The vision of Life Science Leader is to help facilitate connections and foster collaborations in pharma and med device development to get more life-saving and life-improving therapies to market in an efficient manner. Connect, Collaborate, Contribute
Issue link: https://lifescienceleadermag.epubxp.com/i/216720
Pharma Business sterile injectable products. Consequently, when one manufacturer has to shut down even temporarily, the remaining manufacturers are often unable to quickly ramp up production to meet global demand. Likewise, sometimes a scarcity of raw materials or other drug components like excipients can slow down drug manufacturing and cause shortages. These shortages can be devastating, especially when a primary or secondary raw-material supplier delays or discontinues production. Also, financial challenges have forced many smaller drug manufacturers to scale back production or shut down entirely. According to a 2011 U.S. government report, at least 90 percent of the global supplies of certain drugs are produced by a single manufacturer. Not surprisingly, manufacturing problems at a single provider's production facilities can have severe consequences on drug availability. This was the case in 2011 for the drug Doxil (liposomal doxorubicin) used to treat ovarian cancer, multiple myeloma, and the HIV-related Kaposi's sarcoma. In this instance, Ben Venue Laboratories, the sole provider of Doxil worldwide, was forced to suspend manufacturing operations because of serious quality control problems. This resulted in massive global shortages of Doxil, which continue to persist today despite resumption of manufacturing at the Ben Venue facility. Interestingly, some industry insiders have accused the FDA of causing the shortages, saying that overzealous enforcement and poor communication have caused plants to slow production or close needlessly. Others contend that many drug shortages are firmly rooted in business practices and decisions made by the companies that manufacture them. Some of the factors that may influence these decisions include profits, intensity of generic competition, market share considerations, manufacturing costs, anticipated clinical demand, regulatory compliance requirements, and costs associated with correcting manufacturing problems or mergers. In addition, economic pressures are forcing many manufacturers to routinely maintain lower drug inventories (no surpluses) or to even consider removing lower-margin drugs from the market. Finally, some insiders like Campbell and Adams believe that most drug shortages can be ascribed to fundamentally flawed business practices of the so-called "drug middlemen" — wholesalers or distributors, prime vendors, healthcare systems, and group-purchasing organizations (GPOs) — that dominant operation of the global drug supply chain. For example, most of these organizations have embraced the "just in time" business model championed by the automotive and semiconductor industries in the 1990s to reduce inventory costs and optimize cash flow. Critics contend that, while this business model may help to cut overhead costs and maximize profits, there are no drug surpluses that can be tapped when drugs are in high demand and short supply. Others believe that questionable business practices like drug stockpiling (in advance of price increases), delivery delays, preferential selling practices/quotas, contract disputes, and hoard- ing based on rumors of impending shortages are responsible for the increased frequency of drug shortages. THE GOVERNMENT OFFERS SOME SOLUTIONS Growing health concerns about chronic U.S. drug shortages prompted President Obama in October 2011 to issue an executive order that required the FDA to take more action to help alleviate shortages. Recommended actions included more comprehensive surveillance and reporting, expediting regulatory reviews of manufacturing changes and new manufacturing sites, and monitoring the behavior of manufacturers and distributors to prevent stockpiling or price gouging of scarce prescription medicines. In a separate letter to drugmakers, Obama reminded them of their legal and ethical responsibilities and urged them to work more effectively to share information in advance of a possible shortage. Spurred by the executive order, Congress enacted legislation in the summer of 2012 that increased the FDA's authority to avert drug shortages by requiring drugmakers to report drug discontinuations and supply interruptions, improve coordination between federal agencies, and speed the approval of generic drugs. It is important to note, however, that the FDA cannot require a company to produce a drug, nor does the agency have authority over business decisions related to availability or prices set by manufacturers. Moreover, the FDA has no jurisdiction over shortages that occur because of contractual problems among manufacturers, distributors, or end users. Consequently, it is not clear how much the new legislation will help to curb the frequency of future drug shortages. Although many believe that the FDA's expanded powers will better help to manage drug shortages, others like Terry Walsh, head of comparator networks at TransCelerate Biopharma (a consortium of 17 pharmaceutical companies), think that industry initiatives such as the Clinical Trials Comparator Network created by TransCelerate will also be vitally important. According to Walsh, the network was created because of the unpredictability and difficulty in sourcing many comparator and cotherapy drugs (especially in oncology, pain management, rare disease products, and anti-inflammatory monoclonal antibodies) that can delay or halt the progress of clinical trials. He believes that the Clinical Trials Comparator Network will help to overcome sourcing problems and allow its members to readily obtain comparator drugs directly from one another when they need them, in appropriate quantities, and with proper documentation. "This will help to prevent delays and expedite new drug approvals," said Walsh. Another solution to reducing drug shortage—mainly advocated by Physicians Against Drug Shortages and its members—involves legislative action and reforms that curb the financial power and limits the purchasing power of GPOs. Recently, six senior congressmen called on the U.S. Government Accounting Office (GAO) to investigate whether business and contract practices by GPOs are contributing factors to drug shortages. December 2013 LifeScienceLeader.com 45