Drug Shortages: Certain Factors Are Strongly Associated with This Persistent Public Health Challenge
Published: 2016-07-07T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: 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.
section_title: What GAO Found
paragraphs: 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.
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.

section_title: Letter
paragraphs: 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.
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  address quality problems. 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. 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. 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  application requiring FDA approval would be one that adds a new  manufacturing site.
Congress included a provision in the Food and Drug Administration  Safety and Innovation Act for us to review several different aspects of  drug shortages. 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  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.  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  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. 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. 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. As we used the  drug as the unit of analysis, we next identified the number of drugs  associated with those prioritized submissions. 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  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. 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  manufacturing at least one sterile injectable product. 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 non- injectable drugs. We also obtained data on warning letters citing non- compliance 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. 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  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. 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.
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. 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  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. 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  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.
subsections: section_title: Background
subsections: section_title: FDA’s Oversight of Drugs
paragraphs: FDA’s approval is required before brand-name drugs and generic drugs  can be marketed for sale in the United States. 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. 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  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. 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. 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  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. 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.
section_title: FDA Oversight of Drug Shortages
paragraphs: 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. 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  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.
section_title: Characteristics of the Sterile Injectable Drug Industry
paragraphs: In our February 2014 report, we identified unique characteristics of the  sterile injectable drug industry that may make these drugs susceptible to  shortages. These characteristics include limited inventory, need for  regulatory approval, production complexity, and constrained  manufacturing capacity.
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. 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 anti- infective 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  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. 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. 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  behalf. Therefore, the number of suppliers of a particular drug may  not be the same as the number of manufacturers of that drug. 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.
section_title: New Drug Shortages Have Decreased Since 2011, but Many Shortages Persist for Multiple Years
paragraphs: 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. (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.
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.
The duration of all shortages reported from January 2010 through  December 2015 varied, ranging from 1 day to almost 6 years.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.
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. 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.
section_title: FDA Prioritized Reviews of 383 Submissions to Respond to Drug Shortages
paragraphs: 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.
subsections: section_title: FDA Prioritized Review of Both Drug Applications and Supplements to Address Shortages and the Majority Were for Generic Sterile Injectable Drugs
paragraphs: 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.)
Further, the majority of the submissions for which FDA prioritized its  reviews to address drug shortages were for generic sterile injectable  drugs. 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.
Overall, FDA had completed at least one review cycle for approximately  80 percent of the 383 prioritized submissions as of October 30, 2014.  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. 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.
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. For ANDAs, review times ranged from 40 days to more  than 3 years. See table 2 for the median time to approval for  submissions that FDA received and prioritized its review of from January  2010 through July 2014.
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.
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.
section_title: Analysis of a Subset of Drug Submissions Suggests that Prioritization Can Be Helpful In Preventing or Resolving Some Drug Shortages
paragraphs: 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. 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  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.)
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. This difference was more  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.
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. 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.
section_title: Number of Warning Letters FDA Issued to Sterile Injectable Drug Establishments Increased, Including Letters to Establishments Linked to Widespread Shortages
subsections: section_title: Number of Warning Letters FDA Issued to Sterile Injectable Drug Manufacturers Increased, but the Percentage of Inspections Resulting in Letters Was Relatively Small
paragraphs: 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.
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  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.
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  manufacturing problems. 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.
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  raw materials or components. 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. 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. 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.
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  letters, and one indication of potential manufacturing problems—the  frequency of inspections with a for-cause component. 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 non- injectable 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 non- injectable 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 for- cause 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.
section_title: Seven Sterile Injectable Drug Establishments Linked to Widespread Shortages Received Warning Letters and All Had Previous Indications of Difficulty Meeting Manufacturing Standards
paragraphs: 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. 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.  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  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. (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.
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. 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  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.
section_title: Shortages of Sterile Injectable Anti- infective and Cardiovascular Drugs Were Strongly Associated with Certain Factors
paragraphs: 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.
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  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. 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. 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.)
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. 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  profit margins, decline for generic drugs as the number of suppliers  increase. 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. 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. 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. (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.)
section_title: Agency and Third- Party Comments and Our Evaluation
paragraphs: 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.
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.
section_title: Appendix I: Comparison of Drug Shortage Data Collected by the Food and Drug Administration and the University of Utah Drug Information Service
paragraphs: 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.
subsections: section_title: Background
paragraphs: 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. 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.
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. 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  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. However, the data it has compiled since our  2011 report was issued do not include information on shortages prior to  2010.
section_title: Description of FDA and UUDIS Drug Shortage Data
paragraphs: 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. 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.
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. 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.
section_title: Methodology
paragraphs: 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. Given our previous finding that shortages last about 9 months to a  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. 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.
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.
section_title: Comparison of FDA and UUDIS Drug Shortage Data from January 2013 through March 2013
subsections: section_title: Number of Drug Shortages Identified by FDA and UUDIS
paragraphs: 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  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.)
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  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.
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.
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. In the case of the 5 UUDIS shortages that FDA stated were short- term 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  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.
section_title: Appendix II: Scope and Methodology – Relationship between Certain Factors and Sterile Injectable Drug Shortages
paragraphs: 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. We included these factors in a multivariate regression model  to determine which factors are associated with shortages.
subsections: section_title: Study Population and Data Sources
paragraphs: 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. 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. Both anti-infective and cardiovascular drugs  continue to be subject to multiple and prolonged shortages. 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 anti- infective and cardiovascular Anatomical Therapeutic Classes as listed in  the 2014 guidelines from the European Pharmaceutical Market Research  Association. 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. 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.
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  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.
section_title: Regression Model and Panel Data File
paragraphs: 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. 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.
section_title: Dependent Variable: Whether a Drug Was in Shortage
paragraphs: 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.
section_title: Explanatory Variables
paragraphs: We developed four categories of factors that may be associated with  shortages: drug characteristics, market structure, compliance with  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.
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. 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.
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.
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.
section_title: Model Specification
paragraphs: 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). 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  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.
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.
section_title: Additional Factors
paragraphs: 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  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.
section_title: Limitations
paragraphs: 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  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.
section_title: Data Reliability and Audit Standards
paragraphs: 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.
section_title: Appendix III: Comparison of Selected Factors for Sterile Injectable Anti-infective and Cardiovascular Drugs by Shortage Status, 2012 - 2014
paragraphs: 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.
section_title: Appendix IV: Comparison of Selected Factors for Sterile Injectable Anti-infective and Cardiovascular Drugs by Shortage Status in 2014
paragraphs: 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).
section_title: Appendix V: Comments from the Department of Health and Human Services
section_title: Appendix VI: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Staff Acknowledgments
paragraphs: 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.
section_title: Related GAO Products
paragraphs: Controlled Substances: DEA Needs to Better Manage Its Quota Process  and Improve Coordination with FDA. GAO-15-494T. Washington, D.C.:  May 5, 2015.
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.  GAO-12-116. Washington, D.C.: November 21, 2011.