they were prioritized to approval varied by 

submission type. These review times ranged from 3 days to more than 3 

years for ANDA supplements and from 3 days to 6 months for NDA 

supplements.39 For ANDAs, review times ranged from 40 days to more 

than 3 years.40 See table 2 for the median time to approval for 

 39One of these ANDA supplements may be an outlier. It was approved more than 3.5 

years after its review was prioritized. The ANDA supplement with the next lengthiest time 

period from prioritization to approval had a time of slightly more than 2 years.

40In FDA’s Fiscal Year 2015 Generic Drug User Fee Amendments of 2012 Performance 

Report, FDA reported the average time from initial receipt to approval for all generic drug 

submissions received in fiscal years 2013 and 2014. For submissions that FDA received 

in fiscal year 2013, the average time from initial receipt to approval was 738 days for 

ANDAs and 322 days for ANDA supplements, and for submissions that FDA received in 

fiscal year 2014 it was 552 days for ANDAs and 226 days for ANDA supplements. 
Page 22 GAO-16-595 Drug Shortages

submissions that FDA received and prioritized its review of from January 

2010 through July 2014.41

Table 2: Median Time to Approval for Submissions that FDA Received from January 2010 through July 2014 and Prioritized Its 

Review of to Address Drug Shortages

Submission type (number approved)

Days from date prioritized to approval

Median days of FDA review 

Median days to approval 

(including FDA review and 

sponsor follow-up) 

Abbreviated new drug application (ANDA) supplements (n=70) 116 117

New drug application supplements (n=12) 54 54

ANDAs (n=71) 362 483

Source: GAO analysis of Food and Drug Administration (FDA) data. | GAO-16-595

Note: Median times to approval were calculated based on 153 of the 164 submissions that were 

approved as of October 30, 2014. FDA did not provide a date prioritized for 11 of the 164 prioritized 

submissions that had been approved, so those 11 submissions were excluded from the median times 

calculated.

If FDA does not approve a submission after the first review, it will provide 

sponsors with complete response letters seeking additional information 

that addresses deficiencies that FDA identified, making the time to 

approval longer. For 47 of the 71 approved ANDAs, FDA issued at least 

one complete response letter and therefore these ANDAs had more than 

one review cycle, with a range of two to five cycles. The remaining 24 

approved ANDAs were approved at the end of the first review cycle in 

which they were prioritized. Of the 70 approved ANDA supplements, 52 

were approved at the end of the first review cycle in which their review 

was prioritized, with the number of review cycles ranging from one to 

three. Of the 12 approved NDA supplements, 11 were approved at the 

end of the first review cycle that FDA prioritized. 

 41In fiscal year 2013 FDA began phasing in performance goals related to the Generic 

Drug User Fee Amendments of 2012, including goals related to generic drug submission 

review times. FDA does not have specific review time goals for the ANDAs and ANDA 

supplements in our analysis because the agency received all of these submissions prior to 

fiscal year 2015, the first year that these review time goals were phased in. FDA also has 

a goal of completing reviews of 90 percent of the substantial backlog of submissions that 

were pending FDA review at the start of fiscal year 2013 by the end of fiscal year 2017

and many of the submissions in our analysis are part of this backlog. 
Page 23 GAO-16-595 Drug Shortages

Lastly, FDA prioritized its review of submissions to address drug 

shortages for many different sponsors and sometimes for more than one 

submission per drug during this time period. 

• The 383 prioritized submissions came from 107 different sponsors. 

The number of prioritized submissions for any given sponsor ranged 

from 1 to 24. The majority of these sponsors (69 percent) had 1 to 2 

submissions prioritized, and 9 percent of the sponsors had more than 

10 submissions prioritized.

• The 383 prioritized submissions were associated with 160 drugs. The 

number of submissions for each drug ranged from 1 to 16. Multiple 

submissions for a single drug were typically from multiple sponsors 

seeking approval to market the drug. Seventy percent of these drugs 

were associated with 1 to 2 prioritized submissions, while 6 percent 

were associated with 7 or more prioritized submissions. 

Our analysis of a subset of the 383 submissions, consisting of 153 

submissions that were associated with 38 drugs, suggests that FDA’s 

prioritization of submissions may be helpful in addressing some drug 

shortages.42 To examine this strategy, we reviewed the following:

• Relationship between submissions and shortage prevention or 

resolution. When we examined the subset of prioritized submissions 

that were associated with 38 drugs, we found that 15 of the drugs 

were associated with at least one prioritized submission that was 

approved before the shortage was resolved or a potential shortage 

was prevented. The timing of FDA’s approvals of these submissions 

suggests that this strategy may have contributed to addressing 

shortages of these 15 drugs, although it does not establish a causal 

link. Specifically, the approved submissions for these 15 drugs may 

have helped resolve 12 shortages, prevent 2 shortages, and mitigate 

1 shortage. These approved submissions were for drugs in several 

therapeutic classes (including anti-infective, oncology, and central 

nervous system drugs) and used to treat a variety of conditions 

(including bacterial infections, breast cancer, and attention deficit 

hyperactivity disorder). Conversely, another 13 of the 38 drugs did not 

have any prioritized submissions approved prior to the shortage 

 42For these 38 drugs, the number of submissions that FDA prioritized for an individual 

drug ranged from 1 to 14.

Analysis of a Subset of 

Drug Submissions 

Suggests that Prioritization 

Can Be Helpful In 

Preventing or Resolving 

Some Drug Shortages 
Page 24 GAO-16-595 Drug Shortages

resolution or prevention date, so submissions for those drugs could 

not have contributed to addressing a shortage. However, for 9 of 

these 13 drugs at least one prioritized submission was approved after 

the shortage was resolved or prevented, which FDA determined may 

have helped to reduce supply vulnerabilities and prevent future 

shortages. In addition, submissions for 2 of the 38 drugs were not 

approved as of October 2014 and the shortages the submissions 

were prioritized to address remained active. Finally, the submissions 

for 8 of the 38 drugs were not associated with a specific shortage at 

the time of prioritization, although the majority of these drugs had 

previously been in shortage or were otherwise vulnerable to shortage. 

(See table 3.) 

Table 3: Summary of Relationship between Submissions Prioritized by FDA for 38 Selected Drugs and Drug Shortages 

Relationship to shortages Number of drugs Percentage of drugs

Prioritized submission approved before a shortage was prevented or resolved, which 

suggests it may have contributed to addressing a shortagea 15 39

Shortage prevented or resolved before any prioritized submissions approved that could 

have helped address the shortage 13 34

No prioritized submissions approved that could have helped address the shortage and 

shortage was active as of October 30, 2014 2 5

No active or imminent shortage to address at time of prioritization, but drug vulnerable to 

shortage 8 21

Total 38 100b

Source: GAO analysis of Food and Drug Administration (FDA) data. | GAO-16-595

Notes: All data on the status of submissions was as of October 30, 2014. Our analysis does not 

reflect any reviews that FDA has completed or approvals made that may have occurred since that 

date. 

a

One of the drugs in this category had a prioritized submission approved that may have helped to 

mitigate the shortage with which it was associated. However, that shortage remains active. 

b

The percentage column does not sum to 100 due to rounding.

• Time to approval for approved submissions. The median time to 

approval from the date prioritized differed for the 26 submissions that 

may have contributed to the prevention or resolution of a shortage, 

compared to the 24 submissions approved after the associated 

shortage was prevented or resolved.43 This difference was more 

 43Median times to approval were calculated based on the submissions associated with the 

subset of 38 drugs that were approved as of October 30, 2014. The time to approval 

calculation includes both 1) the time that the submission was under review at FDA and 2) 

any time the submission was with the sponsor, so the sponsor could follow up on 

deficiencies FDA had identified in its review. 
Page 25 GAO-16-595 Drug Shortages

pronounced for ANDAs than for supplements. Specifically, the median 

time to approval for ANDAs that may have helped to prevent or 

resolve a shortage was almost 4 months faster than it was for ANDAs 

that were not approved until after the prevention or resolution of the 

associated shortage.

• For the 26 submissions that may have contributed to the 

prevention or resolution of a shortage, the median time to 

approval was 494 days for ANDAs and 87 days for supplements.44

• For the 24 submissions that were not approved until after the 

associated shortage was prevented or resolved, the median time 

to approval was 613 days for ANDAs and 80 days for 

supplements.

Given that the median time to approval for prioritized ANDAs is over a 

year, prioritizing reviews of ANDAs to address drug shortages is generally 

not a strategy for addressing shortages in the short term. However, this 

strategy may be useful to address drug shortages that have persisted 

across multiple years or recurred multiple times in a few years. This may 

also be a helpful approach if FDA is notified as early as possible about 

potential shortages. FDA’s drug shortages strategic plan states that early 

notification of potential supply disruptions is critical because it puts the 

agency in a better position to use all of its available strategies to address 

drug shortages, including prioritizing its reviews of ANDAs from sponsors 

who want to enter the market for a drug that is vulnerable to shortage or 

already in shortage.45 The success of this strategy, however, also 

depends on whether sponsors are willing or able to submit ANDAs for 

drugs that are vulnerable to shortage or already in shortage, which is 

beyond FDA’s control. 

 44Of the 153 prioritized submissions in the subset we analyzed, 62 were approved as of 

October 30, 2014. Of these approved submissions, 9 were associated with drugs for 

which there was no shortage active at the time of prioritization but FDA considered the 

drugs to be vulnerable to shortage. The median time to approval for these 9 submissions 

was 895 days for ANDAs and 385 days for supplements. An additional 2 submissions 

were approved before the shortage of the drug they were associated with even began, so 

these were not counted as having helped to prevent or resolve a shortage and we did not 

calculate review times for them. Finally, we also did not calculate a review time for 1 other 

submission because FDA did not provide the date it prioritized the submission.

45See Food and Drug Administration, Strategic Plan for Preventing and Mitigating Drug 

Shortages (October 2013).
Page 26 GAO-16-595 Drug Shortages

The number of warning letters FDA issued annually to sterile injectable 

drug manufacturing establishments found to be out of compliance with 

manufacturing standards generally increased from fiscal year 2007 

through fiscal year 2013. The number of letters issued ranged from 1 

letter resulting from an inspection conducted in fiscal year 2007, to 11 

letters resulting from fiscal year 2010 inspections and another 11 letters 

resulting from fiscal year 2011 inspections. In addition, FDA issued a 

growing number of such letters to non-injectable drug establishments, 

ranging from 16 letters resulting from fiscal year 2007 inspections to 45 

letters resulting from fiscal year 2010 inspections and another 45 letters 

resulting from fiscal year 2011 inspections.46

Although the number of warning letters issued increased, the percentage 

of inspections that resulted in warning letters in a given year remained 

relatively small. One percent of FDA’s fiscal year 2007 inspections of 

sterile injectable drug establishments resulted in the issuance of warning 

letters, compared with 5 percent of such inspections in fiscal years 2010 

 46From fiscal year 2007 through 2013, FDA generally increased its inspections of foreign 

manufacturing establishments. To the extent that foreign establishments were historically 

inspected less frequently than their domestic counterparts, FDA may have been more 

likely to identify violations of manufacturing standards when they did conduct inspections 

at foreign establishments. Warning letters issued to foreign establishments appear to drive 

the increase in warning letters in some years, but not others.

Number of Warning 

Letters FDA Issued to 

Sterile Injectable 

Drug Establishments 

Increased, Including 

Letters to 

Establishments 

Linked to Widespread 

Shortages 

Number of Warning 

Letters FDA Issued to 

Sterile Injectable Drug 

Manufacturers Increased, 

but the Percentage of 

Inspections Resulting in 

Letters Was Relatively 

Small 
Page 27 GAO-16-595 Drug Shortages

and 2011. (See fig. 4.) The percentage of inspections of non-injectable 

drug establishments that resulted in warning letters was similar, ranging 

from 1 percent of fiscal year 2007 inspections to 4 percent of fiscal year 

2013 inspections.

Figure 4: Number of Sterile Injectable Drug Establishment Inspections and 

Percentage Resulting in Warning Letters for Noncompliance with Manufacturing 

Standards, Fiscal Years 2007 through 2013

As the number of warning letters issued to sterile injectable drug 

establishments for noncompliance with manufacturing standards 

generally increased from fiscal year 2007 through fiscal year 2013, so did 

shortages of these drugs. (See table 4.) Both the number of warning 

letters and the number of shortages were particularly high in fiscal years 

2010 and 2011. While a corresponding rise in warning letters and 

shortages in certain years could reflect an increase in FDA inspection 

rigor, as was suggested by some sources in the literature review 

conducted for our prior report, it could also indicate growing 
Page 28 GAO-16-595 Drug Shortages

manufacturing problems.47 Such problems could lead to shortages as 

establishments recalled defective products or shut down or slowed 

production to correct manufacturing problems. What is not known is 

whether establishments experiencing such manufacturing problems 

would have shut down or slowed production in the absence of an FDA 

warning letter.48

Table 4: Number of New Shortages of Sterile Injectable Drugs and Warning Letters 

Issued to Sterile Injectable Drug Establishments for Noncompliance with 

Manufacturing Standards, Fiscal Years 2007 through 2013 

Fiscal year

Number of new 

shortages

Number of warning letters related to 

inspections conducted in this fiscal year 

2007 54 1

2008 84 5

2009 61 6

2010 130 11

2011 147 11

2012 88 5

2013 74 8

Source: GAO analysis of University of Utah Drug Information Service and Food and Drug Administration data. | GAO-16-595

Note: The number of warning letters issued to non-injectable drug establishments for inspections 

conducted from fiscal year 2007 through 2013, by fiscal year of associated inspection, is as follows: 

16, 26, 28, 45, 45, 22, and 42.

FDA officials disputed the notion that the agency’s issuance of warning 

letters to establishments found to be out of compliance with 

manufacturing standards caused shortages. First, FDA officials noted that 

some shortages are unrelated to manufacturing problems and therefore 

could not have been caused by FDA’s issuance of warning letters for 

manufacturing violations. This notion is consistent with our prior analysis 

of FDA shortage data, which found that from January 2011 through June 

2013, 30 percent of shortages were reportedly caused by issues 

unrelated to manufacturing, such as increased demand or unavailability of 

 47GAO-14-194, 23. 

48FDA issues warning letters when it identifies violations that, if not promptly and 

adequately corrected, may lead the agency to take enforcement actions, such as seeking 

court action to stop an establishment from manufacturing and distributing a product until 

the violation is corrected.
Page 29 GAO-16-595 Drug Shortages

raw materials or components.49 Second, although the agency does have 

other enforcement powers to stop distribution of a product, FDA officials 

stated that warning letters issued for noncompliance with manufacturing 

standards do not order a stop in production or distribution.50 Finally, FDA 

officials stated that it is important to put warning letter data in perspective 

by considering the reason that FDA conducted the inspections that 

resulted in warning letters. According to FDA officials, if the inspections 

that resulted in warning letters were inspections with a for-cause 

component and thus were conducted to investigate potential 

manufacturing problems, then any underlying manufacturing problems 

that led to the warning letter could also have caused shortages.51 For 

example, officials told us that during this time frame, inspections of sterile 

injectable drug manufacturers were often conducted because of reports of 

problems with particulates, such as a number of voluntary recalls 

conducted in response to glass fragments in sterile injectable drugs in 

2010 and 2011.

52

Our analysis of 7 years of FDA data on inspection type does not reveal a 

clear trend in terms of the relationship between shortages, warning 

 49GAO-14-194, 27. 

50FDA enforcement actions to stop distribution include denying approval of an application, 

blocking import entry, seizing or arresting a regulated article before or while in distribution, 

or working with the Department of Justice to obtain a court order to stop production.

51FDA primarily selects establishments for preapproval inspections (conducted as part of 

its review of applications to market new drugs) or for surveillance inspections (to 

determine ongoing compliance with laws and regulations in the manufacture of drugs 

already on the market). However, the agency also initiates for-cause inspections to 

investigate consumer complaints, reports of product quality defects submitted by 

consumers or health care professionals, or indications of potential manufacturing 

problems submitted by the manufacturers themselves through field alert reports, among 

other reasons. Manufacturers of brand-name and generic drugs are required to submit 

field alert reports to FDA within 3 working days of receipt of information concerning any 

bacteriological contamination, any significant chemical, physical, or other change or 

deterioration in a distributed drug product, any failure of one or more distributed batches of 

drug product to meet the specifications established for it in the drug application, or any 

incident that causes the drug product or its labeling to be mistaken for another drug 

product. 21 C.F.R. § 314.81(b)(1) (2015). According to FDA, the intent of such reports is 

to establish an early warning system to the agency in order to prevent potential safety 

hazards.

52Our prior analysis of FDA data showed that from January 2011 through June 2013, the 

reported cause of 40 percent of shortages were quality problems, such as the 

identification of bacterial contamination or particulate matter. GAO-14-194, 27. 
Page 30 GAO-16-595 Drug Shortages

letters, and one indication of potential manufacturing problems—the 

frequency of inspections with a for-cause component. 53 Our analysis 

shows that between fiscal years 2007 and 2013 the percentage of 

inspections with a for-cause component was consistently higher for sterile 

injectable drug manufacturing establishments than it was for noninjectable establishments. (See fig. 5.) FDA officials told us that they 

evaluate the health hazards of all reports of potential manufacturing 

problems that they receive. However, because of the potentially serious 

health consequences of using a sterile product that has been 

contaminated, the agency may be more likely to conduct a for-cause 

inspection in response to reports of potential manufacturing problems at a 

sterile injectable drug establishment than at one that manufactures noninjectable drugs. Across this time period, the percentage of sterile 

injectable drug establishment inspections with a for-cause component 

varied. After declining from its fiscal year 2007 peak, the percentage of 

sterile injectable drug establishment inspections with a for-cause 

component grew to 17 percent of fiscal year 2011 inspections. Fiscal year 

2011 was also both the peak in new sterile injectable drug shortages and 

warning letters issued to sterile injectable drug establishments.While the 

number of warning letters issued to sterile injectable drug establishments 

was equally high a year earlier in fiscal year 2010 and new shortages 

were at their second highest, the percentage of inspections with a forcause component was at its lowest—10 percent. Thus, comparing the 

trend in inspections with a for-cause component to the trends in 

shortages and in warning letters provides support for FDA officials’ 

contention that there were underlying manufacturing problems that could 

have led to shortages and warning letters in some years, but not others. 

 53FDA may conduct an inspection that includes multiple components during a single visit 

to an establishment. For example, it may follow up on reports of potential manufacturing 

problems during the for-cause component of an inspection and also verify that the 

establishment is following commitments made in a drug application during the preapproval 

component of an inspection.
Page 31 GAO-16-595 Drug Shortages

Figure 5: Percentage of Inspections with a For-Cause Component, by 

Establishment Type, Fiscal Year 2007 through Fiscal Year 2013

Note: FDA may conduct an inspection that includes multiple components during a single visit to an 

establishment. Thus, FDA investigators use various codes for reporting the type of inspection 

conducted in the agency’s inspection database. However, FDA officials told us that inspections 

initiated to follow up on reports of potential manufacturing problems may not be consistently coded as 

for-cause inspections and instead might be coded as surveillance inspections. Therefore, our counts 

of inspections with a for-cause component may be an undercount.
Page 32 GAO-16-595 Drug Shortages

From fiscal year 2010 through fiscal year 2012, seven sterile injectable 

drug manufacturing establishments that received warning letters for 

noncompliance with manufacturing standards slowed or shut down 

production. FDA and others said these slowdowns and shutdowns led to 

widespread shortages. For example, the fiscal year 2012 voluntary 

shutdown of one of the seven establishments reportedly led to the actual 

or potential shortage of more than 100 drugs.54 Another of the seven 

establishments manufactured more than 300 different drugs, so its 

production slowdown also led to multiple shortages. 

FDA issued warning letters to all seven establishments after finding that 

the establishments were not in compliance with manufacturing standards 

during inspections conducted from fiscal year 2007 through fiscal year 

2011. Although FDA did not require the establishments to shut down or 

slow production, the agency noted in a letter to a member of Congress 

about this issue that when products manufactured under problematic 

conditions pose a safety threat to patients—such as glass shards or metal 

shavings in vials of injectable drugs or fungal contamination—

manufacturers generally must stop production to resolve the problem.55

Such problems were experienced by six of the seven establishments 

linked to widespread shortages when particulates were discovered in their 

sterile injectable products. For example, a drug at one establishment was 

found to contain microscopic particles that were “stringy, amorphous, and 

globular” and sterile injectable drugs at two other establishments 

contained stainless steel particles. The presence of metal particles in 

sterile injectable drugs can cause serious injury to patients when injected. 

Following the receipt of reports of serious injury and illness, a drug 

manufactured at the seventh establishment was discovered to contain 

 54See, for example, S.L. Kweder and S. Dill, “Drug Shortages: The Cycle of Quantity and 

Quality,” Clinical Pharmacology & Therapeutics, vol. 93, no. 3 (2013), 248. 

55Food and Drug Administration, Letter to the Honorable Elijah E. Cummings, Ranking 

Member, Committee on Oversight and Government Reform, House of Representatives, 

July 23, 2012. In this letter, FDA noted that it worked with establishments that received 

warning letters to try to avoid a shutdown, offering assistance in addressing quality 

concerns. According to the letter, such assistance involved regular communication to 

discuss progress in addressing manufacturing issues and help with prioritizing remediation 

of problems that pose the highest risk to patients. Since 2011, FDA has included language 

in warning letters requesting that manufacturers contact the agency’s Drug Shortage Staff 

if the letter results in the manufacturer considering any action that would result in 

decreased production of drugs.

Seven Sterile Injectable 

Drug Establishments 

Linked to Widespread 

Shortages Received 

Warning Letters and All 

Had Previous Indications 

of Difficulty Meeting 

Manufacturing Standards 
Page 33 GAO-16-595 Drug Shortages

endotoxin, a component of certain bacteria, which may cause severe 

fever and death if present in a drug.

FDA documents and data indicate that all seven of these establishments 

had difficulty meeting manufacturing standards prior to FDA’s issuance of 

a warning letter, which, at least for these establishments, runs counter to 

the claim that the increase in warning letters was an indication that the 

agency began to apply manufacturing standards more rigorously. For 

example, FDA staff previously recommended issuing warning letters to 

two of the establishments, but after further internal review, FDA issued an 

untitled letter to one establishment and did not issue a warning letter to 

the other.56 (See fig. 6.) For two other establishments, the inspections 

preceding the inspection that resulted in the warning letter often included 

a for-cause component. For example, one of the two establishments was 

inspected six times between fiscal year 2007 and the inspection that 

resulted in the warning letter and each inspection was conducted in 

response to manufacturer reports of potential manufacturing problems 

submitted to FDA, complaints from consumers or health care providers, 

or both. 

 56Recommendations to issue a warning letter are subject to multiple levels of internal FDA 

review. In the case of one establishment, FDA ultimately sent an untitled letter, rather than 

a warning letter. (FDA sends untitled letters when serious violations of manufacturing 

standards are found, but the violations do not meet the threshold of regulatory significance 

for a warning letter.) Another establishment was the subject of two previous warning letter 

recommendations, but during the review process the agency determined that the 

manufacturer’s proposed corrective actions in response to the violations identified during 

the inspections were adequate and so did not issue the letters. 
Page 34 GAO-16-595 Drug Shortages

Figure 6: Indications of Potential Manufacturing Problems for Seven Establishments Linked to Widespread Shortages, Fiscal 

Year 2007 through Fiscal Year 2013

Notes:

FDA may conduct an inspection that includes multiple components during a single visit to an 

establishment (e.g., for-cause component and preapproval component).
Page 35 GAO-16-595 Drug Shortages

FDA issues warning letters when the agency has identified violations that may lead to enforcement 

action if not promptly and adequately corrected. FDA issues untitled letters when serious violations of 

manufacturing standards are found, but the violations do not meet the threshold of regulatory 

significance for a warning letter. FDA may petition a court for an injunction in order to prevent an 

establishment from manufacturing and distributing drugs until FDA determines that the establishment 

is compliant with the Food, Drug, and Cosmetic Act.

a

This figure shows selected indicators of potential manufacturing problems from fiscal year 2007 

through fiscal year 2013 only; for example, it does not include information on manufacturing violations 

that were repeat observations from previous inspections.

b

For establishment C the inspection that resulted in a warning letter was conducted in fiscal year 

2007, so any previous indications of manufacturing problems would have occurred outside of our time 

frame of fiscal year 2007 through 2013. Our analysis of FDA inspection data shows that FDA 

conducted inspections with a for-cause component in 3 of the 4 fiscal years preceding the fiscal year 

2007 inspection that resulted in a warning letter. FDA officials told us that there were other indications 

of continuing manufacturing problems at this establishment between the inspection that resulted in 

the warning letter and the injunction. For example, FDA officials told us that they held three regulatory 

meetings with the establishment. A regulatory meeting is used to inform establishments about how 

one or more products, practices, processes, or other activities are considered to be in violation of the 

law. 

Our analysis of FDA documents also shows that, for four establishments, 

the same manufacturing violations that led FDA to issue a warning letter 

had also been observed during previous FDA inspections. In the case of 

one of the four establishments, FDA documents show that the agency 

had expressed concerns about one violation 5 years prior to the 

inspection that resulted in the warning letter. 

For nearly all of the seven establishments linked to widespread 

shortages, there were continued indications of difficulty meeting 

manufacturing standards following their receipt of a warning letter. In 

addition to issuing one establishment a warning letter, FDA subsequently 

sought and obtained an injunction against this establishment to prevent it 

from manufacturing and distributing most drugs until FDA determined that 

the establishment was compliant with the Food, Drug, and Cosmetic 

Act.57 An agency press release about the injunction noted that inspections 

of the establishment found several product quality problems, including 

facility cleaning issues and poor equipment maintenance practices 

resulting in equipment shedding particles into some sterile injectable 

products. Despite investments to address these issues, this 

establishment decided to cease manufacturing all drugs and was 

permanently closed in 2013. Subsequent inspections of four other 

 57The consent decree of permanent injunction entered against the company allowed it to 

continue to manufacture and distribute certain drugs that FDA had determined were in 

shortage or vulnerable to shortage. U.S. v. Ben Venue Labs., No. 1:13CV154 (N. D. Ohio 

Jan. 22, 2013). 
Page 36 GAO-16-595 Drug Shortages

establishments resulted in the classification of official action indicated, 

signifying that FDA continued to identify serious deficiencies that 

warranted regulatory action. With these continued indications of potential 

manufacturing problems at multiple sterile injectable establishments 

manufacturing such medically necessary drugs as those used to treat 

cancer, administer anesthesia, and prevent blood clots, shortages of 

multiple sterile injectable drugs persist. FDA officials told us that these 

seven establishments all made improvements and in many cases are now 

helping to prevent and resolve some shortages. However, as of April 

2016, five of these seven establishments continue to cause shortages, 

according to FDA officials.

Shortages of sterile injectable anti-infective and cardiovascular drugs 

during 2012, 2013, and 2014 were strongly associated with certain factors 

we examined. We estimated a regression model to examine the 

relationship between drug shortages and four factors: (1) a decrease in 

the number of suppliers, (2) sales of a generic version, (3) the failure of 

an establishment making the drug to comply with manufacturing 

standards resulting in a warning letter, and (4) price decline. We found all 

factors but price decline to be strongly associated with shortages of the 

drugs in our study. For each factor, table 5 displays the estimated 

percentage point increase in the probability of a shortage when the factor 

is present for all drugs relative to the mean probability of a shortage 

predicted for all drugs in our study by our model. These estimates show 

that the presence of a single factor increases the probability of a drug 

shortage by as much as 16.8 percentage points from what the model 

otherwise predicts for all drugs in our study.58

 58The mean probability of a shortage predicted by the model for all drugs in our study is 

60.7 percent. To compute the mean probability, we first computed the predicted probability 

of a shortage for every drug and every year in our study by using the estimated 

coefficients from the model and the data for each drug. We then computed the mean of 

the 354 predicted values (118 drugs and 3 years), which was 0.607, or 60.7 percent. 

Shortages of Sterile 

Injectable Antiinfective and 

Cardiovascular Drugs 

Were Strongly 

Associated with 

Certain Factors 
Page 37 GAO-16-595 Drug Shortages

Table 5: Estimated Percentage Point Increase in Probability of a Drug Shortage in the Presence of Certain Factors, for Sterile 

Injectable Anti-infective and Cardiovascular Drugs, 2012-2014

The estimated mean probability of a shortage predicted for all drugs in our study by the model is 60.7 percent.

Factors

Estimated percentage point increase in 

the probability of a shortagea

Decrease in suppliers, previous 2 years 16.8**

Sales of a generic version, previous year 12.3**

Failure to comply with manufacturing standards resulting in a warning letter, previous 2 

years 8.1**

Price decline, previous 2 years 0.7

Source: GAO analysis of data from IMS Health, the Food and Drug Administration, and the University of Utah Drug Information Service | GAO-16-595.

Notes: Our multivariate logistic regression model uses a 3-year panel data file that contains shortage 

measures for 118 sterile injectable anti-infective and cardiovascular drugs from 2012 through 2014 

and measures of market structure (whether there was a decrease in suppliers), compliance with FDA 

manufacturing standards (whether there was a failure to comply with manufacturing standards 

resulting in a warning letter for at least one establishment that manufactured the drug), drug 

characteristics (whether sales of a generic version), and price and volume of sales (whether the price 

declined) from 2010 through 2013.

a

The estimated percentage point increase in the probability of a shortage is calculated as the 

difference between (1) the probability of a shortage if the factor is present for all drugs and the other 

three factors remain unchanged and (2) the mean probability of a shortage predicted for all drugs in 

our study by the model (60.7 percent). To compute the predicted probability of a shortage when the 

characteristic is present, we set the value of the variable to one, left the values of the other 

explanatory variables unchanged, and then calculated the probability using the coefficients estimated 

from our 3-year repeated measures logistic regression model. To compute the mean probability of a 

shortage predicted for all drugs in our study by the model, we first computed the predicted probability 

of a shortage for every drug and every year in our study by using the estimated coefficients from the 

model and the data for each drug. We then computed the mean of the 354 predicted values (118 

drugs and 3 years), which was 0.607, or 60.7 percent.

** indicates that the estimated probability is based on a coefficient estimate that was significant at a 

level of 0.01 or better, based on our logistic regression model results. 

The strong association between shortages and both (1) a decrease in the 

number of suppliers and (2) the failure of an establishment making the 

drug to comply with manufacturing standards resulting in a warning letter 

suggests that shortages may be triggered by supply disruptions. 

Characteristics of the sterile injectable drug industry may make these 

drugs susceptible to shortage when the number of suppliers decreases. 

For example, a supplier may decide to permanently discontinue an 

unprofitable product or the unavailability of raw materials may lead to 

production delays. Further, failure to comply with manufacturing 

standards resulting in a warning letter could also trigger a supply 

disruption if a manufacturer chooses to temporarily shut down production 

in a particular establishment to correct the conditions that led to a warning 

letter. In this industry, there is limited inventory in the supply chain, 

manufacturing capacity is constrained because production is scheduled 

months in advance, new manufacturers must receive regulatory approval 
Page 38 GAO-16-595 Drug Shortages

before entering the market, and the production process is complex. After 

a supply disruption for any reason, if other manufacturers are not able to 

increase supply in a timely manner, a shortage may ensue. 

For the drugs in our study, the association between noncompliance with 

manufacturing standards resulting in a warning letter and shortages is 

largely driven by the structure of the generic injectable manufacturing 

industry. The warning letters received by three large manufacturing 

establishments for failure to comply with manufacturing standards appear 

to be driving our finding that failures to comply with manufacturing 

standards resulting in warning letters were strongly associated with 

certain sterile injectable drug shortages.59 In this industry, establishments 

produce multiple drugs and so one establishment’s failure to comply with 

manufacturing standards that results in receipt of a warning letter could 

affect many drugs. For example, 69 percent of the 118 drugs in our study 

were manufactured by at least one of nine establishments. Thus, if one of 

these nine establishments failed to comply with manufacturing standards, 

many drugs in our study could be affected.60 For example, in 2012 one 

establishment that failed to comply with manufacturing standards and 

received a warning letter manufactured 22 drugs in our study. (See table 

6.) 

 59These three establishments, in addition to four other establishments that were linked to 

widespread shortages, were all included in our review of trends in warning letters and 

each manufactured at least one drug included in the study population for our regression 

analysis. 

60This is similar to the findings of another shortages study that found that 6 of the top 10 

manufacturers of sterile injectable drugs received warning letters for serious violations of 

manufacturing standards between 2010 and 2012. S.L. Kweder and S. Dill, “Drug 

Shortages,” 248.
Page 39 GAO-16-595 Drug Shortages

Table 6: Number of Sterile Injectable Anti-infective and Cardiovascular Drugs Manufactured by Establishments That Failed to 

Comply with Manufacturing Standards Resulting in a Warning Letter from 2010 through 2013 

Year

Total number of drugs 

manufactured at an 

establishment that received 

warning letter

Number of 

establishments that 

received warning 

letters

Minimum number of drugs 

manufactured at an 

establishment that received 

warning letter

Maximum number of drugs 

manufactured at an 

established that received 

warning letter

2010 32 5 1 21

2011 34 6 1 14

2012 22 1 22 22

2013 26 8 1 9

Source: GAO analysis of data from the Food and Drug Administration and IMS Health. ǀ GAO-16-595

Note: Calculations are based on data for a population of 118 sterile injectable anti-infective and 

cardiovascular drugs. Our calculations of the number of drugs manufactured by establishments that 

failed to comply with manufacturing standards resulting in a warning letter may be an undercount 

because we were unable to obtain complete establishment location information for about half of the 

118 drugs in our study.

While the strong association between failure to comply with 

manufacturing standards resulting in the receipt of a warning letter and 

shortages could support the contention that FDA regulatory activity 

triggered some shortages, it could also support the contention that there 

were growing manufacturing problems and possibly related quality 

concerns that both precipitated the warning letters and led to shortages. 

The findings of one study indicate that supply disruptions that led to 

recent shortages of generic sterile injectable drugs were often linked to 

quality problems.61 According to this study, quality problems stem from 

various sources, including insufficient maintenance, outdated or 

inadequate design of sterile manufacturing processes, and poor oversight 

that does not test for or respond adequately to indicators of potential 

quality problems. 

Additionally, our finding that sales of a generic version were associated 

with shortages suggests that relatively low profit margins may also trigger 

shortages for sterile injectable drugs. Specifically, compared with drugs 

for which there were only brand-name sales and thus only one supplier, 

drugs sold generically may have multiple suppliers and relatively lower 

profit margins. The 88 drugs in our study sold generically were available 

from an average of four suppliers during 2013, and 10 drugs had eight or 

more suppliers. Researchers have found that prices, and consequently 

 61Woodcock and Wosinska, “Economic and Technological Drivers,” 171.
Page 40 GAO-16-595 Drug Shortages

profit margins, decline for generic drugs as the number of suppliers 

increase.62 Relatively low profit margins may cause suppliers to exit the 

market for less profitable drugs in favor of more profitable ones or may 

make it unprofitable to increase supply, which could make the market 

vulnerable to shortages.

Lastly, though we did not find a price decline in the previous year to be 

significantly associated with shortages of the anti-infective and 

cardiovascular drugs in our study from 2012 through 2014, other 

evidence indicates that price may influence the amount of drugs 

produced.63 Research indicates that price influences a supplier’s profit 

margins, which may affect a supplier’s decision to stay in the market or 

invest in the manufacturing establishments.64 Further, research on 

shortages in another therapeutic class examined price trends and found 

that the average price of oncology drugs decreased every year leading up 

to a shortage, whereas the average price stayed the same or increased 

for oncology drugs that were not in shortage.65 (See app. II for more 

information about our data sources and methodology for our regression 

model, and app. II, III, and IV for more information about the relationship 

between certain factors and whether a drug was in shortage.)

 62See D. Reiffen and M. R. Ward, “Generic Industry Price Dynamics,” The Review of 

Economics and Statistics, vol. 87, no. 1, (2005), 37-49 and V. Jensen and B.A. Rappaport, 

“The Reality of Drug Shortages: The Case of Injectable Agent Propofol,” The New 

England Journal of Medicine, vol. 363, no. 9 (2010), 806. Reiffen and Ward found that 

when the number of generic suppliers increased from 1 to 10, wholesale generic prices fell 

by approximately 30 percent. They also found that when there are eight or more generic 

drug suppliers, price falls below long-run marginal costs. When the price of a drug is lower 

than the long-run cost of producing an additional unit (i.e., its long-run marginal cost), then 

it is not profitable to increase production. 

63Our examination of 2013 price data for the drugs in our study found that median prices 

were lower for drugs in shortage than drugs not in shortage. Specifically, the median price 

for drugs in shortage with any generic sales was $37.44 less than the median price for 

such drugs not in shortage. A similar price difference was found for drugs that are brandname only—drugs in shortage had a median price of $149.64 less than the median price 

for drugs not in shortage. 

64Reiffen and Ward, “Generic Industry Price Dynamics” and Jensen and Rappaport, 

“Reality of Drug Shortages.”

65Department of Health and Human Services, Economic Analysis, 8. This study also found 

that the volume of sales for oncology drugs declined in the years prior to a drug shortage. 

This study did not use a regression model to examine whether changes in price were 

associated with shortages after controlling for other factors that may be associated with 

shortages.
Page 41 GAO-16-595 Drug Shortages

We provided a draft of this report for comment to the Department of 

Health and Human Services (HHS). We also provided excerpts of this 

report for comment to UUDIS. We received written comments from HHS, 

which are reproduced in appendix V. We also received technical 

comments from HHS and UUDIS, which we incorporated as appropriate.

In its comments, HHS reiterated its commitment to the prevention of new 

drug shortages and the mitigation and resolution of those shortages that 

do occur. HHS concurred with our finding that there are still critical 

shortages affecting the public health. However, in contrast to our finding 

based on UUDIS data that ongoing shortages remain high, HHS 

presented FDA drug shortage data indicating that ongoing shortages 

have decreased. HHS attributed this difference to FDA and UUDIS 

defining drug shortages differently, which we describe in detail in 

appendix I of our report. It is important to note that HHS presents FDA’s 

drug shortage data from 2010 through 2015 to describe the decrease in 

drug shortages, but we have previously identified reliability concerns with 

these data, which we describe in appendix I. Because of these concerns, 

we have not used FDA’s drug shortage data in our current and previous 

work, and we instead relied on UUDIS drug shortage data, which we 

continue to believe are the most comprehensive and reliable information 

available for the time periods we reviewed. Also, despite the declining 

trend in both new and ongoing shortages suggested by the FDA drug 

shortage data, our communications with health care provider 

organizations suggest that shortages are still a significant concern. 

Representatives from 8 of the 12 organizations representing health care 

providers told us that, in their experience, shortages have remained 

constant or increased. 

HHS stated it is not surprising that we identified an association between 

warning letters and drug shortages, given that the most common cause of 

drug shortages is manufacturing deficiencies, and that warning letters, by 

definition, are issued in response to such deficiencies. HHS cautions that 

this association should not be interpreted as suggesting that warning 

letters themselves cause shortages. We agree with this note of caution.

HHS also noted that our regression analysis may overestimate the direct 

impact of issuing warning letters because we did not include other 

measures of manufacturing quality in our model. We considered a 

number of additional variables in developing our model, some of which 

are described in appendix II. However, given the size of our study 

population (118 drugs), we limited the number of variables in our 

regression analysis. Our model includes key variables grounded in 

economic theory and findings from our previous work on drug shortages.

Agency and ThirdParty Comments and 

Our Evaluation
Page 42 GAO-16-595 Drug Shortages

We are sending copies of this report to the appropriate congressional 

committees, the Secretary of HHS, and other interested parties. In 

addition, the report is available at no charge on the GAO website at 

http://www.gao.gov.

If you or your staff have any questions about this report, please contact 

me at (202) 512-7114 or crossem@gao.gov. Contact points for our 

Offices of Congressional Relations and Public Affairs may be found on 

the last page of this report. GAO staff who made key contributions to this 

report are listed in appendix VI.

Marcia Crosse

Director, Health Care
Appendix I: Comparison of Drug Shortage Data 

Collected by the Food and Drug Administration 

and the University of Utah Drug Information 

Service

Page 43 GAO-16-595 Drug Shortages

Throughout our work we have received questions from members of 

Congress about the similarities and differences between the drug 

shortage data collected by the Food and Drug Administration (FDA) and 

the University of Utah Drug Information Service (UUDIS). This appendix 

provides a summary of each data source and the results of a comparison 

of data from both sources.

FDA and UUDIS, on behalf of the American Society of Health-System 

Pharmacists (ASHP), both track and maintain data on drug shortages that 

occur in the United States. Both organizations make drug shortage 

information publically available through their respective websites.1 FDA 

and UUDIS also maintain drug shortage data that are separate and more 

comprehensive than the information available on the respective websites. 

For example, FDA does not post shortages on its website if a shortage is 

expected to be resolved quickly. Meanwhile, UUDIS only posts 

information on ASHP’s website for a subset of shortages that it deems to 

be critical.2

 

We have previously conducted analyses of UUDIS drug shortage data to 

determine trends in the number of drug shortages from January 2001 

through June 2013.3 UUDIS began tracking data on drug shortages in 

2001 to inform ASHP’s members, such as hospital pharmacists, and 

other health care providers about the status of new, ongoing, and 

resolved shortages. These data are generally regarded as the most 

 1

For FDA’s drug shortage website see 

http://www.accessdata.fda.gov/scripts/drugshortages/default.cfm. UUDIS posts drug 

shortage information on ASHP’s website; see 

http://www.ashp.org/menu/DrugShortages.aspx. Additionally, FDA and UUDIS have 

developed documentation contrasting FDA’s and ASHP’s drug shortage websites. See 

http://www.ashp.org/DocLibrary/Policy/DrugShortages/FDA-versus-ASHP.pdf for more 

information.

2

UUDIS identifies some shortages as critical because alternative medications are 

unavailable, the shortages affect multiple manufacturers, or it receives multiple reports 

from different institutions.

3

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

(Washington, D.C.: Nov. 21, 2011) and Drug Shortages: Public Health Threat Continues, 

Despite Efforts to Help Ensure Product Availability, GAO-14-194 (Washington, D.C.: Feb. 

10, 2014). For our 2011 report we analyzed UUDIS drug shortage data from January 1, 

2001, through June 20, 2011, while our 2014 report focused on data from January 2007 

through June 2013. 

Appendix I: Comparison of Drug Shortage 

Data Collected by the Food and Drug 

Administration and the University of Utah Drug 

Information Service 

Background 
Appendix I: Comparison of Drug Shortage Data 

Collected by the Food and Drug Administration 

and the University of Utah Drug Information 

Service

Page 44 GAO-16-595 Drug Shortages

comprehensive and reliable source of drug shortage information for the 

time periods we have reviewed. We used UUDIS data because while 

conducting work for our 2011 report, we found that FDA did not have a 

database on drug shortages. While FDA collected some information, it did 

not lend itself to analysis—it was not easily retrievable, routinely 

recorded, or sufficiently reliable. Because FDA was unable to provide us 

with the information necessary to analyze trends in drug shortages, we 

obtained these data from UUDIS. FDA has since taken steps to track 

drug shortage data in a systematic manner; it started tracking drug 

shortages in 2011 in response to our report, and its efforts have evolved 

over the last several years.4 However, the data it has compiled since our 

2011 report was issued do not include information on shortages prior to 

2010.

FDA and UUDIS have different definitions of what constitutes a drug 

shortage. Consequently, they do not always determine the same drugs 

are in shortage and they do not generally report the same number of 

shortages overall. Specifically, the Food and Drug Administration Safety 

and Innovation Act, which FDA implements, defines a drug shortage as a 

period of time when the demand or projected demand for a drug within 

the United States exceeds the supply of the drug.5 In determining whether 

a shortage exists, FDA focuses on the overall market for a specific drug, 

meaning that even if a particular manufacturer does not have product 

available, it is not a shortage if the other manufacturers of that product 

can meet the projected demand for the whole market. For example, if 

Manufacturer A has no product available, and Manufacturer B is able to 

manufacture enough product to satisfy the entire market demand, FDA 

would not consider this situation a drug shortage, even if Manufacturer 

B’s product is a different strength and package size as long as it views 

the different sizes and strengths as clinically interchangeable. In contrast, 

UUDIS defines a shortage as a supply issue that affects how pharmacies 

prepare and dispense a product or that influences patient care when 

prescribers must choose an alternative therapy because of supply issues. 

 4

FDA has drug shortage data available from January 2010 through the present. FDA has 

revised its data collection methods several times since 2011, when it collected information 

in a spreadsheet. In 2012 FDA developed a drug shortage database and in 2014 it 

transitioned to a drug shortage data system. 

5

21 U.S.C. § 356c(h)(2).

Description of FDA and 

UUDIS Drug Shortage 

Data
Appendix I: Comparison of Drug Shortage Data 

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and the University of Utah Drug Information 

Service

Page 45 GAO-16-595 Drug Shortages

According to a UUDIS official, the organization therefore focuses on the 

supply of drugs by national drug code, which is a code that uniquely 

identifies specific drug products for a given manufacturer.6 Focusing on 

the supply of drugs by national drug code means that if one manufacturer 

does not have enough supply of all strengths and package sizes to meet 

demand for a period of time it will be considered a shortage. For example, 

if Manufacturer A has no product available and Manufacturer B has 

product available—whether it is the same strength and package size or 

not—UUDIS would consider this to constitute a drug shortage. A UUDIS 

official said that focusing on supply of a drug by national drug code is 

important for pharmacists and clinicians because it is the level at which 

products are ordered and used. Further, the UUDIS official said that 

substituting one package size for another may create a safety issue. For 

more information about FDA’s and UUDIS’s processes for determining 

whether a drug shortage exists, see table 7.

 6

One drug can have multiple national drug codes associated with it. For example, a drug 

made by one manufacturer, in one strength, but in three package sizes, would have a 

different national drug code for each of the three package sizes.
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Table 7: Summary of FDA’s and UUDIS’s Processes for Identifying and Resolving Drug Shortages

FDA UUDIS

Definition of a 

shortage

A period of time when the demand or projected demand 

for the drug within the United States exceeds the supply 

of the drug.

A supply issue that affects how pharmacies prepare and 

dispense a product or that influences patient care when 

prescribers must choose an alternative therapy because 

of supply issues. 

How notified of 

shortage

Manufacturers are required to notify FDA of a 

discontinuance or interruption in the production of a lifesaving drug.a In addition, the public and the American 

Society of Health-System Pharmacists voluntarily file 

reports on drug availability. FDA also works closely with 

and regularly communicates with UUDIS.

Voluntary reports from practitioners, patients, 

pharmaceutical industry representatives, and others. 

UUDIS also works closely with and regularly 

communicates with FDA.

Standards for 

determining 

whether a 

shortage exists 

All manufacturers cannot meet current market demand 

for the drug based on information provided by 

manufacturers and market sales research. 

Shortage is occurring nationwide.

Shortage is determined by the supply of the drug at the 

market level based on information from manufacturers 

and IMS Health. 

Shortage is verified with manufacturers and it affects how 

a pharmacy prepares or dispenses a product; or the use 

of alternative drugs is required because of the shortage, 

which may affect patient care. 

Shortage is occurring nationwide. 

Shortage is determined by the supply of a drug by national 

drug code based on information from manufacturers and

providers, according to a UUDIS official. 

Criteria for 

resolving 

shortage

One or more manufacturers are in production and able 

to meet full market demand.

All manufacturers of the drug restore all strengths and 

package sizes to full availability or discontinue their 

products.b

Source: The Food and Drug Administration (FDA) and the University of Utah Drug Information Service (UUDIS). ǀ GAO-16-595

Notes: 

a

21 U.S.C. § 356c. The law defines a life-saving drug as one that is life supporting, life sustaining, or 

intended for use in the prevention or treatment of a debilitating disease or condition.

b

For example, UUDIS could be notified of a shortage involving three manufacturers: Manufacturer A 

has no product available; Manufacturers B and C still do, but have limited supply of certain package 

sizes. According to a UUDIS official, UUDIS would consider the shortage to be resolved (1) when 

Manufacturers A, B, and C all have all strengths and package sizes back in stock; (2) if Manufacturer 

A decides to discontinue its product, when Manufacturers B and Manufacturer C both have all 

strengths and package sizes back in stock; or (3) when UUDIS obtains other information indicating 

that a shortage has been resolved, such as FDA notifying UUDIS that Manufacturers B and C have 

increased supply and all market need has been met. 

To compare FDA’s and UUDIS’s drug shortage data, we reviewed 

documentation from both FDA and UUDIS. We also analyzed data from 

both sources related to drug shortages from January 2013 through March 

2013.7 Given our previous finding that shortages last about 9 months to a 

 7

Similar to the approach we followed for our prior and current analyses of UUDIS data, we 

excluded shortages of over-the-counter drugs, biologics (including vaccines), medical 

devices, and orally-administered vitamins. We did this to ensure that we were comparing 

shortages of prescription drugs from both data sources.

Methodology 
Appendix I: Comparison of Drug Shortage Data 

Collected by the Food and Drug Administration 

and the University of Utah Drug Information 

Service

Page 47 GAO-16-595 Drug Shortages

year on average, we selected this time frame for our comparison to allow 

for sufficient time for shortages that began during this time frame to have 

been resolved by the time we started our analysis in July 2014.8 Data 

from this time period were also available from both FDA and UUDIS when 

we started our analysis. Although we considered analyzing data for a 

more recent time period, FDA did not have reliable drug shortage data 

readily available from January 2014 through July 2014 when we began 

our analysis.9

We considered an FDA shortage and a UUDIS shortage to be a match if 

they shared the same active ingredient and route of administration (e.g., 

hydroxyzine injection) and had some overlapping time period that both 

were considered to be in shortage. For example, if FDA identified a 

shortage of a specific drug that began in January 2013 and lasted through 

December 2013, we considered the UUDIS shortage of the same drug to 

be a match if it occurred at any point from January 2013 through 

December 2013. We confirmed the results of our comparison with FDA 

and UUDIS. For shortages that did not match, we asked both 

organizations for reasons why one source identified a shortage while the 

other did not. The purpose of this comparison is to generally illustrate the 

differences between the two sets of data. The findings of our comparison 

are not generalizable to drug shortage data from other time periods. 

Our analysis shows that FDA and UUDIS identified a different number of 

shortages that began from January 2013 through March 2013—17 and 39 

respectively. Many of the shortages that FDA identified during this time 

 8

See GAO-14-194, 12, and GAO-12-116, 17.

9

FDA officials said the agency suspended use of its drug shortage database at the end of 

2013 while it was developing a more robust drug shortage data system. According to FDA 

officials, the transition to the new data system took longer than anticipated and FDA 

documented limited information about shortages using manual logs during an extended 

period in 2014. FDA began using this new data system in late 2014, and information on 

new and active shortages in 2014 was entered retroactively into this system.

Comparison of FDA and 

UUDIS Drug Shortage 

Data from January 2013 

through March 2013

Number of Drug Shortages 

Identified by FDA and UUDIS 
Appendix I: Comparison of Drug Shortage Data 

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Page 48 GAO-16-595 Drug Shortages

period were also identified by UUDIS during this same time period. 

Specifically, 8 of the 17 shortages that FDA identified as beginning within 

this time frame matched to a UUDIS shortage that was also identified 

during the same period. Another 5 of the 17 shortages identified by FDA 

matched to a UUDIS shortage that was identified as beginning either 

before January 2013 or after March 2013. The remaining 4 shortages 

were not identified by UUDIS during any time period. 

While many of the shortages identified by FDA during this time period 

were also identified by UUDIS, our analysis showed the opposite was true 

for shortages identified by UUDIS. Specifically, most of the 39 shortages 

UUDIS identified during this timeframe—28 of 39—were not identified as 

shortages by FDA. Another 3 of the 39 shortages matched to an FDA 

shortage that was identified as beginning either before January 2013 or 

after March 2013. (See fig. 7.) 

Figure 7: Comparison of the Number of Drug Shortages Identified by FDA and 

UUDIS from January 2013 through March 2013 

Note: From January 2013 through March 2013, FDA identified 17 shortages and UUDIS identified 39. 

We considered an FDA shortage and a UUDIS shortage to be a match if they shared the same active 

ingredient and route of administration (e.g., hydroxyzine injection) and had some overlapping time 

period that both were considered to be in shortage.

For the 8 shortages that both FDA and UUDIS identified from January 

2013 through March 2013, we found that in 5 out of 8 instances FDA 

identified shortages earlier than UUDIS. Also, UUDIS and FDA both had 

instances of first considering a shortage resolved (in 3 and 5 instances, 

respectively). (See table 8.) In the 5 instances in which FDA identified a 

shortage first, the agency identified the shortage between 6 and 50 days 

prior to UUDIS. In the 1 instance in which UUDIS identified a shortage 
Appendix I: Comparison of Drug Shortage Data 

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and the University of Utah Drug Information 

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Page 49 GAO-16-595 Drug Shortages

first, the organization identified the shortage 13 days prior to FDA. When 

FDA considered a shortage resolved prior to UUDIS (in 5 out of 8 

instances), this determination was made between 23 and 359 days prior 

to UUDIS. When UUDIS considered a shortage resolved prior to FDA (in 

3 out of 8 instances), it reached this conclusion between 67 and 199 days 

prior to FDA. 

Table 8: Information about the Eight Shortages That Were Identified by Both FDA 

and UUDIS from January 2013 through March 2013

Entity that first identified the shortage Number of shortages

FDA 5

UUDIS 1

Same time by UUDIS and FDA 2

Entity that first considered the shortage resolved

FDA 5

UUDIS 3

FDA and UUDIS considered resolved at the same time 0

Source: GAO analysis of the Food and Drug Administration (FDA) and the University of Utah Drug Information Service (UUDIS) data. ǀ 

GAO-16-595

FDA provided various reasons for why it did not consider 28 of the 39 

drug shortages UUDIS identified from January 2013 through March 2013 

to be shortages. According to FDA officials, the most common reason is 

that the agency determined that other manufacturers had the same 

package size and strength of the drug available. (See table 9.) For 

example, UUDIS identified a shortage of methylprednisolone sodium 

succinate injection, a drug used to treat endocrine disorders and allergic 

reactions, among other things, on January 15, 2013, and considered the 

shortage resolved on October 23, 2013. UUDIS considered 

methylprednisolone sodium succinate injection to be a shortage at this 

time because Manufacturer A discontinued production due to raw material 

issues, and Manufacturer B had the drug on intermittent back order. 

Though UUDIS acknowledged that Manufacturer C had this drug 

available, as did Manufacturer B at times, it posted extensive clinical 

alternatives on ASHP’s website for those providers that were unable to 

obtain the available drug. FDA did not consider methylprednisolone 

sodium succinate injection to be in shortage at this time because the 

agency determined that manufacturers other than Manufacturer A had the 

same strength and package size of the drug available to meet demand.

Reasons Why FDA and UUDIS 

Shortage Data Often Did Not 

Match
Appendix I: Comparison of Drug Shortage Data

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and the University of Utah Drug Information 

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Page 50 GAO-16-595 Drug Shortages

Table 9: Reasons Why FDA Differed with the University of Utah Drug Information Service in Identifying Certain Shortages 

from January 2013 through March 2013

Reason provided by FDA Number of shortages Percentage

Other manufacturers of the same strength and package size had the drug available 17 61

Short term supply disruption 5 18

FDA prevented the shortage 3 11

Alternative strength or package size of the same drug was available 2 7

Different clinically interchangeable drugs were available 1 4

Total 28 100

Source: Food and Drug Administration (FDA). | GAO-16-595

Note: Percentages do not sum to 100 because of rounding.

Overall, the 28 UUDIS shortages that FDA did not consider to be 

shortages lasted from 6 days to over 2 years, according to UUDIS’s 

data.10 In the case of the 5 UUDIS shortages that FDA stated were shortterm supply disruptions rather than shortages, the duration ranged from 

about a month to over 2 years—one shortage was still active as of 

December 2015. FDA officials described a short-term supply disruption as 

a situation where manufacturers report a disruption, but that inventory in 

the supply chain remains available and FDA has not received any reports 

of shortage from the public. FDA officials said that these types of 

disruptions commonly involve delays in importing drugs manufactured at 

foreign establishments or other short-term delays involving transport. FDA 

also said that it prevented 3 of the 28 shortages that UUDIS identified. 

According to UUDIS data, those 3 shortages lasted from about 8 months 

to over 2 years. Lastly, though FDA did not determine that these 28 

situations met its criteria to be a drug shortage, UUDIS deemed 13 of 

these shortages critical, a designation made because alternative 

medications were unavailable, the shortages affected multiple 

manufacturers, or the shortages were widely reported. 

There were also 4 shortages that FDA identified from January 2013 

through March 2013 that UUDIS did not determine to be in shortage. 

UUDIS did not consider these drugs to be in shortage because it (1) was 

 10One of these 28 shortages was excluded from our analysis of shortage duration 

because UUDIS listed this shortage as lasting 0 days. The shortage was coded as lasting 

0 days because the drug was discontinued by the manufacturer, and thus would not be 

coming back on the market.
Appendix I: Comparison of Drug Shortage Data 

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and the University of Utah Drug Information 

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Page 51 GAO-16-595 Drug Shortages

never notified that these drugs were in short supply or (2) heard from 

suppliers that they had full stock. According to FDA data, these four 

shortages lasted between 2 months to more than 2 years.
Appendix II: Scope and Methodology –

Relationship between Certain Factors and 

Sterile Injectable Drug Shortages

Page 52 GAO-16-595 Drug Shortages

To examine the relationship between certain factors and sterile injectable 

drug shortages, we used economic theory and findings from our previous 

work on drug shortages to identify factors that may be associated with 

shortages.1 We included these factors in a multivariate regression model 

to determine which factors are associated with shortages. 

Our study population included all sterile injectable anti-infective and 

cardiovascular drugs that were marketed and sold from 2010 through 

2014—a total of 118 drugs.2 We defined a drug to be all products with the 

same active ingredient and route of administration (e.g., epinephrine 

injection). We limited the analysis to sterile injectable drugs because we 

previously found that approximately 65 percent of all critical shortages 

from January 2009 through June 2013 were for sterile injectable drugs. 

We selected anti-infective and cardiovascular drugs because in our prior 

reports we found that approximately one-fourth of all critical drug 

shortages reported from January 2009 through June 2013 were for drugs 

in these therapeutic classes.3 Both anti-infective and cardiovascular drugs 

continue to be subject to multiple and prolonged shortages.4 Also, prior 

studies have focused on other classes, such as oncology. 

To identify the drugs in our study population, we used National Sales 

PerspectivesTM data from IMS Health, a company that collects and 

analyzes health care data. We selected all drugs that were in the antiinfective and cardiovascular Anatomical Therapeutic Classes as listed in 

the 2014 guidelines from the European Pharmaceutical Market Research 

 1

GAO, Drug Shortages: Public Health Threat Continues, Despite Efforts to Help Ensure 

Product Availability, GAO-14-194 (Washington, D.C.: Feb. 10, 2014) and Drug Shortages: 

FDA’s Ability to Respond Should Be Strengthened, GAO-12-116 (Washington, D.C.: Nov. 

21, 2011).

2

From a population of all sterile injectable anti-infective and cardiovascular drugs in the 

National Sales PerspectivesTM file with sales between January 2010 and December 2014, 

we excluded six drugs that were not approved until 2014, and eight drugs that were either 

discontinued before 2014, used only to dilute another drug, or had sales data of less than 

$100,000 during our entire study period, but were not in shortage.

3

GAO-12-116, 21, and GAO-14-194, 17.

4

As part of our work we spoke to representatives of the American College of Cardiology 

and the Infectious Diseases Society of America who confirmed that shortages of these 

drugs have been consistently problematic in recent years.

Appendix II: Scope and Methodology –

Relationship between Certain Factors and 

Sterile Injectable Drug Shortages

Study Population and Data 

Sources
Appendix II: Scope and Methodology –

Relationship between Certain Factors and 

Sterile Injectable Drug Shortages

Page 53 GAO-16-595 Drug Shortages

Association.5 For each drug, we also used these data to develop annual 

measures of suppliers, dollar sales, volume sales, and sales for generic 

and brand-name products.6 In addition, for each drug we calculated a 

proxy for average annual transaction price by dividing total dollar sales of 

the drug by total volume sales.7

 

We used data from the University of Utah Drug Information Service 

(UUDIS) to determine whether a drug was in shortage during 2012, 2013, 

and 2014 and when each shortage was first reported to UUDIS. UUDIS 

defines a shortage as a supply issue that affects how pharmacies prepare 

and dispense a product or that influences patient care when prescribers 

must choose an alternative therapy because of supply issues. For 

example, UUDIS would consider acyclovir injection to be in shortage if the 

20 mL package size was available, but the 10 mL package size was not 

because health care providers would need to draw out 10 mL doses from 

a 20 mL vial, which may create a safety issue. In our analysis, drugs 

classified as being in shortage were in shortage at any time during a 

given calendar year, and includes shortages that started in a prior year 

and remained ongoing.

We used drug registration and listing data from the Food and Drug 

Administration (FDA) to identify the establishments that were listed as 

manufacturing the drugs in our study population. Using FDA’s warning 

letter data, we then determined whether each drug was manufactured by 

at least one establishment that failed to comply with manufacturing 

 5

The National Sales PerspectivesTM data file that we used for this study classifies drugs 

according to the European Pharmaceutical Market Research Association’s Anatomical 

Classification Guidelines, 2014. These guidelines are available at 

http://www.ephmra.org/ATC-2014 (accessed May 2, 2016).

6

We use the term “supplier” to describe the company name on each drug label. The 

company whose name is on the drug label may or may not be the same as the company 

that manufactured the drug. A drug’s supplier could be different from its manufacturer if 

the labeler is actually a repackager, a distributor, the parent company of the manufacturer, 

or if the supplier enters into a contract with another manufacturer—known as a contract 

manufacturer—to produce the drug on its behalf. 

7

Our method to estimate an average transaction price for each drug has been used by 

other researchers. For example, see D. Reiffen and M.R. Ward, “Generic Industry Price 

Dynamics,” The Review of Economics and Statistics, vol. 87, no. 1 (2005), 37 - 49. We 

measured volume in terms of eaches, which indicate the number of units for injectable 

products, such as bottles or injectable vials. We used the Consumer Price Index for all 

urban consumers to express prices in terms of 2014 dollars. 
Appendix II: Scope and Methodology –

Relationship between Certain Factors and 

Sterile Injectable Drug Shortages

Page 54 GAO-16-595 Drug Shortages

standards and received a warning letter from FDA at any time in the 2 

years before each of the years we examined in our regression analysis. If 

FDA identifies a violation of law or regulations during an inspection, the 

agency may then take various regulatory actions, such as issuing a 

warning letter. FDA issues warning letters when it identifies violations that 

may lead to enforcement action if not promptly and adequately corrected.

We developed an econometric model to examine the association between 

shortages of sterile injectable anti-infective and cardiovascular drugs and 

certain factors. Our model uses 3 years of shortage history for each drug 

in our study to examine the relationship between whether a drug was in 

shortage during 2012, 2013, or 2014 (dependent variable), and certain 

factors (the explanatory variables) described below. 

To estimate the model we created a panel data file that has three 

observations, corresponding to 2012, 2013, and 2014, for each of the 118 

drugs in our study.8 Each of the 354 observations contains data on 

whether the drug was in shortage that year plus data on certain factors 

pertaining to the preceding 1 or 2 years. 

Our dependent variable is a binary variable indicating whether a drug was 

in shortage during 2012, 2013, or 2014 in a repeated measures model. 

We selected this time period because, according to UUDIS data, the 

number of shortages was the highest during 2014, and the number of 

shortages was also high during 2012 and 2013.9

We developed four categories of factors that may be associated with 

shortages: drug characteristics, market structure, compliance with 

 8

A panel data file is a data set constructed from repeated cross sections of data over time. 

Our panel data file has three repeated cross sections of data. 

9

We also estimated a model that examined the relationship between shortages that began 

during 2014 only and certain factors during 2012 and 2013. None of the explanatory 

variables were statistically significant at a 0.10 level or better. We concluded that none of 

these explanatory variables were statistically significant in this model because shortages 

began during 2014 for a relatively small number of drugs in our study (20 out of 118 

drugs) and the magnitudes of the correlation coefficients between each explanatory 

variable and the dependent variable were less than 0.30. 

Regression Model and 

Panel Data File

Dependent Variable: 

Whether a Drug Was in 

Shortage

Explanatory Variables
Appendix II: Scope and Methodology –

Relationship between Certain Factors and 

Sterile Injectable Drug Shortages

Page 55 GAO-16-595 Drug Shortages

manufacturing standards, and price and volume of sales. Our inclusion of 

an explanatory variable to measure compliance with manufacturing 

standards is unique to this study. Our regression model controlled for one 

factor from each category. We hypothesized that each of the following 

factors would be positively associated with a shortage in the following 

year:

• Generic sales (drug characteristic). Because drugs sold generically 

are more likely to have lower profit margins when compared to their 

brand-name counterparts, we hypothesized that suppliers of such 

drugs are less likely to increase production in response to a shortage. 

Drugs sold generically include drugs that had any sales of a generic 

product, regardless of the presence of any brand product sales. We 

classified branded generic products as generic products.10

• A decline in the number of suppliers (market structure). Such a 

decline may disrupt the supply of a drug if other suppliers do not 

increase their production.11 The number of suppliers for each drug 

during a year is the number of suppliers that had sales of the drug at 

any point during that year.12

• Failure to comply with manufacturing standards resulting in a 

warning letter (compliance with manufacturing standards). 

Manufacturers may choose to temporarily shut down production to 

correct the conditions that led to the violations of current good 

manufacturing practice regulations cited in a warning letter. They may 

also shut down permanently if the costs of correcting the problematic 

conditions outweigh the potential benefits of producing drugs at that 

establishment. A drug was associated with a warning letter if at least 

one establishment manufacturing the drug received a warning letter 

for failure to comply with manufacturing standards. 

 10A branded generic is a non-originator drug that has never been under patent protection 

or that was launched after the original patent expired and is marketed under a unique 

trade name, usually by multiple manufacturers.

11For our regression model we considered two factors related to market structure: whether 

the number of suppliers declined and whether there was more than one supplier. Some 

regression specifications included whether the number of suppliers declined and others 

included whether there was more than one supplier. The first factor was statistically 

significant, but the second was not.

12Our annual supplier counts do not include suppliers with missing names in the IMS 

Health data.
Appendix II: Scope and Methodology –

Relationship between Certain Factors and 

Sterile Injectable Drug Shortages

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• Price decline (price and volume of sales). Shortages may occur if 

prices decline because suppliers will not have a financial incentive to 

increase production of the drug in shortage. For each drug, we 

calculated a proxy for the average annual price as the ratio of its total 

dollar sales to its total volume sales. We adjusted all prices to 2014 

dollars using the Consumer Price Index for all urban consumers. 

We used our 3-year panel data file to estimate a repeated measures 

logistic regression model in which the dependent variable was a binary 

variable indicating whether there was a new or ongoing drug shortage in 

the given year (2012, 2013, or 2014).13 The model included the following 

binary explanatory variables for whether:

• there were sales of the drug in its generic or branded generic form 

during the previous year,

• the number of suppliers of the drug was greater 2 years before the 

given year compared with 1 year before it, 

• the proxied average price of the drug was greater 2 years before the 

given year compared with 1 year before it, and 

• an establishment that manufactured the drug failed to comply with 

manufacturing standards and received a warning letter from the FDA 

in either of the preceding 2 years.

We used the coefficient estimates from the repeated measures logistic 

regression model to calculate for each explanatory variable the estimated 

percentage point increase in the probability of a shortage when the 

explanatory variable is present for all drugs relative to the mean 

probability of a shortage predicted for all drugs in our study by our model. 

We did this in three steps. First, for each explanatory variable, we 

estimated the probability of a shortage in the presence of that variable by 

setting the value of the variable to one, leaving the values of the other 

explanatory variables unchanged, and then calculated the probability. 

Second, we used the coefficient estimates from the regression model and 

 13The estimating method is generalized estimating equations. See Paul Alison, Logistic 

Regression Using SAS®: Theory and Application, 2nd ed., (Cary, N.C.: SAS Institute, Inc., 

2012), section 8.4. We estimated the model with SAS software and used the SAS 

GENMOD procedure. The quasilikelihood under the independence criterion goodness of 

fit measure for our estimated regression model was 377.

Model Specification
Appendix II: Scope and Methodology –

Relationship between Certain Factors and 

Sterile Injectable Drug Shortages

Page 57 GAO-16-595 Drug Shortages

the data for every drug in our study to calculate the mean probability of 

shortage predicted for all the drugs in our study, which was 0.607. Third, 

to compute the estimated percentage point increase in probability of a 

shortage for each explanatory variable, we computed the difference 

between the probability of a shortage for each explanatory variable (step 

1) and the mean probability of a shortage predicted for all drugs in our 

study (step 2).Table 10 presents the coefficients (log odds ratios) and 

odds ratios we estimated from our repeated measures logistic regression 

model. 

Table 10: Estimated Odds Ratios from Repeated Measures Logistic Regression 

Model of Shortages for Sterile Injectable Anti-infective and Cardiovascular Drugs, 

2012-2014

Characteristic

Estimated log odds 

ratio (standard 

error)

Estimated odds 

ratio

Sales of a generic version, previous year 1.86**

(0.36) 

 6.4**

Decrease in suppliers, previous 2 years 1.14**

(0.41)

 3.1**

Failure to comply with manufacturing 

standards, resulting in the receipt of FDA 

warning letter, previous 2 years

 0.67**

(0.22)

 2.0**

Price decline, previous year 0.08

(0.19)

 1.1

Source: GAO analysis of data from IMS Health, the Food and Drug Administration, and the University of Utah Drug Information Service 

| GAO-16-595.

Notes:

We estimated a repeated measures logistic regression model with generalized estimating equations. 

The data are from a 3-year panel data file that includes shortage measures for 118 sterile injectable 

anti-infective and cardiovascular drugs from 2012 through 2014 and measures of drug characteristics 

(sales of a generic version), market structure (decrease in suppliers), compliance with FDA 

manufacturing standards (failure to comply with manufacturing standards resulting in receipt of a 

warning letter), and price and volume of sales (price decline) from 2010 through 2013. The model 

includes a set of binary variables for the years 2012 through 2014.

** indicates that the estimated probability was significant at a level of 0.01 or better. The 

quasilikelihood under the independence criterion goodness of fit measure is 377. 

For each explanatory variable, the estimated probability of a shortage if 

that variable is present for every drug in our study is presented in table 

11.
Appendix II: Scope and Methodology –

Relationship between Certain Factors and 

Sterile Injectable Drug Shortages

Page 58 GAO-16-595 Drug Shortages

Table 11: Estimated Probability of a Drug Shortage When Each Explanatory 

Variable Is Present, Sterile Injectable Anti-infective and Cardiovascular Drugs, 2012-

2014

The estimated mean probability of a shortage predicted for all drugs in our study by the model is 

0.607.

a

Characteristic

Estimated probability of a 

shortage if characteristic 

presentb

Sales of a generic version, previous year 0.730**

Decrease in suppliers, previous 2 years 0.775**

Failure to comply with manufacturing standards 

resulting in the receipt of an FDA warning letter, 

previous 2 years 0.688**

Price decline, previous 2 years 0.614

Source: GAO analysis of data from IMS Health, the Food and Drug Administration, and the University of Utah Drug Information Service 

| GAO-16-595.

Notes: We calculated these estimates using the coefficients we estimated from a repeated measures 

logistic regression model. We estimated the regression model with a 3-year panel data file that 

includes shortage measures for 118 sterile injectable anti-infective and cardiovascular drugs from 

2012 through 2014 and measures of drug characteristics (sales of a generic version), market 

structure (decrease in suppliers), compliance with FDA manufacturing standards (failure to comply 

with manufacturing standards resulting in receipt of a warning letter), and price and volume of sales 

(price decline) from 2010 through 2013. 

a

To compute the mean probability of a shortage predicted for all drugs in our study by the model, we 

first computed the predicted probability of a shortage for every drug and every year in our study by 

using the estimated coefficients from the model and the data for each drug. We then computed the 

mean of the 354 predicted values (118 drugs and 3 years), which was 0.607, or 60.7 percent.

b

To compute the predicted probability of a shortage when the characteristic is present, we set the 

value of the variable to one, left the values of the other explanatory variables unchanged, and then 

calculated the probability using the coefficients estimated from our 3-year repeated measures logistic 

regression model.

** indicates that the estimated probability is based on a coefficient estimate that was significant at a 

level of 0.01 or better, based on our repeated measures logistic regression model results. 

To inform our selection of the explanatory variables to include in the 

regression model, we computed descriptive statistics for a broad range of 

factors in the following categories: drug characteristics, market structure, 

compliance with FDA manufacturing standards, and price and volume of

sales. Specifically, we compared frequencies, medians, and trends over 

time for these factors for drugs in shortage and those not in shortage 

during 2014. Some of the additional factors that we analyzed were:

• Years since brand-name or generic drug approval (drug 

characteristic). The years since brand-name drug approval is based 

on the date of the oldest approved new drug application associated 

Additional Factors
Appendix II: Scope and Methodology –

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Sterile Injectable Drug Shortages

Page 59 GAO-16-595 Drug Shortages

with a particular drug. The years since generic drug approval is based 

on the oldest approved abbreviated new drug application associated 

with a particular drug. Both of these measures truncate at 32 years 

because FDA’s data source for approval history—Approved Drug 

Products with Therapeutic Equivalence Evaluations (Orange Book)—

does not provide approval dates before 1982. 

• Number of establishments that manufacture the drug (market 

structure). We used FDA drug registration and listing data from 2009 

and 2014 to identify the number of establishments that were listed as 

manufacturing the drugs in our study. As many establishments 

manufacture more than one drug, we also created a measure that 

identifies the relationship between the establishments and all of the 

drugs in our analysis. 

• Receipt of an official action indicated inspection classification 

(compliance with manufacturing standards). FDA classifies 

establishment inspections as official action indicated when serious 

deficiencies are found that warrant regulatory action. When an 

inspection is so classified, FDA may take various regulatory actions, 

including issuing a warning letter, which we include in our regression 

model.

Our analysis has some limitations. First, our findings are limited to data 

for sterile injectable anti-infective and cardiovascular drugs that were 

marketed and sold from 2010 through 2014 and shortages in these two 

therapeutic classes from 2012 through 2014. Our findings are not 

generalizable to drugs in other routes of administration, other therapeutic 

classes, or shortages during other time periods. Second, missing 

manufacturing location data may have caused us to underestimate or 

overestimate the relationship between shortages and noncompliance with 

manufacturing standards resulting in a warning letter. For the drugs in our 

study that were missing manufacturing location data, we could not always 

identify whether the drugs were manufactured by at least one 

establishment that received a warning letter. Therefore, we may have 

misclassified some drugs that were manufactured by establishments that 

received a warning letter as drugs manufactured by establishments that 

did not receive a warning letter. Whether we may have overestimated or 

underestimated the relationship depends on whether the potentially 

misclassified drugs were in shortage. If these potentially misclassified 

drugs were in shortage, our model may underestimate the relationship 

between shortages and receipt of a warning letter. If these potentially 

misclassified drugs were not in shortage, our model may overestimate the 

Limitations
Appendix II: Scope and Methodology –

Relationship between Certain Factors and 

Sterile Injectable Drug Shortages

Page 60 GAO-16-595 Drug Shortages

relationship between shortages and receipt of a warning letter. The extent 

to which we may have underestimated or overestimated this relationship 

is unclear. For 57 of the 118 drugs in our study, we found partial 

manufacturing location data, and for 3 drugs we found no manufacturing 

location data. We were not able to identify these data for drugs if the IMS 

data did not include a national drug code for a particular product or if the 

manufacturer was not listed in FDA’s drug registration and listing data.

Finally, our proxy for average transaction price for the drugs in our study 

applies to all strengths and package sizes of the drug, because we 

defined a drug to include all products with the same active ingredient and 

route of administration, regardless of strength or package size. We used 

this definition of a drug because it is the definition that UUDIS uses to 

record drug shortages. In the market, average transaction prices for each 

drug vary by strength and package size. 

We took several steps to ensure that the data used to produce this 

analysis were sufficiently reliable. Specifically, we assessed the reliability 

of the IMS Health National Sales PerspectivesTM data by interviewing 

officials at IMS Health. We also reviewed relevant documentation and 

examined the data for obvious errors, such as missing values and values 

outside of expected ranges. We assessed the reliability of the UUDIS and 

FDA data by interviewing officials, reviewing relevant documentation, and 

examining the data for obvious errors. We determined that these data 

were sufficiently reliable for the purposes of this analysis.

Data Reliability and Audit 

Standards
Appendix III: Comparison of Selected Factors 

for Sterile Injectable Anti-infective and 

Cardiovascular Drugs by Shortage Status, 

2012 - 2014

Page 61 GAO-16-595 Drug Shortages

This appendix compares certain factors for sterile injectable anti-infective 

and cardiovascular drugs in shortage during 2012, 2013, and 2014 to 

those same factors for drugs not in shortage during those years. Drugs 

classified as being in shortage during a year were in shortage anytime 

during that year, and include shortages that started in a prior year and 

remained ongoing. In general, we found differences between drugs that 

were in shortage during this time period and drugs that were not in 

shortage (see table 12). For example, our analysis showed that for 19 to 

23 percent of these drugs in shortage between 2012 and 2014, the 

number of suppliers decreased during the 2-year period before the 

shortage compared with 6 percent or less of drugs that were not in 

shortage. A decline in the number of suppliers indicates that a supplier 

that had sales for a particular drug in one year had no sales for that drug 

in the next. 

Table 12: Relationship between Certain Factors and Shortages of Sterile Injectable Anti-infective and Cardiovascular Drugs, 

by Shortage Status in 2012-2014

Shortage year and factors during prior year(s)

Percentage for drugs in 

shortage 

Percentage for drugs not 

in shortage 

Shortage, 2014 

Decrease in suppliers, 2012-2013 23.3 4.4

Failure to comply with manufacturing standards resulting in a warning 

letter, 2012-2013

46.6 13.3

Sales of a generic version, 2013 90.4 35.6

Price decline, 2012-2013 46.6 33.3

Shortage, 2013

Decrease in suppliers, 2011-2012 21.7 6.1

Failure to comply with manufacturing standards resulting in a warning 

letter, 2011-2012

55.1 12.2

Sales of a generic version, 2012 85.5 49.0

Price decline, 2011-2012 43.5 44.9

Shortage, 2012

Decrease in suppliers, 2010-2011 18.6 2.1

Failure to comply with manufacturing standards resulting in a warning 

letter, 2010-2011 52.9 16.7

Sales of a generic version, 2011 90.0 45.8

Price decline, 2010-2011 67.1 43.8

Source: GAO analysis of data from IMS Health, the Food and Drug Administration, and the University of Utah Drug Information Service. | GAO-16-595

Notes: Calculations are based on data for a population of 118 sterile injectable anti-infective and 

cardiovascular drugs. There were 73 drugs in shortage during 2014, 69 during 2013, and 70 during 

2012.

Appendix III: Comparison of Selected Factors 

for Sterile Injectable Anti-infective and 

Cardiovascular Drugs by Shortage Status, 

2012 - 2014
Appendix III: Comparison of Selected Factors 

for Sterile Injectable Anti-infective and 

Cardiovascular Drugs by Shortage Status, 

2012 - 2014

Page 62 GAO-16-595 Drug Shortages

We use the term “supplier” to describe the company name based on the drug label.

For drugs with sales of a generic version, either both brand and generic versions of the drug were 

sold or only generic versions were sold.

Prices were calculated by dividing total dollar sales by total volume sales. Prices were adjusted to 

2014 dollars using the Consumer Price Index for all urban consumers.
Appendix IV: Comparison of Selected Factors 

for Sterile Injectable Anti-infective and 

Cardiovascular Drugs by Shortage Status in 

2014

Page 63 GAO-16-595 Drug Shortages

This appendix compares certain factors for sterile injectable anti-infective 

and cardiovascular drugs in shortage in 2014 to those same factors for 

drugs not in shortage that year. Drugs classified as being in shortage 

were in shortage anytime during 2014, and include shortages that started 

in a prior year and remained ongoing. In general, we found differences 

between drugs that were in shortage and not in shortage in 2014 for 

certain factors, such as for sales of generic versions of the drug (see 

table 13). 

Table 13: Certain Factors Associated with Sterile Injectable Anti-infective and Cardiovascular Drugs, by Shortage Status in 

2014

Year(s)

In shortage, 

2014

Not in 

shortage, 

2014

Drug characteristics

Sales of only generic versions of the drug 2010-2014 51% 18%

Sales of both brand-name and generic versions of the drug 2010-2014 47% 20%

Sales of only brand-name versions of the drug 2010-2014 3% 62%

Median years since brand-name drug approvala 2013 31 14

Median years since generic drug approvala 2013 21 0

Price and volume of salesb

Median change in annual price 2010-11 -5.3% 1.1%

2011-12 -0.5% 2.3%

2012-13 0.5% 4.4%

2013-14 0.4% 6.3%

Median change in annual volume sales 2010-11 -2.1% -4.7%

2011-12 -4.6% -4.5%

2012-13 -2.2% -5.6%

2013-14 2.3% -3.3%

Market structure

Percentage of drugs with generic sales:

 1 supplier with sales

 2 - 4 suppliers with sales

 5 or more suppliers with sales

Missing supplier datac

2013 10%

36%

30%

5%

9%

8%

2%

0%

Percentage of drugs with brand-name only sales:

 1 supplier with sales

 2 or more suppliers with sales

 Missing supplier datac

2013

7%

0%

0%

93%

0%

0%

Median market share of largest supplier with sales 2013 75% 100%

Appendix IV: Comparison of Selected Factors 

for Sterile Injectable Anti-infective and 

Cardiovascular Drugs by Shortage Status in 

2014
Appendix IV: Comparison of Selected Factors 

for Sterile Injectable Anti-infective and 

Cardiovascular Drugs by Shortage Status in 

2014

Page 64 GAO-16-595 Drug Shortages

Year(s)

In shortage, 

2014

Not in 

shortage, 

2014

Median number of establishments that manufacture the drugs 5 2

Drugs manufactured at an establishment that manufactures at least 10 percent 

of the drugs in our study 88% 36%

Compliance with FDA manufacturing standardsd

Percentage of drugs manufactured by at least one establishment that received 

an inspection classified as official action indicated 2012-2013 89% 33%

Percentage of drugs manufactured by at least one establishment that failed to 

comply with manufacturing standards and received a warning letter 2012-2013 47% 13%

Source: GAO analysis of data from IMS Health, Food and Drug Administration (FDA), and University of Utah Drug Information Service. | GAO-16-595

Notes: Calculations are based on data for a population of 118 sterile injectable anti-infective and 

cardiovascular drugs. In 2014, 73 of the 118 drugs in our study were in shortage. Twenty of these 

shortages began in 2014 and the remaining 53 began in prior years.

We use the term supplier to describe the different company names based on the drug label.

We used FDA drug registration and listing data from 2009 and 2014 to identify the number of 

establishments that were listed as manufacturing the drugs in our study. Our calculations of the 

number of establishments that manufacture a particular drug and the number of drugs manufactured 

by an establishment that received an official action indicated inspection classification or a warning 

letter may be an undercount because we were unable to obtain complete establishment location 

information for about half of the 118 drugs in our study.

a

The years since brand-name drug approval is based on the date of the oldest approved new drug 

application associated with a particular drug. The years since generic drug approval is based on the 

oldest approved abbreviated new drug application associated with a particular drug. Both of these 

measures truncate at 32 years because FDA’s Approved Drug Products with Therapeutic 

Equivalence Evaluations (Orange Book) data do not provide approval dates before 1982. Thus, we 

report the median for both of these measures.

b

Prices were calculated by dividing total dollar sales by total volume sales. We report median 

changes in annual prices instead of mean changes because for some years, a price increase for one 

drug upwardly skewed the mean change in price. Prices were adjusted to 2014 dollars using the 

Consumer Price Index for all urban consumers.

c

Supplier data were missing if the supplier name was missing in the IMS data or if there were no 

sales of the drug in 2013.

d

FDA classifies establishment inspections as official action indicated when serious deficiencies are 

found that warrant regulatory action. When an inspection is classified as official action indicated, FDA 

may take various regulatory actions, including issuing a warning letter. Thus, some of the drugs 

included in the official action indicated percentage calculation are the same drugs in the warning letter 

calculation.
Appendix V: Comments from the Department 

of Health and Human Services

Page 65 GAO-16-595 Drug Shortages

Appendix V: Comments from the Department 

of Health and Human Services
Appendix V: Comments from the Department 

of Health and Human Services

Page 66 GAO-16-595 Drug Shortages
Appendix V: Comments from the Department 

of Health and Human Services

Page 67 GAO-16-595 Drug Shortages
Appendix V: Comments from the Department 

of Health and Human Services

Page 68 GAO-16-595 Drug Shortages
Appendix VI: GAO Contact and Staff 

Acknowledgments

Page 69 GAO-16-595 Drug Shortages

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

In addition to the contact named above, Geri Redican-Bigott, Assistant 

Director; Katherine L. Amoroso; Zhi Boon; Sandra George; Alison 

Goetsch; Cathleen Hamann; Rebecca Hendrickson; Richard Lipinski; 

Yesook Merrill; Vikki Porter; Oliver Richard; Daniel Ries; Merrile Sing; 

Alison Smith; and Eric Wedum made key contributions to this report.

Appendix VI: GAO Contact and Staff 

Acknowledgments

GAO Contact

Staff 

Acknowledgments
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Page 70 GAO-16-595 Drug Shortages

Controlled Substances: DEA Needs to Better Manage Its Quota Process 

and Improve Coordination with FDA. GAO-15-494T. Washington, D.C.: 

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High-Risk Series: An Update. GAO-15-290. Washington, D.C.: February 

2015.

Drug Shortages: Better Management of the Quota Process for Controlled 

Substances Needed; Coordination between DEA and FDA Should Be 

Improved. GAO-15-202. Washington, D.C.: February 2, 2015.

Drug Shortages: Threat to Public Health Persists, Despite Actions to Help 

Maintain Product Availability. GAO-14-339T. Washington, D.C.: February 

10, 2014.

Drug Shortages: Public Health Threat Continues, Despite Efforts to Help 

Ensure Product Availability. GAO-14-194. Washington, D.C.: February 

10, 2014.

Drug Shortages: FDA’s Ability to Respond Should Be Strengthened. 

GAO-12-315T. Washington, D.C.: December 15, 2011. 

Drug Shortages: FDA’s Ability to Respond Should Be Strengthened. 

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