Remedy of US’s Drug Supply Chain Shortages and Domestic Production of Generic and Brand Drugs

USA is the largest consumer of Brand and Generic drugs. Discussion here is centered around generics as they are the largest volume (84%) ⁽¹⁾ to serve the needs of US population but is very applicable to brand drugs also. Most of the US drugs are imported. Threat of US not having sufficient supply of these drugs has been there and is real. It has been talked about and discussed for quite some time. Conversations and congressional hearings ⁽²⁾ have been held. Projects ^{(3, 4, 5)} have been initiated by HHS (BARDA) and others to alleviate problem/s have no meaningful results and the problems still prevail. From my perspective all these attempts have been a charade. There is nothing meaningful on the horizon. With potential of tariffs on drugs, US needs to wake up and remedy the situation before it is too late. 

                                                               

National Academy of Sciences ⁽⁶⁾ in its most meaningless report even suggested that US should build foreign alliances to curb shortages ⁽⁷⁾. For national security reasons these recommendations ⁽⁶⁾ should have been questioned. Different US presidents have issued executive orders as far back as 2011 ^{(8, 9)} and nothing meaningful has resulted to reduce shortages or attain self-sufficiency. To bring pharma manufacturing home revamp of pharma’s business model, discussed later, along with US’s creativity and imagination is needed. This is critical. Since the industry is profitable need to change has never been a consideration. 

 

Why US has not made any progress in brining pharma manufacturing home when it can send man to the moon and bring him back. Pharma, my conjecture, has not addressed issue and/or may be does not understand the real root cause of the problem even after repeated discussions and attempts. Perspective presented is my own and is not influenced by any for profit and/or not for profit organization.  

 

Pharma companies are stuck in the current business mode (Figures 1 & 2) since middle of the last century. This is due to what I label as “equipment centricity ⁽¹⁰⁾” (Figure 1) rather than “process centricity ⁽¹¹⁾”. Since pharma has been profitable it considers itself invincible and no need to change its operating and business model has been on their radar. Figure 2 is the result of Figure1. 

Pharma’s “equipment centricity ⁽¹⁰⁾” i.e. fitting different chemistries in the same equipment has forced companies to follow stringent drug safety regulations and prescribed cGMP regimen. Downside has been low asset utilization ⁽¹²⁾. All the related costs become part of the product cost. It also has the highest hydrocarbon emissions per kilo of product ⁽¹³⁾. All of the related costs are passed on to the patients. Since the customer pays for the added costs, need for “process centricity ^{(11 )}” has not been a consideration.

With the prospect of tariffs on pharmaceuticals unless immediate steps are taken US population could suffer immensely. If US is really serious about bringing generic and brand drug manufacturing home, it has to emulate an effort like going to moon and/or create a consortium that has no outside political and regulatory meddling. Alternate business and operating model, not a rocket science, has to be adopted. Pharma manufacturing has to move from “equipment centricity ⁽¹⁰⁾” to “process centricity ⁽¹¹⁾”. If it does not this discussion will continue. 

 

Why Equipment Centricity:  

 

Why has the pharmaceutical industry dwelled on and is content with “equipment centricity”? The answer is simple. Since inception ^{(14, 15, 16)} manufacture of active pharmaceutical ingredients (API) and their formulations can be accomplished by modifying the processes to fit in the available existing equipment. This minimized new capital investment. With this pathway it accepts rigorous drug safety regulations and less than optimum use of processing equipment ⁽¹²⁾. “Equipment centricity ⁽¹⁰⁾” related costs are born by the patients.  

 

Process Centricity ⁽¹¹⁾:

 

This is not a new concept for the chemists and chemical engineers. It is pure and simple application of fundamentals of chemistry, chemical reaction engineering, processing and economics taught in our business, science and engineering curriculums ^{(14, 15, 16)} to create an excellent process. It is widely used in the fine/specialty chemical industry, older cousin of pharma. It is ironic that every reaction chemistry tells us how the “process centricity ^{(11 )}” works and how it can be exploited. Even then pharma lives in its old tradition of fitting a square plug in a round hole “equipment centricity ⁽¹⁰⁾” (Figure 1). 

 

By overlooking “process centricity ⁽¹¹⁾” especially in active pharmaceutical ingredient (API), pharma is not involving the “village” ^{(14, 15, 16)}from product inception. As a result it misses out on applying nuances of mutual and social behavior of chemicals, Sociochemicology ^{(14, 15, 16, 17)}, to create excellent processes. Some might consider this combination to be difficult. It is not. We are taught everything we need to know but have not fully capitalized on their value. We have the knowledge, creativity and imagination to accomplish the impossible. 

 

Path Forward:

 

If US wants to bring pharma manufacturing home, companies will have to internalize move from “equipment centricity” ⁽¹⁰⁾ to “process centricity” ⁽¹¹⁾. My estimate at least 180 days working 24/7 hours might be needed for each product provided it has the needed processing equipment, infrastructure, available raw materials, approved site and process. It is very possible that US might not have properly trained manpower for such task. 

 

In order for US to bring pharma manufacturing every “t” will have to be crossed and every “i’ will have be dotted. Brand and/or generics cannot be manufactured tomorrow in any available equipment . It will take time as the process and the facilities have to be approved. Processes to manufacture products just cannot be fitted in any available equipment. On top of it US does not have much of any raw materials needed for the drugs. Processing methods, equipment centric or process centric, have to be tested. Drug efficacy has to be tested. All of the above issues have to be dealt with and addressed. 

 

Companies interested in reducing/alleviating drug shortages and bringing pharma manufacturing to USA should be carrying the baton from product identification, process development, their commercialization and distribution. They have to transition from “equipment centricity” ⁽¹⁰⁾ to “process centricity” ⁽¹¹⁾ based model for the API and their formulations. Village ^{(14, 15, 16)} would have to be involved. This can happen by as stated earlier by capitalizing on mutual social behavior of chemicals ^{(14, 15, 16, 17)}, proper unit operations ⁽¹⁸⁾ and incorporating “process centricity” ⁽¹¹⁾. It will be able to accommodate variable volumes to meet patient needs in a properly designed plant. 

 

Simply said pharma’s marriage and addiction to “equipment centricity” ⁽¹⁰⁾ has been insurmountable and inseparable as significantly less effort is needed to commercialize a product. Had the chemical/pharmaceutical industry been “process centric” ⁽¹¹⁾ things would have been different. It would have had the agility to produce many different products with minimal investment. It is possible that the industry would not have gone “offshore” as USA would have led the manufacturing technology knowledge curve.   

 

CDMOs (contract development and manufacturing organization) and equipment suppliers will resist the suggested shift to “process centricity” ⁽¹¹⁾ based manufacturing. For their success they will have to support “process centricity ⁽¹¹⁾. Since CDMOs rely on “equipment centricity” ⁽¹⁰⁾ there should not be any surprise if US based CDMOs move overseas. It is time for pharma to consider alternate business model if it wants to bring pharma manufacturing to the largest market, USA. 

 

FDA will have to reconfigure itself and its approval processes for NDA (new drug application) and ANDA (abbreviated new drug application) by reducing their approval times to 90 days ⁽¹⁹⁾. Environmental and other regulatory approval times will have to be reworked. Every “K Street” ⁽²⁰⁾ residents would be an influencer. Legislators will have to participate in bringing manufacturing home by creating a FOUR STATE model and rejuvenating “Puerto Rico” ^(21,22) type model. It will be an added opportunity to bring jobs home. 

 

Companies (pharma and Pharmacy Benefit Managers (PBMs) will have to guarantee product quality and would have to accept sever penalties for any and every deviation ⁽¹⁹⁾. Companies will have to have total complete knowledge and command of the production and distribution process. Since every NDA and ANDA drug is FDA approved drug tiers ⁽²³⁾ have to go. They artificially raise prices. Direct sales to patients have to be allowed. Price, quality and drug efficacy based competition is the best way to reduce shortages. 

 

Unlike the past efforts that have resulted in nothing a collective thought through effort needs to be made. There will be resistance from every vested interest. 

 

Recent announcements by Eli Lilly ⁽²⁴⁾ $27 Billion, Johnson & Johnson ⁽²⁵⁾ $55 billion, Novo Novartis ⁽²⁶⁾ $23 billion are “equipment centric” ⁽¹⁰⁾ projects for their brand products. These are not going to be commercial at least for the next 4-5 years and will not produce products to fill tariff related immediate needs. Once patents for their drugs expire these investments could become the “white elephants” of no value looking for home.   

  

Simply said pharma’s marriage and addiction to “equipment centricity” ⁽¹⁰⁾ that has been inseparable and insurmountable needs to change. My conjecture is that “process centricity” ⁽¹¹⁾ effort will be a  “win-win” situation for the companies and a BIG win for the patients. Task is going to be challenging. US has never shrugged from any challenge. Let us be brave and get going.  

 

Girish Malhotra, PE

EPCOT International 

 

References:

1.     U.S. Pharmaceutical Statistics

2.     Woodcock, Dr. Janet: SECURING THE U.S. DRUG SUPPLY CHAIN: OVERSIGHT OF FDA’S FOREIGN INSPECTION PROGRAM December 10, 2019 

3.     Phlow Corporation Pharmaceutical Technology July 16, 2020

4.     DOD Awards $69.3 Million Contract to CONTINUUS Pharmaceuticals to Develop US-based Continuous Manufacturing Capability for Critical Medicines   January 15, 2021

5.     API Innovation Center  

6.     BUILDING RESILIENCE into the Nation’s MEDICAL PRODUCT SUPPLY CHAINS National Academies of Sciences, Engineering, and Medicine, 2022

7.     Malhotra, Girish: Has US lost its Business Acumen, Creativity and Imagination for its Healthcare Needs? Profitability through Simplicity, June 6, 2022

8.     EO 13588 Reducing Prescription Drug Shortages October 31, 2011

9.     EO 13944 Combating Public Health Emergencies and Strengthening National Security by Ensuring Essential Medicines August 6, 2020

10.   Equipment centric https://images.app.goo.gl/Qi2UZKqu4qHdLWvu6

11.   Malhotra, Girish: Process Centricity is the Key to Quality by Design, Profitability through Simplicity April 6, 2010

12.   Schrader, Ulf: McKinsey & Co. Operations can launch blockbuster in pharma, February 16, 2021

13.   Sheldon R.A. The E factor 25 years on: the rise of green chemistry and sustainability, Green Chemistry

14.   Malhotra, Girish: Active Pharmaceutical Ingredient Manufacturing: Nondestructive Creation De Gruyter May 2022 

15.   Malhotra, Girish: Chemical Process Simplification: Improving Productivity and Sustainability John Wiley & Sons, February 2011

16.   Malhotra, Girish: Chapter 4  “Simplified Process Development and Commercialization” in “ Quality by Design-Putting Theory into Practice” co-published by Parenteral Drug Association and DHI Publishing© February 2011

17.   Malhotra, Girish: Sociochemicology, May 30, 2013

McCabe W. L & Smith J. M. Unit Operations of Chemical Engineering McGraw-Hill Book Company Second Edition 1967

19.   Malhotra, Girish: ONE PAGE Road Map to Reduce Drug Shortages, Assure Quality and Improve Affordability, Profitability through Simplicity, December 6, 2019 

20.   K Street

21.   Malhotra, Girish: US’s Self Sufficiency for Generic Drugs: A Supply Dilemma and Potential Solutions, Profitability through Simplicity, March 31, 2022 

22.   MacEwan, Arthur: The Effect of 936 May 2016  

23.   Understanding Drug Tiers Accessed October 22, 2023 

24.   Eli Lilly  April 14, 2025 

25.   Johnson and Johnson April 14, 2025

26.    Novartis April 14, 2025

 

Health and National Security Issues for the USA and Is The United States of America Prepared

Lack of vaccine and proven treatment for COVID-19 has had the world scrambling to find treatments. Every pharma company is looking for ways to control the disease. Hydroxychloroquine and other drugs have been suggested and used. They might work on individuals but its efficacy is anecdotal. US had difficulty in acquiring sufficient dosages from overseas. FDA had to let that company it had banned to export to US ship to US. US and Indian governments at its highest levels had get involved. This brings up a point of discussion of having capabilities to acquire or produce critical drugs. There is no financial interest with any entity.

Answer to this question for the developed countries is flat NO. 

Most of the generic drugs which are better than 80% of the total US prescription market are imported from China and India ⁽¹⁾. If the drugs stop coming from these countries, US will have no capability to serve its populations pharma needs ⁽²⁾. 

I am sure US legislators are cognizant of these facts and considering alternate options. Ultimate remedy has to bring pharma manufacturing home. However, there are three bottlenecks. They are:

1. US FDA
2. Pharma lobbies
3. Pharmacy Benefit Managers (PBM)

There is no point in discussing what these have done as everyone is aware of there doings. They can implement plans to remedy the situation and bring pharma manufacturing home. 

Pharma and PBM lobbies have to be contained. In addition US FDA has to fix its broken ANDA approval system and create an environment and incentive to bring manufacturing home. Some of these plans are laid out in eth linked blogs. 

1.     What Is Needed for a Regulatory Approval of NDA/ANDA Filings in 90 Days? http://bit.ly/31ALUcu

2.     Impact of Regulations, Manufacturing and Pharmaceutical Supply Chain (PBMs) on Drug Shortages and Affordability Part 2 https://bit.ly/2TYQeOQ

3.     Drug Shortages, Quality and Prices: Who is Responsible? http://bit.ly/2oVgmAD

4.     ONE PAGE Road Map to Reduce Drug Shortages, Assure Quality and Improve Affordability http://bit.ly/34RYypH  

5.     Strategies to Increase Generic Drug Competition and Bring Manufacturing to The United States of America http://bit.ly/3d0gjaO

6.     How Would US FDA Behave/React if They Were on the Receiving End? https://bit.ly/3bwGiVW

7.     Long Term Drug Quality Supplies for US, FDA and A New Reality https://bit.ly/3aKaxZw

Above are ideas that can be used to fine-tuned to create and implement viable plans.  

Girish Malhotra, PE

EPCOT International

1. https://www.statista.com/statistics/205042/proportion-of-brand-to-generic-prescriptions-dispensed/ Accessed May 8, 2020
2. Gibson, Rosemary, China Rx: Exposing the Risks of America’s Dependence on China for Medicine, https://www.uscc.gov/sites/default/files/RosemaryGibsonTestimonyUSCCJuly152019.pdf, accessed May 8, 2020

Long Term Drug Quality Supplies for US, FDA and A New Reality

In the United States, we have come to rely on FDA to make sure that the drugs that are dispensed through pharmacies and mail order are quality drugs. However, COVID-19 has changed the immediate landscape for a while or may be forever. 

A new reality has to be accepted. We need to learn from it and plan for the long term. If we don’t, my apprehension is consequences could be grave. There in financial affiliation with any for/non profit organization. 

Since 1962 US FDA has made regulatory improvements/enhancements in assuring drug quality consistency to the US population. Generic drugs have become part of our lives. Countries have accepted US FDA standards as the gold standard. With time generic drug manufacturing has moved off-shore. FDA has made plant inspections ⁽¹⁾ part of routine NDA/ANDA approval process. Deviations from cGMP, record keeping and sanitation etc. result in 483 citation/s ⁽²⁾. However, repeats do not seem to be stern enough reprimands. They might have made companies bold, my conjecture, by taking liberties with their practices. Closure of total sites has been rare and a last resort. 

In the last SIX weeks, Charles Darwin’s “Theory of Evolution”, which occurred over millions of years has been replaced by “Reality of COVID-19 Revolution”. Globally things have changed and we are adjusting to the new reality. If we do not embrace and work with the new reality to address needs of tomorrow , people will die and we could have consequences that will be far different from what has happened to date.  

My conjecture is FDA should change certain aspects of its NDA/ANDA approval processes if it wants US population to have continued supply of quality drugs. There is an opportunity ⁽³⁾. If we don’t hold manufacturing companies are not held accountable ⁽⁴⁾, we could have prolonged ill effects due to less than quality drugs and non-availability. Their impact could be far greater than the current crisis. 

My recommendation for the US FDA is to consider an alternate proposal that was been suggested earlier ^{(3, 4)}. I am sure there are other viable proposals. My proposal can be implemented just by stork of pen and I don’t think companies, legislators or lobbyists are going to raise raucous about it as it will save lives in the short and long term. Stipulation would be that instead of having to inspect generic drug producing plants, US FDA will accept CEO/MD signature as guarantee and confirmation that the product/s being produced will meet FDA’s quality requirements and company will comply with what has been submitted in its NDA/ANDA approval application. Signature also means that if company’s product through surveillance testing do not comply with what the company says it will produce, US FDA can simply tell the company that they cannot ship their products to the United States of America for the next FOUR years. 

Consequence of above will be multifold. Companies will be spared the wrath, agony and expense of FDA inspections. They will be proactive to assure quality and use to best technologies which will force competition. FDA personnel will not have to bear the wrath of travel to remote places. They will devote more time to approve NDA/ANDA applications and will be able to create templates to simplify NDA/ANDA approval processes ⁽³⁾. 

It is understandable that with the current COVID-19 crisis, attention is focused on the immediate problem. It needs to be. However, we need to think and address how US will address continued supply of quality drugs ⁽⁴⁾ for now and future. The current crisis should be a­ lesson. If we don’t US could be holding an empty bag later part of this year or come the next crisis. 

Girish Malhotra, PE

President

EPCOT International 

1.     Inspection citations. https://www.fda.gov/inspections-compliance-enforcement-and-criminal-investigations/inspection-references/inspection-citation, Accessed April 3, 2020

2.     Malhotra, Girish: Are US FDA 483 Citations a "Medal of Honor" or “Rite of Passage” to Disgrace for the Pharma companies? Profitability through Simplicity, October 16, 2019

3.     Malhotra, Girish: Strategies to Increase Generic Drug Competition and Bring Manufacturing to The United States of America, Profitability through Simplicity, March 16, 2020

4.     Malhotra, Girish: ONE PAGE Road Map to Reduce Drug Shortages, Assure Quality and Improve Affordability, Profitability through Simplicity, December 6, 2010

Strategies to Increase Generic Drug Competition and Bring Manufacturing to The United States of America

US FDA recently finalized “Guidance for Industry on Applications for Drugs with Inadequate Generic Competition” ⁽¹⁾. and it tells us it is the same play with different buntings. This guidance/process is totally inadequate as it is mired in FDA’s current lethargic and controlling practices. It renames the existing ANDA approval process and suggests it will create competition. However, except for minor tweaks and window dressing it is no different from what has been and is the practice.

FDA has a unique opportunity to create a legacy, bring manufacturing jobs home and address national security issue dues to potential drug shortages. It can also at the same time let the companies innovate manufacturing technologies, lower manufacturing costs, improve profits and improve affordability. Unless a process of “nondestructive creation” outlined below is adopted and implemented, the new proposal is a useless exercise of no value. In the outlined proposal there will be challenges but compared to sending man to the moon, the process would be a cake walk. There is no financial relationship with any entity. 

Following proposal/road map will not only create generic competition but also assure continued strategic drug supplies to the residents of United States. Under this scenario FDA has to grant or deny ANDA applications in 90 DAYS from the date of filing if they are properly filled and submitted ^(2,3). For this to come to fruition FDA has to create ANDA a simple filing process and environment. FDA would use the current fee structures for ANDA application filings and approvals. 

For 90 day approvals to happen FDA has to tell the industry the exact information it needs so that the ANDA can be granted or denied in the allocated time. Application will be equivalent “process operating instructions” given to any applicant filing ANDA and if followed as designed, will result perfect application (quality product) that will be approved 90 days or less. With any filing applicant guarantees that is will produce quality products.

Such filing process will be equivalent to FDA writing operating instructions that any operator (company) can follow to create a perfect product (ANDA application). I equate this exercise to be QUALITY BY DESIGN operating instructions. If any applicant company decides to produce the API or formulate in the United States 

US Government should give companies preferential ANDA approval time of 30 days vs. the proposed 90 days which includes inspection if they manufacture drugs in the United States. US has used such preferential treatments in the past ⁽⁴⁾.  

Regulators and companies cannot have any meetings prior to filings to address/answer any questions. Once the application is filed no new additional information except for minor clarifications can be asked by the regulators. 

Companies participating in this process have make sure that they will produce the quality product that has been approved by US FDA and follow FDA cGMP requirements on continued basis. If on random testing or inspection their products in US market does not meet quality specifications which they had committed to in their granted application, NO 483s will be issued and their production shut down for the next TWO years.

FDA’s filing instructions (operating instructions) that would be detailed but general enough to apply to every API and formulations application ^(5,6) . It will necessitate that FDA personnel preparing such instructions have complete understanding of API and formulation processes. Once such instructions are prepared they will have to be internally tested by FDA reviewers to make the application perfect.  This would be equivalent to operators at a manufacturing site testing the operations instructions to see if they are able to produce expected quality product. If not, the processes would need to be repeated till they produce perfect quality product.

Following time table would be followed for ANDA submissions and their grant/denial. 

Plant in USA		Plant outside USA
Day 1	Application arrives at FDA	Day 1	Application arrives at FDA
Day 7 from the filing date	FDA informs the applicant company for completeness or asks for missing information or clarifications. If no additional information is needed the review process continues.	Day 15 from the filing date	FDA informs the applicant company for completeness or asks for missing information or clarifications. If no additional information is needed the review process continues.
Day 15 from the filing date	Company submits the needed information. Review process continues. Plant inspection is scheduled.	Day 45 from the filing date	Company submits the information. Review process continues. Plant inspection is scheduled.
Day 30	Company is granted or denied the ANDA application	Day 90	Company is granted or denied the ANDA application

Girish Malhotra, PE

President

EPCOT International

1.     Competitive Generic Therapies Guidance for Industry , March 14, 2020 

2.     Malhotra, Girish: Can the Review and Approval Process for ANDA at USFDA be Reduced from Ten Months to Three Months? Profitability through Simplicity, March 25, 2017 Accessed March 15, 2020

3.     Malhotra, Girish: What Is Needed for a Regulatory Approval of NDA/ANDA Filings in 90 Days? Profitability through Simplicity,October 24, 2018 Accessed March 15, 2020

4.     Coronavirus shows US needs to restore pharmaceutical production — in Puerto Rico, New York Post, March 7, 2020 Accessed March 16, 2020 

5.     Malhotra, Girish: What Is Needed for a Regulatory Approval of NDA/ANDA Filings in 90 Days?, Profitability through Simplicity, October 24, 2018

6.     Malhotra, Girish: ONE PAGE Road Map to Reduce Drug Shortages, Assure Quality and Improve Affordability, Profitability through Simplicity, December 6, 2019