Even if we’re unwilling to fix the high costs of many drugs we have to deal with the other problem plaguing the pharmaceutical industry: shortages of needed drugs—especially sterile injectables. it’s been happening for close to a decade and it’s a serious problem.
Doctors who can’t get the therapies they normally use are winging it–using alternative medications.
There’s a grey market. Nobody wants to run out of needed medications or infusions, and some facilities have paid a premium and stockpiled them. That’s illegal you say. Tell that to the person with a serious infection who needs the right antibiotic now.
There were 257 new drug shortages in 2011; then the number started going down. And there have been 250 ongoing shortages annually between 2012 and 2015. Most were for generic sterile injectable drugs.
“89 % of the drugs we in the U.S. take are generic.” Some are made in the U.S. but many are made abroad. “The U.S.’s top 5 sources of pharmaceutical imports by “value” (in 2015) were Ireland, Germany, the U.K., Switzerland and India.” –Indian companies produce large volumes of cheap generics whose U.S. patent protection has expired. “They now make up eight of 10 prescriptions filled in the U.S.” These medications are relatively inexpensive and only “account for 22 percent of spending, hence they are low on the value list. China doesn’t sell many “finished drugs” here but they produce 40% of the global chemical components used for our medications. https://www.bloomberg.com/news/articles/2017-01-17/where-the-u-s-actually-gets-its-drug-supply-quicktake-q-a
More than 50% of our generic drugs are supplied by one or two manufacturers. Some medications have “Thin profit margins…and that can lead to shortages, manufacturing delays, or decisions to discontinue a drug altogether.”
In the US, a year-long a shortage of benzathine penicillin G has made treating syphilis – a disease that is growing in prevalence – more difficult. In Brazil, a three-year shortage of the drug occurred when they were having an outbreak of syphilis, a disease linked to severe malformation in babies.May 21, 2017
The 2017 Hurricane in Puerto Rico, where mini bags for IV solutions are manufactured, led to temporary shortages.
In 2011 Bruce Chapner, an investigator at the national cancer institute, wrote about the scarce supply of “workhorse cancer drugs”, various antibiotics, blood pressure meds, and electrolyte solutions. Worldwide demand was increasing.
A number of the legal and bureaucratic hurdles were preventing large manufacturers from entering the market and keeping some of the drugs made elsewhere out. The production of sterile injectables was also hampered by the FDA’s buy and bill rule. “Reimbursement for injectable generics can’t be more that 6% higher than the average sales price the preceding quarter.” So injectables were less profitable and, manufacturers made them “using older and less efficient production facilities.” Contamination led to plant closures. Cancer drugs made in the U.S. (he hypothesized) can be sold abroad for more money. He didn’t say it’s happening, just that it makes sense. http://www.nejm.org/doi/full/10.1056/NEJMp1112633#t=article
Companies told investigators for the pew trust that “they needed incentives, either in the form of guaranteed-volume contracts or the ability to retain contracts, to mitigate the risks of making investments.” They needed predictability. “Without accurate information about the expected demand for a product, especially low-volume, low-margin creations, companies were reluctant to invest in setting up additional manufacturing capabilities to protect against future shortages.” http://www.pewtrusts.org/en/research-and-analysis/reports/2017/01/drug-shortages
In 2017, the top 3 generic manufacturers were Teva, an Israel based company with $9 billion in sales, and factories all over the globe. Sandoz—a Swiss company that is the generics division of Novartis: It has over $8.5 billion in sales, 25,000 employees worldwide, and 30 manufacturing sites. And Actavis, a $70 billion company that is headquartered in Dublin Ireland and has 10,000 employees. https://www.thebalance.com/top-generic-drug-companies-2663110
Trump promised to lower prescription drug prices. His proposals seem to be mainly aimed at generics, even though,(according to the 2016 Government Accounting Office analysis) over a five year span—2010 to 2015– the price of “1441 established generic drugs “dropped about 10 percent and the price of “2,378 unique generic drugs” decreased 59 percent. The report identified 351 established drugs that “experienced an extraordinary price increase”— 100 to 2000% . (Some of the hikes were probably caused by higher manufacturing costs; and some were the result of a market system that allows companies to gain control of a medication and see what they can get away with. The role of shortages was not discussed.) https://www.gao.gov/assets/680/679022.pdf
Amidst the public outcry for lower drug prices, shortages could, at least theoretically, be affected by business difficulties. In December 2017 Teva laid off 14,000 workers and closed a few manufacturing facilities. Profit margins were falling and they were under pressure in the U.S. from “major chains, wholesalers and benefit managers who had gotten together and demanded discounts.” To survive and be profitable they planned to discontinue some drugs and close or sell “a significant number of manufacturing plants in the United States, Europe, Israel and other markets.” https://www.nytimes.com/2017/12/14/business/dealbook/teva-pharmaceuticals-generic.html
The suppliers of generic drugs and their facilities are scattered and can’t be regulated. In 2015, acting on Obama’s executive order, the FDA published a number of rules to help alleviate the shortage problem.
Before companies stop making any or enough of a needed drug, (within the limits of the law) they have to notify the agency. The government can then “determine if other manufacturers are willing and able to increase production”..The FDA “was told to expedite inspections and reviews of submissions from manufacturers attempting to restore production—and manufacturers who were interested in starting new production.
And the FDA was told to bend a few rules: “Exercise temporary regulatory flexibility for new sources of medically necessary drugs; help affected manufacturers identify the cause of the shortage; and develop risk mitigation measures, such as the use of sterile filters, to allow individual batches of a drug product initially not meeting established standards to be released.
As an example of the complexity and how it’s handled:
In 2017 “Due to the ongoing critical shortage of injectable drugs used in critical care” the FDA reviewed Pfizer’s stability data and extended the expiration date of a number of injectables.
According to the FDA approximately 20 million IV saline bags are used per month in the United States. IV fluids are used to hydrate, as a vehicle for infusing medication, and much more. In the U.S. they are largely supplied by: Baxter, a U.S. company, B.Braun Medical–The American branch of a German company that has operations in 64 countries–, and Hospira (a Pfizer owned company). the U.S. manufacturer, Baxter, has “15 manufacturing sites in the continental U.S., three in Puerto Rico, and eleven in Latin America and Canada.” The supply of sterile solutions in the U.S. has been borderline for years. In 2017 there was a shortage, and the FDA acted. The agency can’t require a manufacturer to make more. But in March they “checked out Fresenius Kabi’s Norway, saline producing facility. It passed inspection and the agency “temporarily allowed Fresenius Kabi to distribute normal saline in the U.S.” In April 2017 the FDA allowed Baxter to temporarily import normal saline produced in Spain. http://www.jhconline.com/iv-shortage-tests-providers-and-suppliers.html
Currently the FDA says it has 4 “officers” and others working on the problem. They updated the ASHP—the American Society of Health System Pharmacists during a round table discussion in November 2017. At the time the FDA was dealing with 170 newly reported shortages (down from 305 in 2012). The typical drug remained the injectable product that was off patent and had few suppliers; shortages were still commonly the result of “quality problems during the manufacturing process.”
Most companies were notifying the FDA as required by law, and the FDA was encouraging, talking, strategizing—and increasingly relying on foreign inspection histories. But the FDA was still toothless. They couldn’t require manufacturers to do anything.
The conference ended with a number of recommendations (? To Congress; ? to the FDA’s rule makers) They included “requiring” manufactures who faced impending shortages to establish contingency plans; and creating “incentives” that would encourage drug makers to produce scarce products. Then, noting that the numbers of generic manufactures were declining, the Pharmacists wanted the FTC– federal trade commission to “review drug company mergers and acquisitions.”
what can we expect in the future? 17 % of the 7.5 billion people on the planet live in India and 20 percent of them survive on, at most, $1.25 a day. India’s large pharmaceutical industry (and their courts) seems to be more interested in serving the medical needs of locals than they are in enriching the coffers of big Pharma. Drugs are relatively cheap and most are generic.
Newly created medications, some of which are major advances, are largely unavailable in their corner of the world during their first 5-7 years. —After India joined the world trade organization in 2005, their government started allowing Pharma to patent drugs. But their courts approach to the law is a bit different than ours. As in the western world to be patentable an item must be new, useful, and non-obvious. The U.S. courts allow companies to patent new versions of drugs (long acting, capsule versus pill, different inactive ingredients.) The courts in India tend to say changes of this type are not “new” thus not patentable. They have also ruled that the recently developed drugs that cure hepatitis “are novel but similar to a known compound (sort of true) and that the new drugs didn’t show a significant improvement in efficacy. (wrong.) Nonetheless when the U.S. patents expire, manufacturers in India tend to get to work.
18 % of the world’s inhabitants live in China. Their pharmaceutical manufacturing sectors are also big and growing. No telling how the U.S. will solve it’s drug shortage problem in the decades to come.