PharmAsia News
July 8, 2013
Executive Summary
The heavily concentrated sterile injectable manufacturing industry is creating roadblocks to the success of the Accelerated Recovery Initiative; GPhA predicts crisis will linger for years to come.
The Accelerated Recovery Initiative has not yet been able to help alleviate drug shortages because it hasn’t identified situations where the new pilot collaboration could be of any added value, David Gaugh, Generic Pharmaceutical Association senior VP of sciences and regulatory affairs, said at the recent DIA annual meeting.
The Accelerated Recovery Initiative (ARI), a collaboration between GPhA, IMS Health and FDA to address drug shortage issues, is “struggling” because there are limited numbers of shortage drugs where there are three of four companies that could be called to help pick up the manufacturing needs, Gaugh said. Thus, so far, ARI hasn’t identified any shortage situations where it “can go the final step” and “help ramp up production,” he said.
“ARI just wouldn’t help” when only two and sometimes even three companies make a product, Gaugh told the “The Pink Sheet” following a conference session on anticipating future trends in drug shortages.
The collaboration allows IMS to receive information from manufacturers about their projected production and supply schedules of drugs in short supply, allowing IMS to analyze the data and make projections about any gaps between production and supply schedules with potential demand and then give the information to FDA. The goal is to identify manufacturers who could help relieve the shortage and even potentially prevent a shortage from happening in the first place.
To work, ARI needs a minimum of two, preferably three companies (in addition to the company behind the shortage) that are actively producing a drug that is in short supply, Gaugh said.
If just one other company besides the company in shortage produces the drug, ARI isn’t initiated because it “doesn’t offer FDA any new tools.” If a company is notified by FDA about an issue at a competitor, “you don’t know if it’s the one making 10% or 60% of the marketplace,” Gaugh explained, and ARI can help companies understand how much capacity needs to be made up. But if there’s only one company left in the game, FDA already knows this.
And if only two companies besides the shortage company are making the product, it’s unlikely other companies can pick up the slack, Gaugh explained.
For example, if company A has 50% of the market share with the rest divided between companies B and C, if they are running at full capacity and company A stops production, there likely is no way either of the two other companies can change production without causing something else to go in shortage, Gaugh said.
Will ARI Ever Find The Shortage It Can Help?
Despite this key stumbling block, Gaugh said he still thinks ARI is a “very effective” project and process.
But concentration in the generic sterile injectable industry, whose products make up about 80% of drug shortages, long has been cited as one of the contributing factors to shortage issues, raising questions as to how ARI might find a niche where it can be helpful.
In 2010, 60% of sterile injectables were sole-sourced, Richard Dolinar, chairman of the Alliance for Safe Biologic Medicines, said at the DIA meeting. The top three generic injectable manufacturers represent 70% of the market share, he added.
Concentration in the sterile injectable market is high by both Justice Department and Federal Trade Commission standards, with seven firms controlling the U.S. market, FDA’s Marta Wosinska, director of economics staff in CDER’s Office of Planning and Analysis, said at a different DIA session. Furthermore, “competition is really on a molecule level. On a molecule level, it’s more of a rule than an exception that the top producer has more than half the market.”
This year, FDA has said that injectable parenteral nutrition drug shortages have occurred mainly due to delays at one large manufacturing facility.
Exacerbating the concentration issue is that there are limited numbers of facilities and production lines producing the drugs.
Many of the large generic players have only one manufacturing facility producing sterile injectables for the U.S. market, Wosinska said. This has led to shortage “clusters” where multiple shortages hit a therapeutic area at one time.
For example, she said the drug shortages in chemotherapy products can be traced down to about three production lines and there is limited ability to shift that production somewhere else because cytotoxic products like chemotherapy drugs can’t be moved easily to another line for contamination reasons.
Gaugh pointed out generic factories usually have somewhere in the realm of 100 to 200 different products and usually 30 to 40 products per line. “If you have an issue with a line, you are going to affect multiple products.”
What’s more, Wosinska said, “manufacturers don’t seem to establish backup plans.” She said that fewer than 2% of sterile injectable ANDAs have more than one facility listed on their application. “So, basically, the default is for manufacturers to put all their eggs in one basket,”
And even if they have a backup, such backups are “meaningless unless there is spare capacity,” of which there is little, she noted. Even before industry estimated that 30% of the manufacturing capacity was out due to remediation, most of the key sterile generic injectable facilities were operating 24/7, Wosinska said.
She also said she worries that if FDA required companies to have backup capacity it might “backfire” and increase incentives for companies to get out of the sterile injectable market as it could increase the fixed cost of drug production.
Six-Month Notification Often Impossible
FDA often cites increased communication between manufacturers and the agency as one of the reasons it has been able to stave off a number of shortages. Wosinska said early notification “is the most important mechanism to date” and that half of the shortages averted in 2012 were because of early notification.
The agency said it successfully prevented 282 shortages in 2012, compared to 195 in 2011. This compares to 177 new shortages in 2012 and 251 new shortages in 2011. As of July 3, FDA had 126 drugs on its drug shortages index (http://www.fda.gov/Drugs/DrugSafety/DrugShortages/ucm050792.htm ).
But Gaugh warned that most of the time, companies simply aren’t able to provide notification well ahead of time.
During initial negotiations on the new generic drug user fee program and the 2012 FDA Safety and Innovation Act, there was strict language about having to give six months of notification ahead of a drug shortage, but this eventually was changed to six months or as soon as is practicable, Gaugh said.
“The reality of life is you don’t always know and you rarely know six months ahead of time. The only time you are going to know six months ahead of time … is if it’s a low-margin product and you want to get out of that product for whatever reason.” But Gaugh said if your “API supplier calls and says my API batch just blew up, you’re not going to get your API supply for 6 months,” you won’t have that same leeway to tell FDA.
“That ‘as soon as you know’ is what mostly happens,” Gaugh said.
And despite referring to sterile injectable drug manufacturing as FDA’s “too big to fail problem,” Wosinska added that sometimes even if the agency does have notification “the hole is just too big to plug up. It’s not really solvable.”
Gaugh: Four To Six Years Of U.S. Crisis To Come
While drug shortages are not new, in the past shortages lasted days and weeks, not months, Gaugh said. But the issue became a “crisis situation” about three years ago and he expects the U.S. will see shortages at the magnitude they are at today for probably the next four to six years.
“There’s no quick fix,” Gaugh said. With 30% of sterile injectable capacity offline in the U.S. due to FDA compliance issues and manufacturing quality stumbles, companies are repairing, retrofitting and building new complaint manufacturing facilities, “but this takes time,” he said.
“In a sterile injectable facility, fixing a quality manufacturing problem can take anywhere from 12 to 24 months to fix,” he said.
His comment was echoed by Erin Fox, director of the Drug Information Service at the University of Utah Health Center, who also spoke at DIA. The good news, Fox said, is that the rate of new shortages is decreasing, however the bad news is that active shortages aren’t resolving. “A big part of that is because those shortages are complicated, they are due to quality issues and this takes a long time to resolve.”
Further Gaugh said that not all of the seven primary sterile generic injectable players have had all of their manufacturing problems identified yet, and as these get identified, they also will need to be fixed.
But Gaugh also dismissed the notion that manufacturers are relying on “aged or antiquated equipment.” FDA, he said, is holding companies to state of the art compliance, and despite some claims that much of the equipment used is outdated, he noted that even if a company builds a brand new facility, that equipment is between five and seven years old or already “aged when it comes online.” Meanwhile, FDA is holding companies to state-of-the-art standards.
“State of the art today is 2013, is not state of the art 2005, 2004,” Gaugh said, emphasizing that companies don’t deny the need to make these updates but they don’t happen overnight.
One example he gave was the use of isolators. He talked about fill lines that were built five years ago that are still well running machines, but most don’t have isolators, “something that was never in the current good manufacturing practice regulations but that FDA is now requiring of companies.”
Looking toward the future, Gaugh said FDA and others will have to consider whether there is a difference between state-of-the-art manufacturing standards for brand companies that typically make one product on one manufacturing line versus a large generic facility with many products on one line.
Meanwhile, FDA’s Drug Shortages Task Force must come up with a FDASIA-mandated strategic plan to mitigate and prevent shortages, including ideas for incentives to increase manufacturing capacity and promote increased quality by July 9. In February, the agency requested input from industry on quality metrics that could guide this task force and in June it offered more details on its vision for using quality metrics in surveillance of manufacturing quality.
Executive Summary
The heavily concentrated sterile injectable manufacturing industry is creating roadblocks to the success of the Accelerated Recovery Initiative; GPhA predicts crisis will linger for years to come.
The Accelerated Recovery Initiative has not yet been able to help alleviate drug shortages because it hasn’t identified situations where the new pilot collaboration could be of any added value, David Gaugh, Generic Pharmaceutical Association senior VP of sciences and regulatory affairs, said at the recent DIA annual meeting.
The Accelerated Recovery Initiative (ARI), a collaboration between GPhA, IMS Health and FDA to address drug shortage issues, is “struggling” because there are limited numbers of shortage drugs where there are three of four companies that could be called to help pick up the manufacturing needs, Gaugh said. Thus, so far, ARI hasn’t identified any shortage situations where it “can go the final step” and “help ramp up production,” he said.
“ARI just wouldn’t help” when only two and sometimes even three companies make a product, Gaugh told the “The Pink Sheet” following a conference session on anticipating future trends in drug shortages.
The collaboration allows IMS to receive information from manufacturers about their projected production and supply schedules of drugs in short supply, allowing IMS to analyze the data and make projections about any gaps between production and supply schedules with potential demand and then give the information to FDA. The goal is to identify manufacturers who could help relieve the shortage and even potentially prevent a shortage from happening in the first place.
To work, ARI needs a minimum of two, preferably three companies (in addition to the company behind the shortage) that are actively producing a drug that is in short supply, Gaugh said.
If just one other company besides the company in shortage produces the drug, ARI isn’t initiated because it “doesn’t offer FDA any new tools.” If a company is notified by FDA about an issue at a competitor, “you don’t know if it’s the one making 10% or 60% of the marketplace,” Gaugh explained, and ARI can help companies understand how much capacity needs to be made up. But if there’s only one company left in the game, FDA already knows this.
And if only two companies besides the shortage company are making the product, it’s unlikely other companies can pick up the slack, Gaugh explained.
For example, if company A has 50% of the market share with the rest divided between companies B and C, if they are running at full capacity and company A stops production, there likely is no way either of the two other companies can change production without causing something else to go in shortage, Gaugh said.
Will ARI Ever Find The Shortage It Can Help?
Despite this key stumbling block, Gaugh said he still thinks ARI is a “very effective” project and process.
But concentration in the generic sterile injectable industry, whose products make up about 80% of drug shortages, long has been cited as one of the contributing factors to shortage issues, raising questions as to how ARI might find a niche where it can be helpful.
In 2010, 60% of sterile injectables were sole-sourced, Richard Dolinar, chairman of the Alliance for Safe Biologic Medicines, said at the DIA meeting. The top three generic injectable manufacturers represent 70% of the market share, he added.
Concentration in the sterile injectable market is high by both Justice Department and Federal Trade Commission standards, with seven firms controlling the U.S. market, FDA’s Marta Wosinska, director of economics staff in CDER’s Office of Planning and Analysis, said at a different DIA session. Furthermore, “competition is really on a molecule level. On a molecule level, it’s more of a rule than an exception that the top producer has more than half the market.”
This year, FDA has said that injectable parenteral nutrition drug shortages have occurred mainly due to delays at one large manufacturing facility.
Exacerbating the concentration issue is that there are limited numbers of facilities and production lines producing the drugs.
Many of the large generic players have only one manufacturing facility producing sterile injectables for the U.S. market, Wosinska said. This has led to shortage “clusters” where multiple shortages hit a therapeutic area at one time.
For example, she said the drug shortages in chemotherapy products can be traced down to about three production lines and there is limited ability to shift that production somewhere else because cytotoxic products like chemotherapy drugs can’t be moved easily to another line for contamination reasons.
Gaugh pointed out generic factories usually have somewhere in the realm of 100 to 200 different products and usually 30 to 40 products per line. “If you have an issue with a line, you are going to affect multiple products.”
What’s more, Wosinska said, “manufacturers don’t seem to establish backup plans.” She said that fewer than 2% of sterile injectable ANDAs have more than one facility listed on their application. “So, basically, the default is for manufacturers to put all their eggs in one basket,”
And even if they have a backup, such backups are “meaningless unless there is spare capacity,” of which there is little, she noted. Even before industry estimated that 30% of the manufacturing capacity was out due to remediation, most of the key sterile generic injectable facilities were operating 24/7, Wosinska said.
She also said she worries that if FDA required companies to have backup capacity it might “backfire” and increase incentives for companies to get out of the sterile injectable market as it could increase the fixed cost of drug production.
Six-Month Notification Often Impossible
FDA often cites increased communication between manufacturers and the agency as one of the reasons it has been able to stave off a number of shortages. Wosinska said early notification “is the most important mechanism to date” and that half of the shortages averted in 2012 were because of early notification.
The agency said it successfully prevented 282 shortages in 2012, compared to 195 in 2011. This compares to 177 new shortages in 2012 and 251 new shortages in 2011. As of July 3, FDA had 126 drugs on its drug shortages index (http://www.fda.gov/Drugs/DrugSafety/DrugShortages/ucm050792.htm ).
But Gaugh warned that most of the time, companies simply aren’t able to provide notification well ahead of time.
During initial negotiations on the new generic drug user fee program and the 2012 FDA Safety and Innovation Act, there was strict language about having to give six months of notification ahead of a drug shortage, but this eventually was changed to six months or as soon as is practicable, Gaugh said.
“The reality of life is you don’t always know and you rarely know six months ahead of time. The only time you are going to know six months ahead of time … is if it’s a low-margin product and you want to get out of that product for whatever reason.” But Gaugh said if your “API supplier calls and says my API batch just blew up, you’re not going to get your API supply for 6 months,” you won’t have that same leeway to tell FDA.
“That ‘as soon as you know’ is what mostly happens,” Gaugh said.
And despite referring to sterile injectable drug manufacturing as FDA’s “too big to fail problem,” Wosinska added that sometimes even if the agency does have notification “the hole is just too big to plug up. It’s not really solvable.”
Gaugh: Four To Six Years Of U.S. Crisis To Come
While drug shortages are not new, in the past shortages lasted days and weeks, not months, Gaugh said. But the issue became a “crisis situation” about three years ago and he expects the U.S. will see shortages at the magnitude they are at today for probably the next four to six years.
“There’s no quick fix,” Gaugh said. With 30% of sterile injectable capacity offline in the U.S. due to FDA compliance issues and manufacturing quality stumbles, companies are repairing, retrofitting and building new complaint manufacturing facilities, “but this takes time,” he said.
“In a sterile injectable facility, fixing a quality manufacturing problem can take anywhere from 12 to 24 months to fix,” he said.
His comment was echoed by Erin Fox, director of the Drug Information Service at the University of Utah Health Center, who also spoke at DIA. The good news, Fox said, is that the rate of new shortages is decreasing, however the bad news is that active shortages aren’t resolving. “A big part of that is because those shortages are complicated, they are due to quality issues and this takes a long time to resolve.”
Further Gaugh said that not all of the seven primary sterile generic injectable players have had all of their manufacturing problems identified yet, and as these get identified, they also will need to be fixed.
But Gaugh also dismissed the notion that manufacturers are relying on “aged or antiquated equipment.” FDA, he said, is holding companies to state of the art compliance, and despite some claims that much of the equipment used is outdated, he noted that even if a company builds a brand new facility, that equipment is between five and seven years old or already “aged when it comes online.” Meanwhile, FDA is holding companies to state-of-the-art standards.
“State of the art today is 2013, is not state of the art 2005, 2004,” Gaugh said, emphasizing that companies don’t deny the need to make these updates but they don’t happen overnight.
One example he gave was the use of isolators. He talked about fill lines that were built five years ago that are still well running machines, but most don’t have isolators, “something that was never in the current good manufacturing practice regulations but that FDA is now requiring of companies.”
Looking toward the future, Gaugh said FDA and others will have to consider whether there is a difference between state-of-the-art manufacturing standards for brand companies that typically make one product on one manufacturing line versus a large generic facility with many products on one line.
Meanwhile, FDA’s Drug Shortages Task Force must come up with a FDASIA-mandated strategic plan to mitigate and prevent shortages, including ideas for incentives to increase manufacturing capacity and promote increased quality by July 9. In February, the agency requested input from industry on quality metrics that could guide this task force and in June it offered more details on its vision for using quality metrics in surveillance of manufacturing quality.