Drug Shortages: Public Health Threat Continues, Despite Efforts to Help Ensure Product Availability
Published: 2014-02-10T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: From prolonged duration of a disease, to permanent injury, to death, drug shortages have led to harmful patient outcomes. FDA—an agency within the Department of Health and Human Services (HHS)—is responsible for protecting public health and works to prevent, alleviate, and resolve shortages. In 2011, GAO recommended that FDA should enhance its ability to respond to shortages. In 2012, FDASIA gave FDA new authorities to improve its responsiveness and mandated GAO to study drug shortages.
In this report, GAO (1) reviews the trends in recent drug shortages and describes what is known about their effect on patients and providers; (2) examines the causes of drug shortages; and (3) evaluates the progress FDA has made in addressing drug shortages. GAO analyzed data from FDA and the University of Utah Drug Information Service, which is generally regarded as the most comprehensive source of drug shortage information for the time period we reviewed. GAO interviewed officials from FDA and other federal agencies, organizations representing patients and providers, and drug manufacturers. GAO also reviewed the literature, relevant statutes, regulations, and documents.
section_title: What GAO Found
paragraphs: The number of drug shortages remains high. Although reports of new drug shortages declined in 2012, the total number of shortages active during a given year—including both new shortages reported and ongoing shortages that began in a prior year—has increased since 2007. Many shortages are of generic sterile injectable drugs. Provider association representatives reported that drug shortages may force providers to ration care or rely on less effective drugs.
The immediate cause of drug shortages can generally be traced to a manufacturer halting or slowing production to address quality problems, triggering a supply disruption. Other manufacturers have a limited ability to respond to supply disruptions due to constrained manufacturing capacity. GAO's analysis of data from the Food and Drug Administration (FDA) also showed that quality problems were a frequent cause. GAO also identified potential underlying causes specific to the economics of the generic sterile injectable drug market, such as that low profit margins have limited infrastructure investments or led some manufacturers to exit the market.
While shortages have persisted, FDA has prevented more potential shortages in the last 2 years by improving its responsiveness. Among other things, FDA implemented Food and Drug Administration Safety and Innovation Act (FDASIA) requirements and recommendations GAO made in 2011. FDA has also initiated other steps to improve its response to shortages, such as developing procedures to enhance coordination between headquarters and field staff. However, there are shortcomings in its management of drug shortage data that are inconsistent with internal control standards. For example, FDA has not created policies or procedures governing the management of the data and does not perform routine quality checks on its data. Such shortcomings could ultimately hinder FDA's efforts to understand the causes of specific shortages as well as undermine its efforts to prevent them from occurring. In addition, FDA has not conducted routine analyses of the data to proactively identify and evaluate the risks of drug shortages.
section_title: What GAO Recommends
paragraphs: FDA should strengthen its internal controls over its drug shortage data and conduct periodic analyses to routinely and systematically assess drug shortage information, using this information to proactively identify drug shortage risk factors. HHS agreed with GAO's recommendations.

section_title: Letter
paragraphs: From prolonged duration of a disease, to permanent injury, to death, drug  shortages have led to harmful outcomes for patients of all ages. Over the  last decade, an increasing number of prescription drugs—including life- saving and life-sustaining drugs—have been in short supply, preventing  health care providers and patients from accessing medications that are  essential for treatment. During shortages, providers—including hospitals,  physicians, and pharmacists—may have to use medications that could be  less effective for treating conditions or carry unwanted side-effects, if  alternatives are available at all.
The Food and Drug Administration (FDA)—an agency within the  Department of Health and Human Services (HHS)—is responsible for  overseeing the safety and effectiveness of drugs marketed in the United  States, including addressing drug shortages. A unit within FDA, referred  to as the Drug Shortage Staff (DSS), coordinates the agency’s activities  to prevent, alleviate, and resolve shortages. FDA defines a drug shortage  as a situation in which the total supply of all clinically interchangeable  versions of an FDA-regulated drug is inadequate to meet the current or  projected demand. In November 2011, we reported on the growing  number of drug shortages and their causes and found that the agency  lacked sufficient authority to respond to shortages. We recommended that  FDA strengthen its response and suggested that Congress consider  establishing a requirement for manufacturers to report potential or actual  supply disruptions to FDA.
Pub. L. No. 112-144, 126 Stat. 993 (2012).
FDA’s role in resolving them, among other things.the trends in recent drug shortages and describes what is known about  their effect on patients and providers, (2) examines the causes of drug  shortages, and (3) evaluates the progress FDA has made in addressing  drug shortages.
Our analysis focuses on shortages of prescription drugs, so we excluded shortages of  over-the-counter drugs, biologics (including vaccines), medical devices, and orally- administered vitamins from our analysis even though UUDIS also tracks and includes  these shortages in its data. UUDIS broadly defines a shortage as a supply issue that  affects how pharmacies prepare and dispense a product or that influences patient care  when prescribers must choose an alternative therapy because of supply issues. Once  UUDIS identifies a shortage, it generally does not consider a shortage to be resolved until  the drug is available again in all strengths and package sizes from all manufacturers that  currently produce the drug. For example, UUDIS could be notified of a shortage involving  three manufacturers: Manufacturer A has no product available; Manufacturers B and C  still do, but have limited supply of certain package sizes. According to a UUDIS official,  UUDIS would consider the shortage to be resolved (1) when Manufacturers A, B, and C all  have all strengths and package sizes back in stock; (2) if Manufacturer A decides to  discontinue its product, when Manufacturers B and Manufacturer C both have all strengths  and package sizes back in stock; or (3) when UUDIS obtains other information indicating  that a shortage has been resolved, such as FDA telling UUDIS that Manufacturers B and  C have increased supply and all market need has been met. identified as critical because alternative medications were unavailable,  the shortages affected multiple manufacturers, or it received multiple  reports from different institutions. These 219 critical shortages were a  subset of the total number of shortages reported during this time. For this  subset of shortages, we identified their product types, routes of  administration, and therapeutic classes. 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. To describe the effect of drug shortages on patients and  providers, we interviewed representatives from 10 national associations  representing health care providers including physicians, hospitals, and  pharmacists. We asked these stakeholders a series of open-ended  questions and did not independently validate their responses. We also  reviewed relevant documents from the various organizations, including  surveys, congressional testimony, and comments submitted to FDA  related to drug shortages.
To examine the causes of recent drug shortages we performed a search  of research databases to identify any literature published from January 1,  2003, through June 30, 2013, that reported on the causes of drug  shortages. We identified and reviewed 20 studies, which included journal  articles, working papers, and government publications that either  presented original research on the causes of drug shortages or included  an in-depth discussion of the causes of drug shortages. We also  interviewed drug manufacturers to obtain their views about the causes of  drug shortages. Finally, we analyzed FDA data on the reported causes of  shortages that occurred from January 1, 2011, through June 30, 2013.
We reviewed all FDA data used for reasonableness, outliers, and  consistency, and based on our review, determined that the data were  sufficiently reliable for our purposes.
To evaluate the progress FDA has made in responding to drug shortages,  we reviewed documentation and interviewed FDA officials regarding the  agency’s current approach to managing drug shortages and implementing  FDASIA requirements. This included reviewing FDA data related to drug  shortages, including information contained in its recently created drug  shortages database and information about shortages published on its  website. We also analyzed FDA information on potential drug shortages  the agency prevented from January 2011 through June 2013. To  determine the number of shortages prevented, we grouped together  shortages that involved multiple versions of a drug that had the same  route of administration. We compared FDA’s drug shortage management  activities to the relevant standards described in the Standards for Internal  Control in the Federal Government and to the agency’s requirements   We also interviewed relevant market participants, such  under FDASIA.as manufacturers and provider groups, to obtain their perspective on the  recent steps that FDA has taken to address shortages and the  effectiveness of FDA’s efforts to prevent, mitigate, and resolve drug  shortages.
Appendix I contains additional information on the methodology we used to  describe the trends in and causes of drug shortages and the steps we  took to determine the reliability of the data we used. Appendix II contains  a complete list of the federal agencies and other stakeholders we  interviewed for this report.
We conducted this performance audit from January 2013 to February  2014 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: Drug Shortages
paragraphs: Many participants along the entire drug supply chain are affected by  shortages. A typical drug supply chain involves a drug manufacturer  selling a drug to a wholesale distributor, which then sells the drug to a  hospital or pharmacy. (See fig. 1.)
Shortages of drugs can result in a variety of problems that directly affect  the care patients receive. For example, recent research on the effects of  drug shortages identified an increase in adverse outcomes among  pediatric cancer patients treated with an alternative drug. Further, in  some cases, drug shortages can even contribute to additional health  problems. For example, one stakeholder said that recent shortages of  drugs that supply an essential nutrient, like calcium, could lead to nutrient  deficiencies among patients.
section_title: FDA Oversight of Drugs
paragraphs: FDA is responsible for overseeing the safety and effectiveness of drugs  marketed in the United States. Within FDA, the Center for Drug  Evaluation and Research (CDER) manages these responsibilities. FDA’s  approval is required before new drugs and generic drugs can be  marketed for sale. To obtain FDA’s approval for a new 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 for review by CDER’s Office of New Drugs. Sponsors of  generic drugs may obtain FDA approval by submitting an abbreviated  new drug application (ANDA) to the agency for review by CDER’s Office  of Generic Drugs. 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. After obtaining  FDA’s approval, drug companies that want to change any part of their  original application—such as changes to product manufacturing location  or process, type or source of active ingredients, or the product’s  labeling—must generally submit an application supplement to notify FDA  of the change and, if the change has a substantial potential to have an  adverse effect on the product, obtain FDA’s approval.
CGMP regulations provide a framework for a manufacturer to follow to produce safe,  pure, and high-quality drugs. See 21 C.F.R. pts. 210-211. action. In some cases, FDA may exercise its regulatory discretion and  assess whether the risks of either taking a certain enforcement or other  action or refraining from taking action will outweigh the benefits, such as  when an action may cause or exacerbate a drug shortage. For example,  if a manufacturing deficiency is identified, such as overfilled vials or the  presence of contaminants, the manufacturer should take appropriate  corrective and preventive actions, or FDA may issue a warning letter or  take an enforcement action to require the manufacturer to do so.  Similarly, FDA may request manufacturers of drugs whose labeling is not  consistent with the labeling approved by FDA to correct such labeling, or  it may take an regulatory action to require the manufacturers to do so.
section_title: FDA Role in Resolving Drug Shortages
paragraphs: In 1999, FDA established the CDER Drug Shortage Program—now  known as DSS—to coordinate issues related to drug shortages.DSS determines that a shortage is in effect or a potential shortage is  pending, it contacts manufacturers of the drug to collect up to date  information on inventory of the drug, demand for the drug, and  manufacturing schedules. DSS may also coordinate its response with  several offices including the Office of Generic Drugs, Office of New Drug  Quality Assessment, and CDER’s Office of Compliance—the office  responsible for minimizing consumer exposure to unsafe, ineffective, and  poor quality drugs. DSS may also work with FDA’s Office of Regulatory  Affairs—the office within FDA that oversees imports, inspections, and  enforcement policy—and the manufacturer to help resolve any underlying  problem a manufacturer is facing. If the shortage is of a controlled   Once  substance, FDA may work with the Drug Enforcement Administration  (DEA) on any issues related to quotas for the production of the drug.
When FDA is informed of a potential shortage in advance, it may take  steps to prevent the shortage, such as providing assistance to address  manufacturing problems. manufacturer’s proposed approach to responding to quality concerns. In  addition, FDA can expedite inspections of manufacturing establishments  to facilitate the marketing of an alternative to a drug in shortage or can  expedite inspections once remediation to address quality problems has  been completed.
FDA officials said that they take steps to address shortages of both medically necessary  drugs and non-medically necessary drugs, though they give priority to shortages of  medically necessary drugs. additional sources of a drug in shortage, or supplements to ANDAs or  NDAs, to provide additional capacity for production of an already  approved drug. 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.
On October 31, 2011, the President issued an Executive Order that  directed FDA to use its authority to encourage manufacturers to report  drug supply disruptions earlier, to expedite regulatory review, when  possible, to prevent or mitigate drug shortages, and to communicate to  the Department of Justice any findings by FDA that shortages have led  market participants to stockpile shortage drugs or sell them at exorbitant  prices.
In November 2011, we found that weaknesses in FDA’s ability to respond  resulted in a predominately reactive approach to addressing shortages,  although this was partially due to the fact that, at the time our report was  issued, FDA did not have the authority to require manufacturers to notify   Our previous report contained  the agency of most impending shortages. several recommendations for FDA, including assessing the resources that  FDA allocates to its DSS; developing an information system to manage  data on shortages; ensuring that FDA’s strategic plan articulates goals  and priorities for maintaining the availability of drugs; and developing  results-oriented performance metrics related to FDA’s response to drug  shortages. FDA outlined actions it planned to take which were  consistent with these recommendations.
Subsequently, the enactment of FDASIA in July 2012 resulted in several  new requirements for FDA and manufacturers intended to address drug  shortages. (See table 1 for a summary of these provisions.)
section_title: The Number of Drug Shortages Remains High, Complicating Providers’ Ability to Care for Patients
paragraphs: The number of drug shortages remains high, with almost half of critical  shortages involving generic sterile injectable drugs. Provider association  representatives identified challenges in responding to drug shortages  without adversely affecting patient care.
subsections: section_title: The Number of Drug Shortages Remains High and Nearly Half Involve Generic Sterile Injectables
paragraphs: The number of drug shortages reported each year remains high, although  there was a decrease in 2012 relative to the record number of new  shortages reported in 2011. We found that from 2007 through 2011, the  number of drug shortages reported increased each year, with a record  255 shortages reported in 2011. However, in 2012, for the first time  since 2006, there was a decrease in the number of drug shortages  reported. Specifically, in 2012, 195 shortages were reported, which was a  24 percent decrease from 2011. As of June 30, 2013, 73 shortages had  been reported in 2013. (See fig. 2.)
Over half (55 percent, or 622) of the 1,132 shortages reported since  January 1, 2007, were for drugs that were in shortage more than once.  Specifically, 240 drugs were in shortage on multiple occasions between  January 1, 2007, and June 30, 2013, representing 622 individual  shortages.
For shortages reported since January 1, 2007, the duration of the  shortages varied, ranging from 1 day to over 5 years. The majority of  shortages—68 percent—lasted 1 year or less.the drug shortages over this period was 340 days—slightly less than a  year. (See fig. 3.)
section_title: Providers Struggle to Respond to Drug Shortages without Adversely Affecting Patient Care
paragraphs: Provider association representatives told us that a number of the  challenges that we reported in 2011 were still relevant for their members,  including delays in or rationing of care, difficulties finding alternative  drugs, risk associated with medication errors, higher costs, reduced time  for patient care, and hoarding or stockpiling of drugs in shortage. During a  shortage, providers may have to cancel or delay procedures, which can  have detrimental health effects on patients. Providers may also have to  ration care by prioritizing the patients who have a greater need for the  drug. For example, provider association representatives said that if a drug  is used in patients across age groups, but is essential for the care of  newborns, a hospital may institute a policy that the drug can only be  administered to newborns and will no longer be administered to adults.
In addition, representatives from the provider associations noted that  identifying effective, alternative drugs for those in shortage can be  difficult. In some cases, it may not be possible to find a suitable  alternative. For example, representatives from one of the associations we  spoke to said that emergency service providers have reported significant  difficulties finding alternative medications for stopping seizures and are  concerned with the viability of alternative therapies in certain emergency  situations. A representative from another association said that when  effective alternatives are identified and located, medication errors may  increase because the dosage of the alternative drug may differ from what  providers are accustomed to using.
Drug shortages may result in higher drug costs as well as greater risks to  patients. To obtain drugs in short supply, providers may turn to suppliers  they do not typically use, including authorized alternative suppliers,  compounding pharmacies, or gray market suppliers—those not  authorized by the manufacturer to sell the drug—who typically obtain  small quantities of a drug that is in short supply and offer it for purchase  at an inflated price. Drugs from alternative suppliers can cost  significantly more, and, in the case of compounding pharmacies, and gray  market suppliers, may pose risks to patients. An outbreak of fungal  meningitis in 2012 linked to contaminated compounded drugs—resulting  in over 60 deaths and hundreds of people becoming ill—has led to  questions about the safety and quality of compounded drugs. Because  the origin of a gray market drug may be unknown, there is no assurance  that it was stored and transported appropriately. As a result, patients who  receive treatment with such drugs may experience adverse events or  receive inadequate or inappropriate treatment. (See app. III for a  description of steps federal agencies have taken to respond to gray  market activities.)
Managing drug shortages also can detract from patient care. Providers  may develop and institute polices for distributing drugs in short supply to  patients, which some provider association representatives said may take  time away from caring for patients. They may also need to become  familiar with new products and different dosages, which may increase the  risk for medication errors and take time away from patient care.  Representatives from one provider association said that hospital  pharmacists might need to devote more time than usual to work with the  physician prescribing a drug that is in shortage to determine an  appropriate therapeutic alternative. In some instances, providers have  hired full-time staff whose positions are entirely devoted to managing drug  shortages. One provider association representative said a well-known  hospital system has eight full-time employees who only work on  addressing drug shortages. However, a few representatives noted that  smaller providers may not have the resources to hire full-time employees  and existing staff may have to take on additional responsibilities in order  to respond to shortages.
Finally, the mere threat of a potential shortage can cause problems for  patients and providers. While some provider association representatives  reported that the lack of advance notice of a shortage hinders their ability  to respond, most of the provider organizations we spoke with expressed  concern that reports of an impending shortage can lead to the hoarding or  stockpiling of drugs making it more difficult to access the drugs.
section_title: Quality Problems Coupled with Constrained Manufacturing Capacity Are Often the Immediate Causes of Drug Shortages, but There Are Potential Underlying Causes
paragraphs: Quality problems resulting in supply disruptions coupled with constrained  manufacturing capacity were frequently cited as the immediate causes of  recent drug shortages. However, we also identified multiple potential  underlying causes of shortages, all of which were related to the  economics of the generic sterile injectable drug market.
subsections: section_title: Supply Disruptions Stemming from Quality Problems Frequently Identified as Triggering Recent Shortages
subsections: section_title: Quality Problems Leading to Shortages
paragraphs: The most frequently cited immediate cause for a drug shortage was that a  manufacturer halted or slowed production after a quality problem was  identified, resulting in a supply disruption. These supply disruptions were  linked to, among other things, such problems as bacterial contamination  or the presence of glass or metal particles in drug vials. Representatives  from all eight manufacturers that we interviewed said that quality  problems have contributed to recent shortages. Our analysis of FDA  data shows that 40 percent of the shortages reported between January 1,  2011, and June 30, 2013, resulted from quality concerns, such as  particulate matter or plant maintenance issues.
In addition, most of the  studies we reviewed (16 of 20) reported that concerns about product  quality that led to supply disruptions have been the immediate cause of  most shortages. For example, one analysis found that quality problems  were the cause linked to the majority of shortages of sterile injectable  drugs. Another study found that the immediate cause of 46 percent of all  drug shortages in 2011 was a quality problem. According to this study,  the specific issues contributing to recent shortages have ranged from an  inability to ensure the sterility of products to the identification of particulate  matter in products.
According to another study, some of the largest manufacturers of sterile  injectable drugs have had quality problems that they chose to address by  temporarily closing or renovating their establishments, thereby reducing  or temporarily ceasing manufacturing of multiple drugs and leading to  supply disruptions. Some of the temporary plant closures were  proactively undertaken by the manufacturers themselves, while others  were undertaken as part of their response to a warning letter from FDA.  Such plant closures to address quality problems with certain drugs or  production lines can result in shortages of other drugs manufactured at  these establishments, including those not associated with quality  problems. One study noted that many shortages that are classified as  being caused by delays and capacity issues are technically caused by  supply disruptions related to quality. Our analysis of FDA data indicates  that manufacturing delays or capacity issues accounted for 30 percent of  the shortages reported between January 1, 2011, and June 30, 2013.  FDA officials told us that delays or capacity issues that triggered  shortages typically involved temporary shutdowns or slowdowns  undertaken to perform maintenance or, in many recent cases, for  remediation efforts, which then caused supply disruptions.
Although quality problems were a frequently cited issue, there was not  complete agreement as to whether quality problems were truly the trigger  for the supply disruptions that cause shortages. Specifically, one study  concluded that FDA has applied CGMPs more rigorously in its  inspections of manufacturing establishments, resulting in a greater  number of quality problems being identified and thus leading to  manufacturing supply disruptions that then triggered shortages. Another study suggested that an increase in FDA inspections of injectable drug  manufacturing establishments without evidence of an increase in quality  problems has contributed to shortages of generic sterile injectable  drugs. In addition, one manufacturer representative noted that FDA  investigators throughout the country may differ in their interpretations of  CGMPs, which the representative said creates uncertainty about whether  a manufacturer’s current processes will be found to be in compliance  during an FDA inspection. Therefore, from this manufacturer’s  perspective, FDA’s compliance actions have been the primary cause of  shortages with quality problems being a secondary cause. A second  manufacturer representative said that though quality problems have  contributed to recent shortages, from the manufacturer’s perspective,  quality standards have also been raised. However, one study countered  the claim that FDA’s enforcement has changed by stating that  manufacturers often identify quality problems and it is their discoveries  that trigger FDA inspections in the first place, rather than an increase in  agency scrutiny. This study also noted that CGMPs, which provide a  framework for a manufacturer to produce safe, pure, and high-quality  drugs, have not changed in recent years. One manufacturer  representative concurred that the CGMPs themselves had not changed.  However, this representative noted that as manufacturing technology  advances, the expectations of FDA investigators as to what represents  quality manufacturing may advance as well. For example, as new  manufacturing equipment becomes available, FDA investigators may  expect manufacturers to install the new equipment, even if using older  equipment will result in drugs of the same quality.
section_title: Other Immediate Causes of Shortages
paragraphs: Although not as prominently cited in the literature or the FDA data as  quality problems, we identified a number of additional factors that can  cause supply disruptions and ultimately result in shortages.
Permanent product discontinuations: Permanent product  discontinuations were another immediate cause of shortages. Our  analysis of FDA data shows that 12 percent of the shortages reported  between January 1, 2011, and June 30, 2013, resulted from product  discontinuations. According to several studies, the generic drug market is  extremely concentrated, with few manufacturers producing each drug. For  example, one study found that most generic sterile injectable drugs are  made by three or fewer manufacturers. As a result, the discontinuation  of a drug by a single manufacturer can have a significant impact on drug  availability. Two studies noted that older generic drugs may be  discontinued in favor of producing newer drugs that are more profitable or   Three manufacturer representatives said that  that have more demand.they take a number of factors into account when determining whether to  discontinue manufacturing a drug. The first manufacturer representative  said that in addition to price, they will also account for factors such as the  medical necessity and importance of the drug when making decisions  about what drugs to manufacture. The second manufacturer  representative said that they do not discontinue products if they know that  doing so would cause a shortage or exacerbate an existing one, although  the same representative also said that products with low sales or  profitability may be de-emphasized in favor of producing drugs with  greater demand. The third manufacturer representative also noted that it  is likely that a lower-margin product would be discontinued rather than a  higher-margin product. Two manufacturer representatives said that if a  drug is already in shortage, they will try to continue to manufacture it,  even at low or negative profit margins, to ensure that the drug remains in  the market.
Unavailability of raw materials or components: The unavailability of  raw materials, such as an active pharmaceutical ingredient (API), and  non-API components, such as vials, also contributes to shortages.
The  majority of the studies we reviewed cited the unavailability of raw  materials or non-API components as a cause of shortages and two  reported that there is often only one API source for a given drug. This  dependency on a sole API source can lead to shortages if availability  becomes a problem, regardless of the number of manufacturers of a  particular product. Most of the manufacturers’ representatives agreed  that the unavailability of API has caused some shortages, although some  representatives said that it was a relatively small percentage of them. For  example, a representative from one manufacturer said that the 2011  tsunami in Japan disrupted the API supply for one of its products and led  to a shortage. Although the manufacturer ultimately identified another  source for the needed material, FDA had to approve the manufacturer’s  new source, which was time-consuming. In addition, two manufacturer  representatives mentioned that issues with non-API components had  contributed to shortages. Our analysis of FDA data shows that 9 percent  of the shortages reported between January 1, 2011, and June 30, 2013,  resulted from the unavailability of APIs or non-API components.
Loss of a manufacturing site or site change: Our analysis of FDA data  shows that 3 percent of the shortages reported between January 1, 2011,  and June 30, 2013, were due to either the loss of a manufacturing site or  site change. One manufacturer representative said that while  manufacturers have experienced disruptions due to natural disasters, this  has been rare. In the literature, half of the studies (10 of 20) mentioned  natural disasters, such as floods or hurricanes, as a cause of shortages.  Loss of, or damage to, a manufacturing site was typically given as an  example of the supply disruption resulting from the disaster.
Increased demand: In addition to events that result in changes in supply,  we found that shortages can also be triggered by changes in demand.  Our analysis of FDA data shows that 6 percent of the shortages reported  between January 1, 2011, and June 30, 2013, were due to increased  demand. An increase in demand, which may occur for a variety of  reasons, such as the approval of an already marketed drug for a new  indication or new therapeutic guidelines, can trigger a shortage. A  shortage results because manufacturers cannot keep up with the  increase in demand that exceeds their expectations or planned  production. Increased demand was cited as a cause of shortages in 9 of  the 20 studies we reviewed.
Figure 6 summarizes information reported by manufacturers to FDA  about the causes of drug shortages that the agency then analyzes and  categorizes.
section_title: Constrained Manufacturing Capacity Often Viewed as Limiting Manufacturers’ Ability to Respond to Supply Disruptions
paragraphs: The inability of other manufacturers to make up for supply disruptions  experienced by their competitors due to constrained manufacturing  capacity was another immediate cause of shortages. Several of the  studies we reviewed generally concluded that the heavy concentration of  the generic drug industry leaves few manufacturers available to respond  to supply disruptions, leading to market-wide shortages. One study  found that seven manufacturers dominate the generic sterile injectable  market overall and also found that this market is even further  concentrated for specific therapeutic classes. Specifically, this analysis  indicated that in 2008, three manufacturers produced 71 percent of all  generic sterile injectable oncology drugs and that three manufacturers  held 91 percent of the market share of generic sterile injectable nutrients  and supplements. Illustrating the interplay between supply disruptions  and constrained manufacturing capacity, one 2010 study reported that a  shortage of the generic sterile injectable anesthesia drug propofol  resulted after one of the three manufacturers of the drug permanently  discontinued its manufacturing and another experienced quality problems  leading to a temporary halt in production, leaving the remaining  manufacturer unable to meet the demand of the entire market.
In addition to consisting of few manufacturers overall, we also found that  the manufacturing capacity of the generic drug industry has been further  challenged in recent years as the industry has expanded the number of  generic products it manufactures. This expansion has resulted as a large  number of brand-name drugs have lost patent protection, clearing the  way for generic manufacturers to produce generic equivalents of these  drugs. Two of the studies we examined cited the decisions of  manufacturers to begin producing the generic equivalents of brand-name  drugs as contributing to shortages by stretching already limited capacity.  For example, one study found that the generic sterile injectable market  had expanded by 52 percent between 2006 and 2010 without a  commensurate increase in manufacturing capacity, leading to high  utilization of available manufacturing capacity.manufacturers said that faced with limited capacity, when new generics  are available for production a manufacturer may make the decision to  stop producing some drugs to make room for the new products. As a  result, such discontinuations could lead to shortages, but representatives  from both manufacturers characterized this as a small factor in causing  shortages.
In addition to the challenge presented by having few manufacturers and  the increase in the number of generic drugs, pressures to produce this  large number of drugs on only a few manufacturing lines leaves the  manufacturers that do participate in the generic sterile injectable market   Since multiple drugs are often manufactured on the  with little flexibility. same line, increasing production of one drug reduces the supply of other  drugs and can lead to shortages. For example, one manufacturer  representative said that there are usually anywhere from 30 to 50  different drugs manufactured on a given line. Further, according to one  study, manufacturers of generic sterile injectable drugs do not typically  have redundant manufacturing facilities.almost 900 generic sterile injectable applications that were submitted to  the FDA and approved between 2000 and 2011, the authors found that  only 11 applications (about 1 percent) referenced a backup facility. This  becomes problematic when production in a given facility must stop for any  reason as manufacturers cannot immediately move production of a drug  to another facility. To do so, they must first obtain approval from FDA,  which can further delay production.
Specifically, in a review of  A related constraint cited in the literature is that some generic sterile  injectable drugs need to be manufactured on lines or in facilities  dedicated solely to those drugs. One study noted that certain sterile  injectable products, such as anti-infective and oncology drugs, require  lines, and sometimes whole facilities, which are limited to the production  of such drugs. For example, some anti-infective drugs, such as  penicillin, are highly sensitizing and can trigger serious allergic reactions  at very low levels and as a result, may be limited to specific  manufacturing lines. Further, another study noted that a supply disruption  on a dedicated line can result in shortages of multiple products of a  similar type, such as oncology drugs, because other manufacturers are  not able to step in due to limited capacity on their own lines.example, shortages of oncology drugs in 2011 were linked to just three  dedicated oncology lines that were operated by two manufacturers.
A final capacity-related constraint cited in the literature (9 of 20 studies),  was how the widespread use of “just-in-time” inventory practices can  increase the vulnerability of the supply chain to shortages. One of these  studies said that most manufacturers only produce enough of a drug to  satisfy current demand, so there is little, if any excess inventory, while  another study asserts that when a manufacturer has to stop production, a  supply disruption can result because of “just-in-time” inventory. One  manufacturer representative said that any manufacturer typically has only  a limited amount of inventory available. This representative said that  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, if an issue arises, a  shortage can quickly result.
The majority of manufacturer representatives we interviewed generally  concurred with our finding from the literature that a supply disruption, for  whatever reason, affecting one manufacturer can quickly lead to market- wide shortages because other manufacturers often cannot increase  production enough to meet demand. For example, one manufacturer  representative said that it had recently encountered capacity constraints  when two other manufacturers experienced supply disruptions and one  manufacturer exited the market. The representative from the  manufacturer that remained said that the company did not have the  capacity to ramp up production to meet the demand for all of the drugs at  risk of shortage and thus had to prioritize which drugs to produce, based  on market need and the severity of the shortages. Further complicating a  situation like this, representatives of two manufacturers said that even if  the remaining companies are able to increase their production of a drug  whose supply has been disrupted, it can take time—as much as   3 months—to increase production, particularly for sterile injectables due  to the complexity of manufacturing these products.
section_title: Drug Shortages May Stem From Underlying Causes
paragraphs: We identified multiple potential underlying causes of drug shortages in the  literature. Half of the studies (10 of 20) we reviewed suggested that the  immediate causes of drug shortages, such as quality problems, are driven  by an underlying cause that stems from the economics of the generic  sterile injectable drug market. The studies that cited underlying causes  did not all focus on the same underlying cause and manufacturer  representatives had mixed views on the potential underlying causes we  identified in the literature.
subsections: section_title: Competition Focused Primarily on Price
paragraphs: One underlying factor we identified in the literature is that when choosing  between different manufacturers of the same drug, purchasers may focus  primarily on price. Six of the 20 studies mentioned either low prices or low  profit margins as features of the generic drug market that may make it  vulnerable to shortages. Two of the studies suggested that low profit  margins in the generic market may affect manufacturers’ decisions to  invest in their facilities.expect all generic drugs to be of equivalent quality and may be unable to   Another of the six studies said that purchasers  discern differences in the quality of drugs, particularly sterile injectables.  As a consequence, purchasers of sterile injectables focus on price when  choosing among seemingly identical generic manufacturers at the  expense of any potential differences in quality and the ability to reliably  meet customer demand. According to this study, a manufacturer that  strives to exceed minimum manufacturing standards is not rewarded with  a willingness among buyers to pay more for the manufacturer’s products.  Therefore, using economic theory as a rationale, the authors suggested  that this reduces the incentive for the manufacturer to sufficiently invest in  maintenance or quality improvements at its manufacturing  establishments. The study suggests that the lack of reward for quality is  an underlying cause that may have led to manufacturers’ minimizing  investment in establishments, which has ultimately resulted in many of  the recent quality problems at generic sterile injectable manufacturing  establishments.
Five of the six drug manufacturer representatives that responded to this  claim reported that manufacturers continue to invest in upgrading existing  establishments and building new ones. One manufacturer  representative stated that some generic products in manufacturers’  portfolios are highly profitable and prompt investments in manufacturing  facilities. Another manufacturer representative said that they continue to  invest in making improvements to their sterile injectable facilities. For  example, they said that they have invested in spare capacity on some of  their lines, and as a result, are now better equipped to ramp up  production in response to a shortage.
section_title: Role of Group Purchasing Organizations
paragraphs: Group purchasing organizations (GPO), which negotiate purchasing  contracts with drug manufacturers on behalf of hospitals and other health  care providers, have been cited in the literature as potentially having an  underlying role in causing drug shortages. Four of the 20 studies  suggested that the operating structure of GPOs results in fewer  manufacturers producing generic drugs and this, in turn, contributes to a  more fragile supply chain for these drugs. For example, one of the four  studies asserted that GPOs reduce profits in the generic drug market,  where margins are already low. This study states that because of these  low manufacturer profit margins, when production problems arise,  manufacturers may stop producing certain products in lieu of making  investments in improvements at their establishments. Another of the  four studies theorized that when generic drug manufacturers fail to win  GPO contracts, manufacturers will either exit or decide not to enter the  market for those drugs, contributing to the immediate cause of  constrained manufacturing capacity.
All of the representatives of the three GPOs that we contacted disagreed  with the claim that GPOs are a cause of shortages. They emphasized that  they have an incentive to avoid drug shortages and ensure that the drug  manufacturers with which GPOs contact can meet GPOs’ members’  needs. Further, they said that while price is an important consideration in  determining the manufacturers with whom they contract, the ability of  manufacturers to ensure an adequate supply of products is critical.  According to one GPO representative, generic drug manufacturers are  generally profitable, which the GPO representative said demonstrates  that manufacturers are not being driven out of the market. All of the GPO  representatives also noted that in recent years GPOs have instituted  strategies to avoid shortages. For example, one GPO representative told  us that it typically tries to contract with two or more manufacturers for  drugs that have a recent history of being in shortage.
Of the five manufacturer representatives who commented on the claim,  three stated that GPOs may contribute to shortages by exerting  downward price pressure. However, one manufacturer representative  disagreed that GPOs were a cause and a second manufacturer  representative said that GPOs had no more of a role in causing shortages  than any other supply chain participant. While the second representative  said that GPOs contribute to the pressure to lower prices, the  representative also noted that every participant in the supply chain  contributes to the price competition. A third manufacturer representative  noted that, because manufacturers have already made investments in  production that they are unwilling to abandon, failing to obtain a GPO  contract does not cause them to exit the market for a given drug. Further,  representatives from the second and third manufacturers also told us that,  in the event that a major manufacturer does not obtain a GPO contract,  the manufacturer may send its sales force to hospitals directly and offer a  price that is lower than the GPO contract price. Hospitals may either  accept this lower priced offer or seek additional price concessions from  the contracted manufacturer through the GPO.
section_title: Change in Medicare Part B Reimbursement Policy
paragraphs: A change in Medicare Part B drug reimbursement policy was also cited in  the literature (5 of 20 studies) as an underlying cause of drug shortages.  In 2005, a change was implemented in how providers are reimbursed for  most Medicare Part B drugs administered in an outpatient setting. Three  studies we reviewed suggested that this change resulted in a sharp  decrease in reimbursement to providers.focused on oncology drugs, suggested that this decrease in  reimbursement caused providers to switch to higher-cost drugs for which  they would receive increased reimbursement, reducing demand for   One of the studies, which  generics. The other two studies suggested that this decrease in  reimbursement to providers also resulted in lower prices for  manufacturers. Two of the three studies suggested that manufacturers  responded by exiting the market for these products entirely, while the  third suggested that manufacturers reduced their investments in  manufacturing facilities, both of which left the generic sterile injectable  market vulnerable to shortages.
Four of the five manufacturer representatives who responded to this claim  did not view the change in Part B reimbursement policy as a main cause  of shortages, though they said it could have complicated the generic  market. For example, one manufacturer representative contended that it  had a negligible impact at most as the reimbursement is paid to  physicians, not manufacturers. The payments that manufacturers collect  are several steps removed from the physician’s reimbursement. In  addition, the representative stated that even if some providers switch to  more expensive alternative drugs in response to the reimbursement  change, the impact would be minimal as the vast majority of generic  sterile injectables are administered in hospital inpatient departments,  which means that they are not reimbursed through Medicare Part B.Finally, though drugs in at least one of the therapeutic classes that have  most frequently been in shortage in recent years may be reimbursed  through Part B based on the Average Sales Price methodology, the  extent to which all of the therapeutic classes driving recent shortages are  reimbursed in this manner is unclear.
Figure 7 summarizes the key immediate and potential underlying causes  of drug shortages that we found in our review of the literature.
section_title: FDA Is Improving Its Response to Drug Shortages, but Challenges Remain
paragraphs: Through a variety of efforts, FDA has prevented more potential shortages  and improved its ability to respond to shortages since we issued our  report in 2011. Among other things, FDA is working to improve its  response to drug shortages by implementing FDASIA’s requirements and  the recommendations we made in 2011. However, FDA lacks policies and  procedures for managing and using information from its drug shortage  database.
subsections: section_title: FDA Has Prevented More Potential Shortages and Has Improved Its Ability to Respond to Shortages That Do Occur
paragraphs: FDA has taken steps that have prevented more potential shortages and  improved its ability to resolve existing drug shortages since 2011,  including expediting review of ANDAs and supplements, working with  manufacturers to increase production, and using its regulatory discretion  to allow certain products to remain on the market or bring new products to  market. Based on our analysis of FDA data from January 2011 through  June 2013, FDA was able to prevent 89 potential shortages in 2011, 154  potential shortages in 2012, and 50 potential shortages through June  2013. This is more than the 35 potential shortages we found that FDA  prevented in 2010 and the 50 prevented through June 2011. FDA officials  told us that although they relied on many of the same steps to prevent  and resolve shortages prior to the enactment of FDASIA, FDASIA’s  requirement that manufacturers notify FDA in advance of a potential  shortage allowed FDA to employ those steps sooner. FDA officials said  the notification requirement has helped the agency become more  proactive and successful in its efforts. FDA officials noted there has been  a sizeable increase in notifications with a six-fold increase after issuance  of the drug shortages Executive Order in October 2011, a subsequent  doubling of that rate after the enactment of FDASIA in July 2012, and a  return to the Post-Executive Order notification rate in 2013.
FDA has expedited a number of agency actions to prevent or resolve  shortages, in accordance with relevant FDASIA provisions. For example,  FDA may expedite the review of ANDAs, or supplements to NDAs and  ANDAs, to help bring an alternative drug to market or authorize an  additional API supplier or manufacturing site. FDA officials said the  agency has also expedited inspections to facilitate improvements at  manufacturing establishments. Expediting inspections that are required  before an ANDA or supplement is approved also facilitates the availability  of a needed drug. Manufacturer representatives we spoke with noted that  in some cases expedited reviews or inspections have happened quickly  and have helped prevent shortages. However, others told us that some  application reviews or inspections have taken a long time, limiting the  manufacturers’ ability to help prevent or resolve a shortage. For example,  one manufacturer representative said waiting for FDA’s approval of ANDA  supplements related to new raw material suppliers has been a key  hindrance to the manufacturer’s ability to respond to drug shortages.
In addition, FDA routinely contacts manufacturers regarding their ability to  increase production in response to a potential or actual drug shortage.  Although a number of manufacturer representatives said that ramping up  production takes time and may not always be possible, given production  capacity constraints, FDA has reported some successes. For example,  when FDA determined that an impending product discontinuation might  result in a shortage of a drug that treats shingles and chickenpox, it  encouraged another manufacturer to increase production, thus avoiding a  shortage. Similarly, when quality problems were identified in a drug used  to treat eye infections in patients with acquired immune deficiency  syndrome, FDA reached out to another manufacturer that was able to  increase production to avert a potential shortage. Manufacturer  representatives said manufacturers will generally increase production, if  possible, when FDA advises them of a shortage. FDA reported to us that,  from January 1, 2011, to June 30, 2013, its encouragement to  manufacturers to increase production helped prevent or resolve 41  shortages.
FDA officials said that in appropriate cases, the agency may attempt to  use its regulatory discretion to keep products from going into short supply  or from making an active shortage worse. FDA may use its discretion in  deciding whether to take a certain action. FDASIA requires FDA to  consider whether an enforcement action or issuance of a warning letter could reasonably cause or exacerbate a shortage of a life-saving drug.If FDA reaches such a determination, 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. FDA officials said  that they had used their regulatory discretion prior to the enactment of  FDASIA and were continuing to do so, through communication across  various FDA offices and with manufacturers. Officials noted that they try  to balance the risk to patients when making their decisions. That is, they  consider the risk of allowing the continued distribution of the product— despite the problems related to the possible enforcement action or  warning letter—against the public health risks of the product not being  available. FDA officials said they also continue to use their regulatory  discretion to temporarily allow the importation of “unapproved drugs” into  the United States to help prevent or resolve shortages of FDA-approved  drugs that are critical to patients, in rare cases where the shortages  cannot be resolved by manufacturers willing and able to supply the FDA- approved drugs in the immediate future. We previously reported that  FDA had allowed for the importation of seven unapproved drugs from  January 2011 through September 2011. FDA officials told us that, through  June 30, 2013, they have subsequently allowed for the importation of nine  additional unapproved drugs. For example, when the manufacturer of a  drug used to treat patients who require total parenteral nutrition lost the  use of a manufacturing site, FDA allowed importation of a comparable  version of the drug not approved by FDA to prevent a potential shortage  from occurring.
Several stakeholders commented that FDA’s efforts to allow the  importation of unapproved drugs to address a shortage have improved,  which has helped to resolve some critical shortages. However, some  stakeholders noted that certain shortages could not be resolved quickly  because it took a long time for FDA to respond to providers’ requests to  allow importation. For example, some stakeholders noted that delays in  the importation of total parenteral nutrition products created significant  challenges for treating patients who depend upon them. To help speed up  the process of temporary importation, FDA officials said that since  January 2012 they have proactively identified foreign manufacturers that  have expressed a willingness to import their drugs to help with a  shortage. Officials said this has allowed them to reach out to companies  more quickly and has already helped the agency address one shortage.
FDA has also reported using its regulatory discretion in other ways. For  example, the manufacturer of a drug that may slow the progress of the  human immunodeficiency virus and acquired immune deficiency  syndrome lost its component supplier and was forced to find a new one.  However, this new supplier was experiencing a quality problem. FDA  used its regulatory discretion to allow the manufacturer to use the new  component supplier while quality problems were being addressed after it  determined those issues posed no significant risks to public health. In  another instance, FDA used its regulatory discretion to allow the  continued marketing of a drug, despite a manufacturing deviation, after  determining the benefits of having the drug available outweighed the risk  associated with the manufacturing error.
section_title: FDA Is Working to Further Improve Its Response to Drug Shortages
paragraphs: FDA is taking steps to further enhance its ability to respond to shortages.  Some of the agency’s actions are required by FDASIA, some are in  response to recommendations we made in 2011, and others were  initiated by the agency. For example, FDA has established the Drug  Shortages Task Force as required by FDASIA. FDA officials said the  Drug Shortages Task Force has helped FDA revise internal policies and  procedures, track the development of the proposed regulations for  implementing the manufacturer notification requirements, and generally  coordinate across the agency on issues related to drug shortages.
As required by FDASIA, FDA officials also noted that they have continued to work with  DEA on shortages related to controlled substances. describes how providers and others can report a potential drug shortage.  The e-mail address and toll-free number listed on the website are the  main mechanisms through which FDA receives drug shortage-related  reports from health care providers or other third-party groups.
FDASIA requires FDA to maintain an up-to-date list of drugs that it  determines to be in shortage and—subject to public health, trade secret,  and confidentiality concerns—make the list publicly available. FDA  officials told us that, upon receiving notification of a potential drug  shortage, the agency works to verify whether a shortage exists through  contacting the drug’s manufacturer to determine supply levels and  comparing that to industry sales data on historical demand for the  product. Once FDA determines that the amount of the drug—or  pharmaceutical equivalents—appears to be insufficient to meet demand,  the agency posts information about the shortage on its drug shortages  website. Though FDA takes steps to respond to all shortages about which  the agency is informed, officials said the agency places the highest  priority on responding to shortages of drugs that it considers medically  necessary. Nevertheless, officials said that FDA’s website includes all  verified shortages, regardless of whether the drug is determined to be  medically necessary. However, FDA officials noted that the agency  may not be notified of all potential shortages, because FDASIA only  requires manufacturers to report disruptions in the production of drugs  that are life supporting, life sustaining, or used to treat debilitating health  issues. Though health care professionals can also notify FDA about  potential shortages, FDA officials told us that the agency is less likely to  be notified about shortages of drugs for which there are easy substitutes  or little patient impact.
In July 2012, as required by FDASIA, FDA began classifying the reasons  for shortages using standardized terminology specified in the law and  posting this information on its website along with information on estimated  shortage duration. Also, though not required by FDASIA, in July 2013  FDA added information on the therapeutic categories of drugs in shortage  to its drug shortages website. This change allows users, for example, to  view all oncology shortages in one place, rather than having to review the  entire list of drugs in shortage and identify individual drugs used in  oncology themselves. FDA plans to improve the functionality of the  website further by allowing users to sort shortages by other types of  information as well. A number of stakeholders noted that the  improvements to FDA’s drug shortage website help them keep informed  about drug shortages. However, some expressed disappointment with the  passive nature of the website as stakeholders must proactively visit the  website as opposed to receiving automated alerts. A number of  stakeholders noted that notifications of shortages by therapeutic class  would be particularly helpful for communicating the potential for a  shortage to targeted groups earlier. FDA officials said that they plan to  add active alerts by therapeutic category to the website.
Although FDA continues to refine the information on its website, it is  nonetheless dependent on what manufacturers report to the agency: the  reported reasons for a shortage and the estimated length of the shortage.  The information FDA receives from manufacturers and other sources may  be incomplete and may change over time. As a result, the information on  the website may not always be current and accurate. Stakeholders noted  that the reasons given for the shortages are often categorized as “other”  which can make it difficult to understand why a drug is in shortage. FDA  officials said they use the category “other” when none of the classifying  terminology required by FDASIA directly applies, although FDA officials  said they try to include available details to help explain the cause of the  shortage. In addition, FDA may not be able to publicly post all of the  information the agency receives from manufacturers because some of the  information provided to FDA is proprietary. Although some stakeholders  reported that information on the duration of a shortage is one of the most  useful pieces of information that can be provided, others noted that the  estimated shortage resolution dates on FDA’s website are not always  reliable. Two stakeholders said that the estimated duration for a shortage  is often listed as “unavailable” or “to be determined,” which is not  particularly helpful. Stakeholders noted that such inaccuracies may limit  their ability to plan ahead. For example, a representative of one provider  group noted that in order to plan for the multiple rounds of a patient’s  chemotherapy regimen, the provider would need to be sure that there will  be a sufficient supply of the drug for the second round of chemotherapy  before starting the first. Manufacturer representatives said the complexity  of a manufacturing disruption often makes it difficult to provide FDA  accurate estimates of the time it will take to resolve the disruption.
FDA has also taken steps to respond to the recommendations we made  in our 2011 report. In response to our recommendation that FDA develop  an information system that would allow drug shortage data to be tracked  in a systematic manner—to be consistent with the internal control  standards for the federal government—the agency developed a drug  shortage database that is used on a daily basis to track shortages,  document the actions FDA takes to prevent and resolve shortages, and  monitor the workload of DSS personnel. All FDA offices can access the  database; however, the officials we spoke with said they request  information from DSS instead of accessing the database directly. In  September 2013, FDA informed us that it is now planning to transition  from its existing database to an information system with additional  capabilities and functionality. For example, FDA officials said they are  planning to automate some of the data fields by extracting information  from other sources that provide NDCs, market share, and other relevant  product information. This may reduce the likelihood of manual entry errors  and speed up the entry of some shortage information. The officials said  the establishment of an information system could also help facilitate  analysis related to drug shortages. However, they were unable to provide  us with a description of the types of analyses they would conduct.
FDA has also taken steps to respond to our recommendation related to  the resources allocated to the drug shortage program. FDA has since  increased the number of DSS personnel from 4 in 2011 to 11 in 2013 and  officials said this has improved FDA’s ability to respond to drug shortages  in a number of ways. First, it allowed FDA to assign each manufacturer  experiencing a shortage a specific contact person, which FDA officials  said has allowed the agency and the manufacturers to develop better  working relationships and has improved information sharing.  Representatives from one manufacturer we spoke with agreed that this  effort has improved their relationship with FDA. In addition, a number of  stakeholders, including other manufacturers’ representatives, noted it is  now easier to contact DSS officials and that discussions have become  more regular. Second, FDA officials said having additional staff has  allowed them to respond more quickly to manufacturer notifications and to  identify possible approaches to preventing or resolving a shortage. Some  stakeholders also noted that FDA reached out to them for additional  information on specific drug shortages or the availability of certain drugs.  Third, officials said it has allowed DSS to play a bigger role in revising  drug shortage policies and procedures.
FDA also improved the staffing resources available for responding to drug  shortages by assigning drug shortage coordinators in each of its 20  district offices. In addition, it developed written procedures to enhance  coordination between headquarters staff in DSS, the CDER Office of  Compliance, and staff in the district offices on issues related to drug  shortages.have helped bring drug shortage-related concerns to light earlier, such as  violative inspections at establishments that manufacture a large volume of  drugs. Officials said this has improved FDA’s ability to work with such   FDA officials told us that the drug shortage coordinators  manufacturers early in order to prevent drug shortages. FDA held a  retreat in July 2012 to educate the drug shortage coordinators and other  staff on FDA’s processes for responding to drug shortages. The retreat  included a number of FDA offices, including CDER Office of Compliance,  DSS, Office of Generic Drugs, Office of New Drug Quality Assessment,  and Office of Regulatory Affairs, and officials said the retreat helped  attendees understand drug shortage responsibilities of the various FDA  offices.
As required by FDASIA, FDA’s Drug Shortages Task Force developed a  strategic plan that identifies its goals and priorities for mitigating and  resolving ongoing shortages and for preventing future shortages. This is  also in line with our 2011 recommendation that FDA ensure that the  agency’s strategic plan articulates goals and priorities for maintaining the  availability of all medically necessary drugs. Though FDA officials said the  agency has not made this change in the agency-wide strategic plan,  FDA’s drug shortages strategic plan includes two goals related to  maintaining drug availability, each with a number of tasks for achieving  the goal. The first goal—to improve and streamline FDA’s current  mitigation activities once the agency is notified of a supply disruption or  shortage—includes four tasks: streamline internal FDA processes;  improve data and response tracking; clarify roles and responsibilities of  manufacturers; and enhance public communication about drug shortages.  The second goal—to develop prevention strategies to address the  underlying causes of production disruptions to prevent drug shortages— contains three tasks: develop methods to incentivize and prioritize  manufacturing quality; use regulatory science to identify early warning  signals of shortages; and increase knowledge to develop new strategies  to address shortages. As part of this second goal, the strategic plan  describes efforts FDA is considering to help address manufacturing and  quality issues, including broader use of manufacturing metrics to assist in  the evaluation of manufacturing quality and developing incentives for  high-quality manufacturing.
Finally, FDA officials said that their annual report on drug shortages,  which was due December 31, 2013, will contain information on  performance measures to assess and quantify the implementation of the  agency’s goals and response to drug shortages, as we recommended in  2011. As of January 31, 2014, the annual report has not been released.
section_title: FDA Lacks Policies and Procedures for Its Use and Management of Drug Shortage Data
paragraphs: While FDA is planning on establishing a new information system to track  drug shortage data, it lacks policies, procedures, and specific training  materials related to management and use of its existing drug shortage  database. While FDA did create a database glossary, which briefly  defines a number of the data fields, an official told us that no other  documents or training materials have been created because staff use the  existing database every day and are therefore familiar with its operation.  Further, while FDA officials said they plan to create policies for entering  data in the planned new drug shortage information system and create a  tutorial for users, they have not yet done so. This lack of documentation  may limit the agency’s ability to communicate proper use of the existing  and new databases to staff and could also ultimately lead to  inconsistencies in the use of the database. The lack of policies and  procedures is also inconsistent with internal control standards for the  federal government, which state that agencies should have controls over  information processes, including procedures and standards to ensure the  completeness and accuracy of processed data. For example, internal  controls require the appropriate documentation of system controls and  that such documents be readily available for review. Such documentation  may include management directives, administrative policies, and  operating manuals; none of which have been prepared for the existing  database.
Related to FDA’s lack of policy and procedures for its existing drug  shortage database, we also found that FDA lacks sufficient controls to  ensure the quality of the data in the existing database. For example, FDA  officials said there are no automated data checks to ensure the accuracy  of the data in the database. Instead, officials review the data for accuracy  at the end of each year by relying on their memories of events, emails,  and meeting notes. The first such data check was completed in 2012.
Officials said they plan to perform another such review at the end of 2013,  in preparation for the annual report to Congress. This practice is  inconsistent with the internal control standards for the federal  government, which require agencies to design controls, which may  include data checks that help ensure completeness, accuracy, and  validity of database entries. Without such data checks, FDA’s existing  database may be more likely to have errors, incomplete data, and  inconsistent data. We asked officials to provide us with any  documentation of their 2012 review of the existing database for accuracy  and they were unable to do so. FDA officials said they plan to incorporate  automated data checks in their new information system, which may  eliminate the need for subsequent manual quality checking. FDA officials  told us that, as of January 2014, any new drug shortages will be entered  into their new information system.
In addition, FDA has not conducted routine analyses of its existing drug  shortage database to identify, evaluate, and respond to the risks of drug  shortages proactively. Again, according to the internal control standards  for the federal government, agencies should comprehensively identify risk  through qualitative and quantitative methods, including data collected in  the course of their work. FDA’s drug shortages strategic plan states  that the agency will explore using risk-based approaches to identify early  warning signs of problems that could lead to production disruptions.  However, FDA currently uses data on an ad hoc basis to respond to  specific shortages as opposed to using the data to identify trends or  patterns that may help it predict and possibly prevent shortages.  According to FDA officials, other than producing the annual report  required by FDASIA, the agency has not established regular schedules  for generating reports in the database and is not currently using the  database to conduct regular trend analyses. By only using the database  to respond to individual shortages as they occur, FDA is missing  opportunities to use the data proactively to enhance the agency’s ability  to prevent and mitigate drug shortages.
section_title: Conclusions
paragraphs: FDA has made progress in preventing potential drug shortages and  responding to actual shortages since we issued our last report in 2011. In  part, this progress can be attributed to the new FDASIA requirement that  manufacturers provide FDA with information about potential or current  shortages of drugs that are life supporting, life sustaining, or used to treat  debilitating health issues. This additional information has improved the  agency’s ability to act more quickly when it learns of a potential shortage.  Yet, the number of shortages remains high, despite the fact that FDA has  taken steps to prevent and mitigate shortages, such as expediting  application reviews and inspections, exercising enforcement discretion in  appropriate cases, and helping manufacturers respond to quality  problems. Many shortages are prolonged, with some spanning multiple  years. As a result, patients and providers continue to struggle as essential  and life-saving medications—such as anti-infective, nutritive, and  cardiovascular drugs—remain in short supply. These shortages  complicate patient care and may lead to adverse outcomes with serious  consequences.
Although there are potential underlying causes of drug shortages, FDA  has made important strides in responding to some immediate causes.  However, some of the causes identified in our literature review and  conversations with manufacturers are beyond the agency’s authority, as it  does not have control over private companies’ business decisions. For  example, FDA is unable to require manufacturers to start producing or  continue producing drugs, or to build redundant manufacturing capacity,  regardless of the severity of a shortage. Nonetheless, FDA can take steps  to maximize the agency’s ability to use the information at its disposal to  address drug shortages. We continue to believe in the importance of our  prior recommendation that FDA should develop an information system  that would facilitate the agency’s response to shortages. FDA took the  first step in implementing this recommendation by creating a database on  drug shortages. However, a key component of any system is assuring the  reliability of the data. Our current work shows that the agency lacks  adequate policies and procedures governing the use of its database, as  well as sufficient checks to ensure the data’s reliability—in both cases,  the failure to do so is inconsistent with internal controls for the federal  government. These shortcomings could hinder FDA’s efforts to  understand the causes of shortages as well as undermine its efforts to  prevent them from occurring. Additionally, FDA’s ability to manage risk- based decisions, including when to use regulatory discretion, and  proactively help prevent and resolve shortages may be hindered by its  lack of routine analysis of the data it collects. FDA may be missing an  opportunity to identify causes of shortages, risks for shortages, and  patterns in events which may be early indicators of shortages for certain  types of manufacturers, drugs, or therapeutic classes. Though FDA has  taken important steps to better prevent and address shortages, the large  number of potential shortages itself suggests a market still at risk of  continuing supply disruptions.
section_title: Recommendations
paragraphs: To enhance its oversight of drug shortages, particularly as the agency  fine-tunes the manner in which it gathers data on shortages and  transitions from its database to a more robust system, we recommend  that the Commissioner of FDA take the following two actions: develop policies and procedures for the use of the existing drug  shortages database (and, ultimately, the new drug shortages  information system) to ensure staff enter information into the database  in a consistent manner and to ensure the accuracy of the information  in the database; and  conduct periodic analyses using the existing drug shortages database  (and, eventually, the new drug shortages information system) to  routinely and systematically assess drug shortage information, and  use this information proactively to identify risk factors for potential  drug shortages early, thereby potentially helping FDA to recognize  trends, clarify causes, and resolve problems before drugs go into  short supply.
section_title: Agency and Third- Party Comments and Our Evaluation
paragraphs: We provided a draft of this report for comment to HHS, the Department of  Justice, and the Federal Trade Commission. We also provided excerpts  of this report for comment to the Department of Defense, the Department  of Homeland Security (for review of the U.S. Coast Guard), the  Department of Veterans Affairs, and UUDIS. We received written  comments from HHS, which are reproduced in appendix V. We also  received technical comments from HHS, the Department of Defense, the  Federal Trade Commission, and UUDIS, which we incorporated as  appropriate. The Department of Homeland Security, the Department of  Justice, and the Department of Veterans Affairs did not have any  comments based on their review.
In its comments, HHS stated that drug shortages remain a significant  public health issue and emphasized its commitment to preventing new  shortages and resolving those that are already ongoing. HHS agreed with  our recommendations to enhance its oversight by developing policies and  procedures for its drug shortages database and by conducting periodic  analyses of these data to identify drug shortage risk factors. Regarding  our first recommendation, HHS said it agrees that policies and  procedures for data entry are important to help assure the timely,  accurate, and consistent inputting of data into its drug shortage database.  Regarding our second recommendation, HHS agreed that it could make  better use of its drug shortage data to identify trends, clarify causes of  shortages, and resolve problems before drugs go into short supply.  However, HHS noted that there are many factors that can trigger or  exacerbate a shortage and that it lacks some relevant data, such as  detailed information on manufacturing capability, to create a  comprehensive forecasting system for drug shortages. We acknowledge  that the agency’s access to certain information is limited, but believe that  routine analysis of available data could nonetheless reveal some early  indicators of shortages.
Although HHS agreed with our recommendations, it took issue with our  use of UUDIS data concerning the persistence of recent shortages. HHS  said that these data may overstate the number of shortages that persist  because UUDIS considers a shortage to be ongoing unless all NDCs for  a given product are available, even if some manufacturers that currently  produce the drug have increased production enough to meet all demand.  We recognize that there are differences in the way UUDIS and FDA  define, and therefore count, shortages. Our report notes that FDA  considers a shortage to be resolved when the total supply of the drug and  any pharmaceutical equivalents is sufficient to meet demand in the  market overall. UUDIS defines shortages more broadly, focusing on  supply issues that affect how pharmacies prepare and dispense a product  or that influence patient care when prescribers must choose an  alternative therapy because of supply issues. According to a UUDIS  official, tracking all NDCs for all manufacturers is important for providers  because using substituting one package size for another may create a  safety issue. To enhance clarity, we have provided additional detail in our  report to describe UUDIS’s methods for defining and tracking shortages.
Moreover, it is important to note that we used UUDIS data because FDA  was unable to provide data on shortages that would allow for an analysis  of trends. As we have previously reported, until FDA established a  database containing shortage information in 2011, the agency did not  systematically maintain data on shortages. In the absence of FDA data,  the data from UUDIS was the only data that we could identify that would  allow for a meaningful analysis of drug shortages over time.
We are sending copies of this report to the Secretary of the Department  of Health and Human Services, the Attorney General, the Chairman of the  Federal Trade Commission, appropriate congressional committees, as  well as 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 make key contributions to this  report are listed in appendix VI.
section_title: Appendix I: Scope and Methodology - Trends in and Causes of Drug Shortages
paragraphs: As part of our report objectives, we reviewed the trends in recent drug  shortages and examined the causes of drug shortages. This appendix  provides further detail on our methods.
subsections: section_title: Trends
paragraphs: To review the trends in recent drug shortages, we identified the number of  drugs that were in short supply from January 1, 2007, through June 30,  2013, and examined the characteristics of drugs that were reported to be  in shortage from June 1, 2011, through June 30, 2013. Specifically, to  review trends in recent drug shortages that occurred from January 1,  2007, through June 30, 2013, we analyzed data from the University of  Utah Drug Information Service (UUDIS), which were the most recent data  available at the time we did our work. These data are generally regarded  as the most comprehensive and reliable source of drug shortage  information for the time period we reviewed and are what we used in  preparing our 2011 report. We focused our analysis on shortages of  prescription drugs.(1) the total number of new shortages reported each year and (2) the total   We reviewed UUDIS’ drug shortage data to identify  number of active shortages each year. To calculate the total number of  new shortages reported each year, we counted shortages only for the  year in which UUDIS was first notified and not in any subsequent years  during which the shortage may have been active. To calculate the  number of active shortages in each year, we included both shortages  reported that year and any shortages that had started in a prior year, but   We also identified the duration of any  were still ongoing during the year.shortages reported from January 1, 2007, through June 30, 2013, and the  number of drugs that had been in short supply on more than one  occasion. To identify drugs that had been in short supply more than once,  we grouped together shortages of clinically interchangeable versions of a  drug that were administered through the same route, such as injection.  We confirmed our grouping of these shortages with a knowledgeable  pharmacist from UUDIS.
To analyze the characteristics of shortages, we reviewed 219 drug  shortages that were newly reported between June 1, 2011, and June 30,  2013, and that UUDIS identified as critical. These critical shortages were  a subset of the total number of shortages reported during this time.  Specifically, these 219 shortages represented 57 percent of the 382  shortages reported between June 1, 2011, and June 30, 2013. UUDIS  identified these shortages as critical because alternative medications  were unavailable, the shortages affected multiple manufacturers, or it  received multiple reports from different institutions. For these critical  shortages, we obtained drug shortage bulletins created by UUDIS, which  contain the national drug codes (NDC) associated with each shortage.
Using these NDCs, we analyzed Red Book data to determine the product  types, routes of administration, and therapeutic classes of the critical  shortages. We reviewed all UUDIS data for reasonableness, outliers,  and consistency, and determined that the data were sufficiently reliable  for our purposes.
section_title: Causes
subsections: section_title: Literature Review
paragraphs: To examine the causes of recent drug shortages, we conducted a  structured search of research databases using various combinations of  relevant search terms including, “drug”, “shortage”, “supply”, “medication”,  and “generic” to identify any literature published from January 1, 2003,  through June 30, 2013, that reported on the causes of drug shortages.  We then reviewed the abstracts for 714 articles and the full-text of 176 of  those articles to determine whether they addressed the causes of drug  shortages and met our inclusion criteria. Our inclusion criteria included  journal articles and government publications, as well as policy briefs or  papers, in which the causes of drug shortages were examined through  the presentation of original research. Because there is not a large volume  of peer-reviewed literature that incorporates original research, we also  included articles that provided an in-depth discussion of the causes of  drug shortages. However, we excluded editorials and news wire articles  from our review. Finally, we included directly relevant studies to which we  were referred by stakeholders, but which did not appear in our initial  search. Based on these steps, we identified 20 articles that were  published between March 1, 2005, and March 31, 2013, and then  summarized the causes of shortages on which these articles reported.While our search criteria were for shortages of all drug types, the majority  of the articles we identified were focused on generic sterile injectables,  which have frequently been in shortage in recent years. For the purposes  of reporting on our literature review, we identified and summarized the  causes frequently discussed in the literature and did not list all topics  mentioned in each article we reviewed. Some causes that were  mentioned only sparingly in the literature were not included in our review.
section_title: Articles Included in Literature Review
paragraphs: American Society of Health-System Pharmacists. “ASHP Guidelines on  Managing Drug Product Shortages in Hospitals and Health Systems.”  American Journal of Health-System Pharmacy, vol. 66, no.15 (2009):  1399-1406.
Balkhi, B., L. Araujo-Lama, E. Seoane-Vazquez, R. Rodriguez-Monguio,  S. L. Szeinbach, and E. R. Fox. “Shortages of Systemic Antibiotics in the  U.S.A.: How Long Can We Wait?” Journal of Pharmaceutical Health  Services Research, vol. 4, no. 1 (2013): 13-17.
Born, K. “Time and Money: An Analysis of the Legislative Efforts to  Address the Prescription Drug Shortage Crisis in America.” The Journal  of Legal Medicine, vol. 33, no. 2 (2012): 235-251.
Department of Health and Human Services. Office of the Assistant  Secretary for Planning and Evaluation, Economic Analysis of the Causes  of Drug Shortages. Washington, D.C.: October 2011.
Department of Health and Human Services. Food and Drug  Administration. A Review of FDA’s Approach to Medical Product  Shortages. Silver Spring, Md: October 2011.
Dorsey, E. R., J. P. Thompson, E. J. Dayoub, B. George, L. A.  Saubermann, and R. G. Holloway. “Selegiline Shortage: Causes and  Costs of a Generic Drug Shortage.” Neurology, vol. 73, no. 3 (2009): 213- 217.
Gatesman, M. L., and T.J. Smith. “The Shortage of Essential  Chemotherapy Drugs in the United States.” The New England Journal of  Medicine, vol. 365, no. 18 (2011): 1653-1655.
Gehrett, B. K. “A Prescription for Drug Shortages.” JAMA: The Journal of  the American Medical Association, vol. 307, no. 2 (2012): 153-154.
Graham, John. R. The Shortage of Generic Sterile Injectable Drugs:  Diagnosis and Solutions. Midland, Mich.: Mackinac Center for Public  Policy, June 2012.
Griffith, M. M., A. E. Gross; S.H. Sutton, M.K. Bolon. J. S. Esterly, J. A.  Patel, M. J. Postelnick, T. R. Zembower, and M. H. Scheetz. “The Impact  of Anti-infective Drug Shortages on Hospitals in the United States: Trends  and Causes.” Clinical Infectious Diseases, vol. 54, no. 5 (2012): 684-691.
Hoffman, S. “The Drugs Stop Here: A Public Framework to Address the  Drug Shortage Crisis.” Food and Drug Law Journal, vol. 67, no. 1 (2012):  1-22.
Jensen, V., R. Kimzey, and J. Saliba. “An Overview of the FDA’s Drug  Shortage Program.” Pharmacy and Therapeutics, vol. 30, no. 3 (2005):  174-175 & 177.
Jensen, V., and B. A. Rappaport. “The Reality of Drug Shortages—The  Case of the Injectable Agent Propofol.” The New England Journal of  Medicine, vol. 363, no. 9 (2010): 806-807.
Johnson, P. J. “The Ongoing Drug Shortage Problem Affecting the NICU.”  Neonatal Network, vol. 31, no. 5 (2012): 323-327.
Kweder, S.L., and S. Dill. “Drug Shortages: The Cycle of Quantity and  Quality.” Clinical Pharmacology & Therapeutics, vol. 93, no. 3 (2013):  245-251.
Schweitzer, S. O. “How the U.S. Food and Drug Administration Can Solve  the Prescription Drug Shortage Problem.” American Journal of Public  Health, vol. 103, no. 5 (2013): e10-e14.
U.S. House of Representatives. Committee on Oversight and  Government Reform. Staff Report. “FDA’s Contribution to the Drug  Shortage Crisis.” (Washington, D.C.: June 2012).
Ventola, C. L. “The Drug Shortage Crisis in the United States: Causes,  Impact, and Management Strategies.” Pharmacy and Therapeutics, vol.  36, no.11 (2011): 740-742 & 749-757.
Woodcock, J., and M. Wosinska. “Economic and Technological Drivers of  Generic Sterile Injectable Drug Shortages.” Clinical Pharmacology &  Therapeutics, vol. 93, no. 2 (2013): 170-176.
Yurukoglu, A. “Medicare Reimbursements and Shortages of Sterile  Injectable Pharmaceuticals.” National Bureau of Economic Research  Working Paper No.17987 (2012).
section_title: Stakeholder Views
paragraphs: We also interviewed, and in some cases, obtained written responses  from, manufacturers and group purchasing organizations (GPO)  regarding the causes of drug shortages identified through our literature  review because the reported causes we identified were related to the role  that these stakeholders have in the drug supply chain. We interviewed  three leading national associations representing drug manufacturers, both  brand-name and generic, and five generic sterile injectable  manufacturers. Specifically, we selected the top three manufacturers of  generic sterile injectables between 2010 and 2012. We also selected two  additional manufacturers, which were among the manufacturers  associated with the highest number of shortages, according to a 2011  report by the IMS Institute for Healthcare Informatics. We provided  manufacturers and manufacturer associations with a list of potential  causes based on our review of the literature and asked them to comment  on each cause either through interviews or in writing. Finally, we selected  the three largest GPOs based on their self-reported purchasing volume in  fiscal year 2011 and asked each to comment on causes in writing.
section_title: Analysis of FDA Data
paragraphs: We also analyzed FDA data on the reported causes of shortages for all  shortages that it was notified about from January 1, 2011, through   June 30, 2013. All data came from the database that FDA has developed  to track shortages and reflects information reported by manufacturers to  FDA that is subsequently analyzed and categorized by the agency. FDA  defines a shortage as when the total supply of a drug and any  pharmaceutical equivalents is inadequate to meet demand. FDA’s  definition of a shortage differs from UUDIS’ and UUDIS also tracks  shortages that do not meet FDA’s definition of a shortage. For example,  according to FDA officials, UUDIS will track shortages that only affect one  manufacturer, even if other manufacturers of the same drug have supply  available. FDA, however, will not consider such a situation to be a  shortage if the other manufacturers that can supply the drug can meet  national demand. We interviewed FDA Drug Shortages Staff about the  data and reviewed it for reasonableness, outliers, and consistency, and  for our purposes, we determined that the data were sufficiently reliable.
section_title: Appendix II: List of Organizations Interviewed
subsections: section_title: Federal Agencies
section_title: Provider Organizations
section_title: Wholesale Distributors
section_title: National Manufacturer Associations
section_title: Manufacturers
section_title: Group Purchasing Organizations
paragraphs: 2.  Novation, LLC  3.  Premier, Inc.
section_title: Other Groups
section_title: Appendix III: Steps Federal Agencies Have Taken to Respond to Gray Market Activities
paragraphs: In the event of a drug shortage, providers who are unable to obtain drugs  from their regular wholesale distributors may resort to purchasing drugs  through distribution channels that were not authorized by the  manufacturer, referred to as the gray market. Gray market suppliers  typically obtain small quantities of a drug that is in short supply and offer it  for purchase at an inflated price. Because the origin of gray market drugs  may be unknown, there is no guarantee of the drug’s pedigree or  assurance that it was stored and transported appropriately, potentially  putting patients at risk.
This appendix describes steps federal agencies have taken in response  to activities associated with the gray market for shortage drugs. To  identify steps that federal agencies have taken, we interviewed officials  from FDA, the Department of Justice (DOJ), and the Federal Trade  Commission (FTC); reviewed federal laws and regulations, including an  Executive Order on reducing prescription drug shortages issued on  October 31, 2011; and examined agency documents.
subsections: section_title: Federal Role in Relation to the Gray Market for Shortage Drugs
paragraphs: Among other things, the October 31, 2011, drug shortages Executive  Order directed FDA to communicate to DOJ any findings by FDA that  shortages have led market participants to stockpile shortage drugs or sell  them at exorbitant prices. The Executive Order also directed DOJ to  determine whether these activities violate federal law, and if so, to take  appropriate enforcement actions.
21 U.S.C. § 355e. Counterfeit drugs, which are defined in law at 21 U.S.C. § 321(g)(2),  include, for example, those sold under a product name without proper authorization— where the drug is mislabeled in a way that suggests that it is the authentic and approved  product—as well as unauthorized generic versions of FDA-approved drugs that mimic  trademarked elements of such drugs. Diverted drugs are legitimate drugs that are illegally  bought, sold, or otherwise circulated outside of the legal distribution system that has been  established to ensure safety and quality. Diversion can involve such activities as illegal  sales of prescription drugs by physicians, patients, or pharmacists; prescription forgery; or  pharmacy theft. drugs that violate FDCA requirements. DOJ, often in consultation with  FDA, may bring civil and criminal actions for such violations.
FTC and DOJ’s Antitrust Division are responsible for enforcing federal  antitrust laws, which are designed to preserve and protect market  competition. Federal Trade Commission Act, and the Clayton Act. The Sherman Act,  enforced by DOJ, prohibits monopolization and restraints of trade, and  civil and criminal penalties may be imposed for violations of the act. The  Federal Trade Commission Act, enforced by FTC, bans unfair methods of  competition and unfair or deceptive acts or practices. For example,  collusion by drug manufacturers to set prices may violate both the  Sherman Act and the Federal Trade Commission Act. The Clayton Act,  jointly enforced by DOJ and FTC, regulates mergers and acquisitions and  prohibits those that may substantially lessen competition or create a  monopoly and are, therefore, likely to increase prices for consumers.The Federal Trade Commission Act and Clayton Act are civil statutes that  do not carry criminal penalties.
FTC only has the authority to investigate civil antitrust cases. If the case is criminal in  nature, FTC refers it to DOJ. activities. This includes, for example, the mail fraud statute, which makes  it a crime to use the U.S. mail to commit a fraud, such as facilitating the  sale of a shortage drug with a fake pedigree through the U.S. mail.
section_title: Federal Agencies Review Gray Market Complaints for Illegal Activity
paragraphs: Consistent with the October 31, 2011, Executive Order on drug  shortages, three federal agencies—FDA, DOJ, and FTC—review  information concerning possible gray market sales of shortage drugs from  a number of sources and have taken other steps to respond to relevant  directives contained in the order.agencies told us that their authorities in relation to the gray market are  limited. They explained that the selling of shortage drugs by suppliers not  authorized by the manufacturer alone, even at exorbitant prices, does not  itself violate federal law. Though gray market sales may violate  agreements between manufacturers and wholesale distributors, such  sales may not violate federal law unless they are made outside the legal  distribution system. As a result, there have been no prosecutions or  enforcement actions taken by federal agencies solely on the basis of gray  market activities.
Yet officials from all three federal  FDA has compiled gray market solicitations into quarterly reports that it  shares with DOJ as part of its response to the Executive Order’s directive  to communicate findings that shortages have led to the stockpiling or sale  of shortage drugs at exorbitant prices. From January 2012—when FDA  first began providing this information to DOJ—through October 2013,  FDA shared information on solicitations from 26 different wholesale  distributors. According to FDA officials, these solicitations typically  originate as e-mails to providers containing advertisements that list the  drugs for sale and, in some cases, the prices, which the providers then  forward to FDA. FDA officials said that some of the gray market  solicitations were for sterile injectables in shortage, including drugs  related to cancer treatment, emergency medicine, antibiotics, and  nutritive products. For example, one solicitation stated that a wholesale  distributor was offering an intravenous multi-vitamin for $785, when the  average wholesale price for that same vitamin was $8.61.
FDA officials told us that they review the solicitations to determine  whether they violate the FDCA, such as a wholesale distributor making  false claims about a drug or diverting a drug outside the legal distribution  system. FDA has opened a number of investigations in relation to the  solicitations to examine whether counterfeiting or diversion had occurred,  but did not identify any illegal activity. For example, when the anesthetic  propofol was in shortage, FDA did not object to the temporary importation  of an unapproved version of the drug, but limited distribution to the  manufacturer of the drug. However, in January 2010 FDA initiated two  investigations related to complaints that the imported drug was being  distributed by wholesale distributors, rather than the manufacturer. In both  cases, FDA could not substantiate a criminal violation, so it closed the  investigations. FDA officials told us that the FDCA does not prohibit  hoarding or stockpiling of shortage drugs or regulate drug pricing. As a  result, as of December 2013, FDA had not taken any enforcement action  related to the gray market solicitations they reviewed, but had provided  information from the solicitations to DOJ.
Officials from DOJ told us that, as required by the Executive Order, they  review FDA’s quarterly reports for information that could indicate the drug  listed was diverted for illegal purposes. For example, DOJ considers  whether there is evidence of use of fake pedigrees in violation of the  FDCA. DOJ officials noted that the solicitations listed in the quarterly  reports sometimes indicate that a drug is being sold for a higher-than- normal price; however, selling drugs at elevated prices alone is not illegal.  Such sales may be illegal, for example, if the drugs are bought and sold  through diversion from the legal distribution system. DOJ officials told us  that as of November 2013, DOJ had not launched any investigations or  taken any enforcement actions based on the solicitations listed in the  quarterly reports, because, according to DOJ officials, the reports have  not indicated that any solicitation was unlawful. According to DOJ  officials, based on information obtained separately from the quarterly  reports, the agency has launched at least one investigation into activity in  which there are indications of the illegal sales of shortage drugs through  diversion.
FTC staff told us they investigate complaints about the gray market  received from the public, as well as complaints referred to them by FDA  and Congress, to determine whether an antitrust investigation is  warranted. FTC receives complaints from the public through a toll-free  telephone number, an email address, and through the U.S. mail.staff told us that they review these complaints to determine whether there  is enough information, such as evidence that the company is engaging in  any coordinated antitrust behavior in violation of the Federal Trade  Commission Act or the Clayton Act, to warrant an investigation. According  to FTC staff, as of November 2013 they had not launched any full-phase  investigations or taken any enforcement actions related to the  pharmaceutical gray market. Though not a full-phase investigation, FTC  staff told us that in the fall of 2011 they conducted an initial investigation  to determine whether wholesale distributors or other parties were  engaged in any conduct that violated federal antitrust laws, such as  colluding to hoard drugs in shortage and then selling the drugs at higher   FTC  prices. However, they were unable to find any evidence that widespread  hoarding was occurring. Instead, they found cases where a single  wholesale distributor acting alone would buy a few vials of a shortage  drug and then sell it at a higher price—a practice that is not illegal.
In addition, in response to the Executive Order, federal agencies have  worked together in an attempt to respond to gray market activities. In  2012, FDA, DOJ, FTC, and the National Association of Attorneys General  convened three meetings to discuss the legal authorities that might apply  to the gray market and the activities that each was undertaking related to  this issue. Officials told us that in the future, they will meet on an “as  needed” basis.
FDA officials told us that the agency is considering whether additional  legal authorities to help address the pharmaceutical gray market and  secure the drug supply chain would be beneficial. Such authorities may  include registration and reporting requirements for wholesale distributors,  potential prohibitions on wholesale distributors purchasing products from  pharmacies, and pedigree and track-and-trace options. FDA officials  also noted that gray markets do not cause shortages, but are a symptom  of such shortages. To the extent that FDA and other stakeholders  address drug shortages, opportunities for gray markets to develop will  become more limited. DOJ officials told us that DOJ does not have the  authority to address drug pricing and stockpiling of drugs per se, but  noted that the agency does have the authority to prosecute suppliers  operating outside of the legal distribution system, regardless of the drug’s  shortage status or price. Officials did not take a position as to whether  additional authority over drug stockpiling and exorbitant pricing is  necessary. FTC staff told us that they do not believe additional FTC  authority in relation to the pharmaceutical gray market is necessary. They  stated that the FTC’s existing enforcement authority would be adequate  to take action in relation to the inflated pricing of a shortage drug if such  pricing was a consequence of anticompetitive conduct. If, however, the  inflated pricing resulted from factors other than anticompetitive conduct,  assessment of such issues would be outside the scope of the FTC’s  competition expertise.
section_title: Appendix IV: Summary of Recently Proposed Incentives to Alleviate or Prevent Drug Shortages
paragraphs: Some have suggested that incentivizing drug manufacturers to address  the purported causes of drug shortages could alleviate or prevent such  shortages. Proposed incentives include those related to regulatory  activities undertaken by FDA or financial incentives that the federal  government could provide to manufacturers. Some incentives target  immediate causes of drug shortages, such as by rewarding  manufacturers for a strong quality record, thereby reducing the likelihood  of quality-related supply disruptions, or by increasing redundancy in drug  supply chains. Other proposed incentives target underlying causes, such  as by increasing manufacturer revenue in order to encourage  manufacturers to remain in the market and continue investments in  production facilities.
In February 2013, FDA published a notice in the Federal Register with a request for  comment about its drug shortages task force and strategic plan. Two of FDA’s questions  related to incentives: 1c. Are there incentives that FDA can provide to encourage  manufacturers to establish and maintain high-quality manufacturing practices, to develop  redundancy in manufacturing operations, to expand capacity, and/or to create other  conditions to prevent or mitigate shortages? and 2. In our work to prevent shortages of  drugs and biological products, FDA regularly engages with other U.S. Government  Agencies. Are there incentives these Agencies can provide, separately or in partnership  with FDA, to prevent shortages? 78 Fed. Reg. 9928 (Feb. 12, 2013). manufacturer and association representatives and to FDA for comment.  We obtained comments from three leading national associations  representing drug manufacturers, both brand and generic, and five  generic sterile injectable manufacturers. For one incentive related to  exempting certain products from Medicaid rebates and 340B discounts,  we also obtained comments from relevant stakeholder groups whose  members would be affected by this exemption.
subsections: section_title: Regulatory Incentives
paragraphs: Expedited and streamlined reviews: Most of the comments submitted  by manufacturers in response to FDA’s request for comment proposed  expediting or streamlining FDA review of regulatory submissions.  Submissions that could be expedited included application supplements  related to the approval of redundant manufacturing sites or new drug  applications (NDA) or abbreviated new drug applications (ANDA) from  manufacturers with a record of quality manufacturing and an adequate  risk management plan to prevent shortages.June 30, 2013, there were more than 900 manufacturing supplements to  NDAs, more than 5,700 manufacturing and chemistry supplements to  ANDAs, and more than 2,700 ANDAs pending review. Therefore,  proponents of expediting FDA review of regulatory submissions— including applications and supplements—note that increasing the speed  of such reviews could provide an incentive to manufacturers to establish  redundant manufacturing capacity to which production could be shifted in  the event of manufacturing problems at a primary production facility,  thereby avoiding a shortage. Further, by rewarding manufacturers with a  history of quality manufacturing, expediting reviews could provide an   According to FDA, as of  incentive to ensure quality-related production problems—and ensuing  shortages—do not occur in the first place.
While representatives of the stakeholders we interviewed were generally  supportive of this potential incentive, they also identified some limitations.  One stakeholder cautioned that the resource-intensive nature of building  in redundancy means it is a long-term solution, the implementation of  which could hinder efforts to address current shortages. Another  stakeholder noted that maintaining redundant manufacturing capacity is  expensive and that expedited review alone may not provide enough of an  incentive to establish such capacity. FDA officials noted that expediting  reviews of regulatory submissions is a tool the agency already uses to  address shortages. However, FDA officials cautioned that expanding the  pool of submissions eligible for expedited review, without regard to the  risk of shortage, could slow down review of all submissions and make  expediting reviews meaningless. Representatives from one stakeholder  echoed this concern, noting that, though faster than standard review  times, in their experience there is already a backlog for review of  supplements that have been expedited to address current shortages.  Representatives from this stakeholder noted that without additional FDA  resources devoted to the review of applications and supplements, making  additional regulatory submissions eligible for expedited review would be  problematic. FDA officials also noted that, although redundancy can help  prevent a shortage if production stops, many shortages are the result of  production disruptions driven by failures in manufacturing quality systems.  Therefore, FDA officials told us that it is more important to prioritize  incentives to improve manufacturing quality systems over those that  expand capacity. To that end, as part of its drug shortages strategic plan  goal to develop long-term prevention strategies in order to prevent  shortages, FDA states that it will continue to expedite reviews to mitigate  shortages, including the review of submissions for facility upgrades to  improve quality.
Flexibility in meeting regulatory requirements: A few manufacturers  proposed that FDA could allow for flexibility in meeting regulatory  requirements for manufacturers with a strong history of compliance with  current good manufacturing practice regulations or robust risk  management plans to prevent shortages. For example, they suggest that  FDA could reduce the level of agency review for such change  notifications as manufacturing site transfers, if the manufacturer had a  history of production without quality issues. When proposing such  incentives, supporters commented that, as it could allow manufacturers to  implement manufacturing changes more quickly, reducing the level of  agency review could provide an incentive for quality production.  Incentivizing quality production could thus reduce the likelihood of a  quality-related supply disruption and shortage. One stakeholder generally  supported this approach, as long as all manufacturers were still held to  the same standards and any change in requirements was accompanied  by FDA guidance on the new approach. FDA officials told us that the  agency has issued guidance documents to help identify types of changes  after an application is approved that represent a lower risk. They added  that the agency is currently exploring new approaches to the review of  application products.
To ensure that drugs are produced in conformance with federal statutes and regulations,  including good manufacturing practice regulations, FDA may inspect the establishments  where drugs are manufactured. We previously reported that FDA inspected domestic drug  manufacturing establishments about once every 2.5 years and generally inspected foreign  manufacturing establishments much less frequently. In part, this difference in frequency of  inspection was due to the fact that, at the time, FDA was required to inspect every 2 years  those domestic establishments that manufacture drugs in the United States, but there was  no comparable requirement for inspecting foreign establishments. GAO, Drug Safety: FDA  Has Conducted More Foreign Inspections and Begun to Improve Its Information on  Foreign Establishments, but More Progress is Needed, GAO-10-961 (Washington, D.C.:  Sept. 30, 2010). respond to issues raised by the FDA investigator conducting the  inspection and in terms of production disruptions caused by the  inspection itself. As it could reduce costs and disruptions for the  manufacturer, if carefully designed so that manufacturers would still be  inspected with some frequency, increasing the interval between  inspections may provide an additional incentive for compliance with good  manufacturing practices, which could reduce the likelihood of  manufacturing quality issues and resultant shortages. One stakeholder  commented that decreasing inspection frequency could be an effective  incentive in the long term, but at present, frequent inspections set a high  bar for manufacturers in this industry. FDA officials noted that the agency  already considers compliance history as a major factor when determining  the frequency of inspection of a manufacturing site. Further, in response  to new Food and Drug Administration Safety and Innovation Act  (FDASIA) authority, the agency is in the process of establishing a risk- based inspection schedule for all establishments. FDA officials told us  that they are considering incorporating additional factors, such as process  performance metrics and shortage performance, into their selection  model.
Transparency regarding compliance status of manufacturing sites:  In documents submitted in response to FDA’s request for comment, a few  manufacturers proposed increasing the transparency of manufacturing  establishment compliance status such as by assigning site scores or an  FDA stamp of approval, which could help those engaged in drug  purchasing and drug pricing negotiations—including providers, group  purchasing organizations, insurers, and consumers—make informed  purchasing and pricing decisions. Proponents of this approach suggest  that FDA’s provision of such quality metrics could make additional  information publicly available for consideration in making purchasing and  pricing decisions, thereby giving manufacturers an additional incentive for  the highest quality production and making quality-related supply  disruptions less likely to occur.
Representatives from the stakeholders we spoke with were generally  skeptical of this approach. One noted that providers and group  purchasing organizations—which are the primary decision makers for  sterile injectable purchases, where shortages have recently been  concentrated—assume that quality is built in to any FDA-approved drug  and may not be able to readily interpret quality metrics. Representatives  from one stakeholder told us that FDA has spent extensive time and effort  educating prescribers and the public that there is one quality standard for  all FDA-approved drugs and that, from this stakeholder’s perspective,  further differentiating quality with ratings would diminish confidence in the  nation’s drug supply and lead to confusion and mistrust. Representatives  from another stakeholder expressed skepticism that the market would  respond to such information by allowing for higher prices. Likewise,  representatives from multiple stakeholders noted that information about  FDA inspections of manufacturing establishments and warning letters are  already available online and are presumably already used when making  purchasing and pricing decisions.
FDA officials confirmed that they currently provide information on the  compliance status of manufacturing sites on the agency’s website and  added that they are looking for new ways to provide transparency in this  area. They cautioned that there are significant questions and issues  regarding how to provide more transparent compliance information to the  public, such as the fact that FDA cannot disclose either confidential  commercial information or trade secret information. Nevertheless, as part  of its drug shortages strategic plan goal to develop long-term strategies in  order to prevent shortages, FDA states that it is examining the broader  use of quality metrics to assist in the evaluation of manufacturing quality.  However, the plan also notes that although FDA can make quality  information available to the public, including inspection outcomes, recalls,  and shortages, buyers ultimately decide whether they will use these data  when making purchasing decisions.
section_title: Financial Incentives
paragraphs: Guaranteed purchase: A few manufacturers proposed that the federal  government guarantee the purchase of a given volume of certain drugs.  This would allow manufacturers to ensure capacity for a given production  volume regardless of whether there is sufficient market demand.  Representatives from one stakeholder that supported this proposal told  us that such an incentive might bring more predictability to both the  volume of product made and product margins. In turn, this guarantee  could create some predictability in a manufacturer’s ability to invest in  their facilities, resulting in continued high quality and compliant  production. One stakeholder noted that such an incentive may be useful  in terms of ensuring the availability of future capacity, but at present  would not be an effective tool to address shortages as there is simply no  excess capacity available even if the government could guarantee  purchase volume. FDA officials noted that establishing such a program  would be challenging. For example, identifying a list of drugs eligible for  guaranteed purchase would be difficult, because it is hard to predict  which drugs are vulnerable to shortage in advance and the particular  drugs at risk of shortage may change rapidly.
Reduction in fees: Both recently-introduced federal legislation and some  manufacturers proposed reducing manufacturer fees to help alleviate or  prevent drug shortages. As introduced in the 112th Congress, H.R. 6611  proposed exempting certain drugs from the annual branded prescription  drug fee established by the Patient Protection and Affordable Care Act in  order to provide an incentive for brand-name drug manufacturers to enter  the market to produce a drug in short supply. Proponents of this  approach state that a reduction in the annual branded prescription drug  fee could induce brand-name companies to re-enter the market. One  stakeholder also noted that brand-name manufacturers may have more  idle capacity than generic manufacturers, so encouraging them to re- enter a market could be effective in addressing shortages.
A few manufacturers proposed a reduction in or waiver of various user  fees if the manufacturer demonstrates that they have built redundant  capacity into their manufacturing plan.reductions noted that building redundancy into a manufacturing plan is  resource intensive and that a fee reduction to help offset these costs  could incentivize manufacturers to build redundancy which could help  prevent supply disruptions. At the same time, one stakeholder that  supported this approach noted that, though user fees add up, reducing  such fees would not make a large enough economic difference to impact  a manufacturer’s decision to enter or exit a market. FDA officials first  noted that any changes to the user fee structure would have to be  negotiated with industry and then enacted by Congress. They stated that,  although the agency is open to using user fees as a way to prevent  shortages and encourage manufacturers to help address a shortage that  does arise, there are some uncertainties about doing this. For example,  definitions of redundancy are unclear and mechanisms ensuring  redundant capacity is not repurposed would need to be developed and  enforced. Finally, FDA officials also cautioned that reducing or waiving  fees for certain manufacturers could increase fees on other  manufacturers. This is because the total amount of user fees FDA  collects is fixed in statute and the annual fees assessed against individual  manufacturers are determined by dividing the fixed statutory amount by  the forecasted number of fee-paying entities. As a result, elimination of, or  a reduction in, fees for some parties would effectively transfer these costs  to the remaining fee-paying entities.
Tax incentives: In order to offset the costs of such investment, some  manufacturers proposed tax credits targeted to manufacturers that invest  in redundant manufacturing capacity. Multiple stakeholders noted that,  given the significant costs associated with new manufacturing  establishments, such an incentive would only be effective for  manufacturers that already operated such establishments.  Representatives from one stakeholder noted that the time, resources, and  approvals to create a new manufacturing site are likely to take more than  3 years with associated costs totaling tens of millions of dollars.  Therefore, tax credits are a strong incentive for companies to re-invest in  existing infrastructure, not necessarily to create new infrastructure. FDA  officials told us that modernizing existing facilities to prevent quality and  safety issues that lead to shortages can go a long way to prevent  shortages even in a system with little redundancy. They noted that such  incentives would need to encourage manufacturers to purchase new  equipment, renovate facilities, and implement new manufacturing  processes and technologies.
Changes in drug pricing or reimbursement: As introduced in the 112th  Congress, H.R. 6611 proposed changing the reimbursement rate or  pricing system for generic sterile injectable products for which there are  three or fewer active manufacturers. Such changes are intended to  prevent shortages by providing an incentive to manufacturers to continue  production in a concentrated market. Specifically, the bill proposed  changing the calculation of the Medicare reimbursement rate for generic  sterile injectable products for which there are three or fewer active  manufacturers from average sales price plus 6 percent to wholesale  acquisition cost. It would also exempt such products from Medicaid  rebates and 340B discounts.
The premise of the Medicare reimbursement change proposal is that  basing reimbursement on wholesale acquisition cost will enable  manufacturers to adjust their prices to meet supply and demand, which  some claim the current reimbursement structure prevents.manufacturers to more readily adjust their prices and achieve a profit, this  proposal aims to provide an incentive for manufacturers to remain in the  market, thereby preventing further erosion of manufacturing capacity,  which could make the generic sterile injectable market even more  vulnerable to shortages. Proponents note that this incentive could  positively affect manufacturer profit and influence a manufacturer’s  decision about participating in the market for a particular drug. One  stakeholder cautioned that, in their opinion, using reimbursement as an  incentive increases the risk of fraud and abuse.
The premise of the Medicaid rebate and 340B discount exemptions  proposal is that such rebates exert additional downward pressure on  already extremely low prices, thereby limiting manufacturers’ ability to  sustain production and upgrade facilities. Removing such rebates and  discounts would provide additional revenue to manufacturers, thereby  potentially providing them an incentive to remain in the market and  maintain manufacturing capacity or to re-enter the market. Proponents  state that this incentive may help influence manufacturer margins, thereby  providing revenue to invest in production capacity to ensure demand is  met. However, some stakeholders caution that these exemptions would  increase costs to patients and the government (including increasing drug  costs and administrative costs to the government for tracking such an  exemption). Representatives from one stakeholder group we interviewed  noted that, according to its inquiries, the majority of generic sterile  injectable drugs are manufactured by three or fewer manufacturers, in  which case nearly all such drugs would be subject to this exemption,  whether the drug had ever been in shortage or not. Further, stakeholders  noted that generic sterile injectable drugs are often administered in  hospital inpatient departments and are therefore not subject to Medicaid  rebates, which only apply to outpatient drugs. One stakeholder stated that  for the few drugs in this group that are subject to Medicaid rebates, the  cost of these drugs is already low, which would result in a minimal  financial impact of such an exemption. Finally, one stakeholder stated  that 340B discount exemptions would have a minimal influence on drug  shortages.
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; Leia Dickerson;   Sandra George; Alison Goetsch; Cathleen Hamann; Rebecca  Hendrickson; Eagan Kemp; Sarah-Lynn McGrath; Yesook Merrill;   and Leslie Powell made key contributions to this report.
section_title: Related GAO Products
paragraphs: Drug Compounding: Clear Authority and More Reliable Data Needed to  Strengthen FDA Oversight. GAO-13-702. Washington, D.C.: July 31,  2013.
High-Risk Series: An Update. GAO-13-283. Washington, D.C.:   February 2013.
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.
Drug Safety: FDA Faces Challenges Overseeing the Foreign Drug  Manufacturing Supply Chain. GAO-11-936T. Washington, D.C.:  September 14, 2011.
Food and Drug Administration: Response to Heparin Contamination  Helped Protect Public Health; Controls That Were Needed for Working  With External Entities Were Recently Added. GAO-11-95. Washington,  D.C.: October 29, 2010.
Food and Drug Administration: Opportunities Exist to Better Address  Management Challenges. GAO-10-279. Washington, D.C.: February 19,  2010.
Food and Drug Administration: FDA Faces Challenges Meeting Its  Growing Medical Product Responsibilities and Should Develop Complete  Estimates of Its Resource Needs. GAO-09-581. Washington, D.C.:   June 19, 2009.
Human Capital: Key Principles for Effective Strategic Workforce Planning.  GAO-04-39. Washington, D.C.: December 11, 2003.
Standards for Internal Control in the Federal Government.   GAO/AIMD-00-21.3.1 Washington, D.C.: November 1999.