Potential Pathway to Alleviate Drug Shortages and Higher Prices

In the recent years we have seen increasing drug shortages and higher prices ⁽¹⁾. There has to be a solution. Recent personal conversations ^(2,3) about the issue reinforced my thinking about a potential solution that I would like to share in this post. It could be a start of a conversation and we collectively could develop mechanisms that could control persistent drug shortages and higher prices. Many different solutions ^(4,5), too many to reference, have been suggested but they are accessible through search.

Modified elements of Orange Book ⁽⁶⁾ and Food and Drug Administration Safety and Innovation Act [FDASIA] ⁽⁷⁾ can be used to reduce drug shortages and lower high prices.  

Orange Book lists companies producing each drug. Once a company associated with a drug is included in the Orange Book, the drug becomes evergreen for the company. Under FDASIA ⁽⁸⁾ company is obligated to inform the regulatory body of its intent to discontinue or have an interruption in the supply of a drug.  

Companies have six months ⁽⁷⁾ to inform regulatory bodies about discontinuations and interruptions. In the case of interruptions six months might not be sufficient time to assure supply from alternate suppliers and shortages can happen. Interruption to me point to supply chain issues. They are correctable if companies make an effort to assure proper raw material and equipment availability for the drug. If diligent effort is not made to assure raw materials and equipment availability delays will continue. Under such circumstances regulatory bodies, healthcare systems and patients have no recourse but make do with whatever they can. Such situations can result in loss of life. They also become an opportunity for the price gougers who can produce the needed drug.

One potential solution could be to have companies submit to the regulatory bodies their expected production plan for the life saving drugs. Companies are not going to like this but it would cajole companies to improve their operations. Mutual cooperation would be beneficial for all. Life saving drug definition could be a contentious issue.

If companies cannot correct the supply chain issues there is another consideration and that would be “company looses its evergreen production and marketing status for the drug in question after an agreed time e.g. 6 or 12 months after the first incidence”. Companies would have to make an effort to prevent loss of their drug evergreen status. Delisting of companies would be published.

In addition, if the company loosing its evergreen right wants to regain its production and marketing privileges, they would have to re-apply for regulatory approval. This will force companies to manage their operations efficiently. My thinking is that companies would have to make an effort to retain their evergreen right for a drug.

Companies looking for opportunities could use the interruption, short supply and discontinuation list to enter the market. Such list would also provide existing suppliers an opportunity to increase their production volume through use of better manufacturing technologies and increase their patient base and profits.

Companies are not going to like “delisting of their evergreen status”. I can conjecture opposition to the proposal but the regulatory bodies need to take an aggressive action for the issue (shortages and blatant price increases) at hand. Unless forceful benefit/loss become part of the FDASIA, my concern is that shortages and price hikes would continue. If we want to make a reduce incidents of drug shortages and astronomical price increases, we need to be bold.   

Girish Malhotra, PE

EPCOT International

1.  Generic Drug Price Gouging Has Physicians Raising Red Flags, http://www.science20.com/news_articles/generic_drug_price_gouging_has_physicians_raising_red_flags-164875 accessed April 10, 2016
2. Dr.  Janet Woodcock, M.D., Director, Center for Drug Evaluation and Research, US Food and Drug Administration, April 10, 2016
3. Dr. Albinus D’Sa, Special Assistant to the Office of Process and Facilities, Center for Drug Evaluation and Research, US Food and Drug Administration, April 11, 2016
4. The FDA can single-handedly reduce drug price-gouging. Why is it waiting? http://www.latimes.com/business/hiltzik/la-fi-mh-the-fda-can-single-handedly-stop-20160105-column.html accessed April 10, 201
5. Greene, Jeremy A, MD, PhD, Role of the FDA in Affordability of Off-Patent Pharmaceuticals, JAMA, pg. 461-462, February 2, 2016 
6. Orange Book 2016, accessed April 9, 2016
7. Food and Drug Administration Safety and Innovation Act, accessed April 9, 2016
8. Food and Drug Administration Safety and Innovation Act, Title X-Drug Shortages pg 107-109 accessed April 11, 2016