How the Vicious Cycle of Drug Shortages Happens

Have you run into problems getting your hands on lidocaine or other meds recently? From IV fluids to injectable opioid analgesics, the shortage on critical medications have emergency and operating rooms across the country functioning in a constant state of despair. On nearly a daily basis, healthcare providers are often scrambling to find a way to work around its facilities’ crippling supply of essential drugs. The situation is so dire that in the event of a natural or man-made disaster, many providers are fearful of whether they’d be prepared to handle such a demanding event when they’re already drowning in the day-to-day as it is.

Unfortunately, over the last year, the drug shortage has only gotten increasingly worse. In fact, a recent poll conducted by the American College of Emergency Physicians found that ninety-one percent of its participating physicians are experiencing a current shortage of critical medicines in their primary emergency department, eighty-eight percent have had to take time away from patients to explore alternative treatments and medications, and seventy-five percent responded that the shortages have continually increased in 2018.

In June, the American Medical Association declared the shortages on all pharmaceuticals an “urgent public health crises” and has asked the federal government to review the issue as a national security initiative. While ramping up production seems like the plausible solution to the fix the ongoing problem, unfortunately, it’s not so simple. Numerous factors play an ongoing role in the drug shortage crisis which keep this vicious cycle from making a clean break.

The hindrance of market conditions

The federal Government Accountability Office (GAO) recently conducted a report that looked specifically at the shortage of injectable drugs, since injectables account for 65% of the pharmaceuticals that are currently running scarce. The report discovered that in addition to a decrease in manufacturers as well as generic sales and price declines (which are the largest contributing factors hindering supply, according to the GAO), limited inventory, production complexity, and constrained manufacturing capacity were the most noticeable market conditions that exacerbate these shortages even further. As outlined in an article published by the American Council on Science and Health, here’s a breakdown of the GAO’s report on such:

           Limited Inventory

Many pharmaceutical manufacturers produce just-in-time inventory; meaning that they only acquire materials to make certain drugs as needed, which is done in order to lower their storage costs. Generally, the manufacturer only keeps two to three months worth of inventory of a certain drug; wholesalers only keep a month stock and the end-users, like hospitals and physicians, only keep a few weeks of a drug stocked.

Because the supply is already limited, when there is an unforeseen disruption like the supply interruption of raw ingredients that Fresenius Kabi says is to blame for its production lidocaine injections or a natural disaster such as the the major hurricanes that struck drug production facilities in Puerto Rico, the system is put into an even more fragile state and there isn’t enough stockpile of the drug to smooth over the disruption.

Production Complexity

Some pharmaceuticals, like sterile injectables, are more complex to produce. Because the manufacturer must maintain the sterility of these products, they have to have dedicated lines and facilities for the production of that drug to avoid cross-contamination and often have to limit how much of the drug is produced at one time to reduce such risks.

Constrained Manufacturing Capacity

Many of the drugs in the current shortage are generic. Because the generic drug manufacturing market is highly competitive and highly concentrated, the few companies that do produce generic medications set up a production line to make one product at time; they then reset their facilities and move onto the next drug, and so on and so forth. As stated in the article by the ACSH, the production schedules and “the additional lag time of resetting production lines exacerbates the shortages produced by just-in-time inventory.”

Prices and Regulatory Factors

In it’s findings, the GAO also discovered that prices and regulations play a role shortages. Researchers found that because prices and profit margins of generic medications decrease when the number of suppliers increase and enter the market, some suppliers “exit the market for less profitable drugs in favor of more profitable ones or make it unprofitable to increase supply, which could make the market vulnerable to shortages.” Unfortunately, as stated on its website, the FDA cannot require a manufacturer to keep making a drug it wants to discontinue.

The FDA’s position

In terms of the manufacturing process, its well known that pharmaceutical manufacturers have to receive FDA approval before they can begin producing a new drug. According to the ACSH, the average drug shortage last 418 days, while an expedited FDA review to approve a new drug can take at least a year. Furthermore, manufacturers have to receive re-approval from the FDA when manufacturing conditions or processes change in case the drugs may have been adversely affected in terms of strength, potency, quality or purity. The length of time for the FDA’s approval in either of these scenarios certainly do not help matters.

That said, the FDA does state that it works to alleviate the drug shortage crisis by working with other firms that make these drugs in order to help them ramp up production (provided the company is willing to do so). The FDA also claims that they do seek action to improve manufacturing and quality problems in order to address underlying causes of shortages.

As stated by FDA Commissioner Scott Gottlieb, MD, drug shortages “are an inevitable consequence of an imperfect system. With better planning, we can minimize shortages throughout the supply chain. But, in the near term, we won’t be able to fully eliminate the possibility that new shortages will arise. Meaningfully impacting the structures and market challenges that can give rise to shortages will require more coordination among public and private stakeholders.”

What the manufacturers have to say

Based on information provided by manufacturers to the University of Utah Drug Information Service in 2017, 53% of attributed their shortages to unknown factors; 30% blamed manufacturing; 8% attributed shortages to supply and demand; 3% cited natural disasters as the culprit; 2% said their shortages were due to issues with raw materials and the remaining 4% of manufacturers had discontinued medications.

Whatever the underlyings reasons may be, the revolving issues of drug shortages in healthcare don’t seem to be coming to an end any time soon. For a full list of current shortages, possible alternatives and updates on when specific pharmaceuticals may be available, providers can find easily accessible information through the American Society of Health-System Pharmacists.

Has your practice been adversely impacted by shortages on certain drugs?