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Why Drug Shortages Occur

The factors that contribute to drug shortages are complex and multidimensional. Drug shortages can occur for a variety of reasons and at a variety of points throughout the drug supply chain. These may include: Shifts in clinical practices; wholesaler and pharmacy inventory practices; raw material shortages; changes in hospital and pharmacy contractual relationships with suppliers and wholesalers; natural disasters; public health emergencies and manufacturing issues. For example, a manufacturer may experience an unforeseen breakdown in manufacturing equipment that disrupts production.

According to the FDA, quality and manufacturing issues are the primary reason for shortages. As an example, there has been a large number of shortages for generic sterile injectable medicines over the years. These are often older medicines where they may rely on older manufacturing sites and processes limiting production capacity, which makes these drugs more vulnerable to shortage.

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Preventing & Mitigating Shortages

PhRMA member companies are deeply concerned about patients’ health and well-being. Our industry is committed to maintaining good manufacturing practices, as well as working closely with the FDA, supply chain partners, health care providers, and patients to prevent and mitigate drug shortages of brand-name prescription medicines.

Biopharmaceutical manufacturers have spent decades building global supply chains to ensure patients in the United States and around the world have access to the medicines they need. The industry has made significant investments in the design, maintenance and modernization of their manufacturing facilities and quality control and testing systems. For example, a new biopharmaceutical manufacturing facility can take between 5 and 10 years to build, costing $1 to $2 billion. These complex and carefully managed global supply chains are designed with resiliency in mind to ensure continuity of patient access to medicines, including in the event of a public health issue or other emergency.

PhRMA members develop risk mitigation plans and make significant investments in risk management systems that include a significant focus on ensuring resiliency in global supply chains to ensure continuous supply of brand medicines to meet patient needs. Manufacturers also work closely with the FDA to address the underlying causes of shortages and to mitigate and avoid potential shortages.

From January 1 - December 31, 2019, manufacturers worked closely with the FDA's Center for Biologics Evaluation and Research (CBER) and FDA's Center for Drug Evaluation and Research (CDER) to prevent 154 drug shortages. When there is a shortage, the FDA may also engage with other biopharmaceutical companies to determine whether they may have the capacity to help address a shortage. If other manufacturers can ramp up production and are willing to do so, the FDA can and does expedite review of production lines and facilities to help resolve shortages of medically necessary drugs.

In addition, when a shortage occurs, and a biopharmaceutical manufacturer has inventory that is close to expiry or already expired, the FDA can work with the manufacturer to review and approve an extended expiration date if the manufacturer has data to support potential extension of the expiration date for that inventory.

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Reporting Drug Shortages

Manufacturers of life-saving medicines or those intended to prevent or treat a debilitating disease, are required to notify the FDA six months in advance, or as soon as practicable, of a permanent discontinuance or interruption in manufacture of the drug that is likely to lead to a meaningful disruption in supply in the U.S. For other medications, manufacturers are encouraged to notify the FDA of any anticipated disruption in supply. The FDA provides annual reports to Congress on actions taken to prevent and mitigate drug shortages.

The biopharmaceutical industry is committed to providing early notification of potential shortages and working with the FDA and other stakeholders to maintain treatment options and prevent a shortage. 

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Navigating Shortages During the COVID-19 Pandemic

As the biopharmaceutical industry continues to research and develop innovative solutions to help combat the COVID-19 pandemic, the FDA and biopharmaceutical companies are working together to ensure continuity in the medicine supply chain. The FDA has proactively worked with manufacturers to prevent and mitigate any potential disruptions due to COVID-19, including expediting the review of a new supplier or manufacturing site as needed to avert shortages.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act, which was signed into law in March 2020, granted the FDA additional authority to address drug shortages. Among other provisions, manufacturers of life-saving medicines, their active pharmaceutical ingredients, and any associated medical device included with a medicine for its preparation or administration are now required to develop a redundancy risk management plan identifying and evaluating risks to the supply of the drug for each establishment in which the drug or active pharmaceutical ingredient is manufactured.

Moreover, the Center for Drug Evaluation and Research has since required biopharmaceutical manufacturers to complete ongoing evaluations of their entire supply chains, including active pharmaceutical ingredients and finished dosage forms.