A Republican strategy for addressing drug shortages as part of user fee legislation appears to still include regulatory streamlining and reimbursement changes even as legislation to require more notification builds steam.

Rep. John Shimkus, R-Ill. suggested regulations may need to be changed to bring additional manufacturers online quicker in shortage situations. He highlighted permit, siting and regulatory delays that would slow the opening of new production lines for shortage drugs.

“I think that’s where some of this debate needs to be,” Shimkus said during a Feb. 9 hearing of House Energy and Commerce Subcommittee on Health focused on shortages and the generic drug and biosimilar user fee agreements. “How do we move aggressively, safely to allow expansions to meet these shortages?”

FDA says it can expedite approval of new manufacturing lines and facilities to prevent or mitigate a shortage. But David Gaugh, VP of regulatory sciences for the Generic Pharmaceutical Association, suggested the agency approval process does not allow for additional manufacturers to enter the market fast enough.

Gaugh, with some prodding by questions from Shimkus, said economic forces are present that attract other manufacturers in a shortage situation, but facility expansion is a “seven-year proposition.”

“It’s purely a capacity limitation to be able to produce those [sterile generic injectable drugs most commonly experiencing shortages],” Gaugh said. “The FDA approval is an 18-month process and that’s just to get the site approved. And then to move the product into that site is an additional [time period].”

The agency has implored manufacturers to ensure they have back-up active pharmaceutical ingredient suppliers ready in case of a problem and also encouraged them to investigate and fix process problems so they do not escalate into problems that lead to shortages Also see "Drug Shortages: Can The Blame Game Help Find Solutions?" - Pink Sheet, 3 October, 2011..

The agency has argued many sterile injectable drug shortages in 2010 and 2011 were caused by manufacturing and quality issues. It also said its inspection policies cannot cause or prevent drug shortages Also see "To Prevent Drug Shortages, Don't Look To Inspections, FDA Says" - Pink Sheet, 22 August, 2011..

340B Returns As An Issue

The tenor of the discussion shows that Republicans continue to dismiss the notion that simply expanding FDA notification and increasing manufacturer communication will reduce the number of shortages.

Rep. Bill Cassidy, R-La., registered concerns during the hearing that the federal 340B drug discount program could prevent the market from increasing a drug’s price to attract more manufacturers.

“There is no reason a price signal could not be sent, but there actually are constraints on how 340B will allow a company to raise its prices,” Cassidy said during the hearing. “I am struck that this price signal Shimkus is after is dampened by the 340B process.”

The complaints about pricing problems are not new. Witnesses last fall told a House Oversight and Government Reform subcommittee that 340B pricing could cause some shortages.

While some questioned whether the program is too small to have an impact, others said it, combined with other government programs like Medicaid, increases the downward pressure on prices.

Republicans also argued during that hearing that knowing in advance that a drug will experience a shortage would not fix the problem Also see "Medicare Reimbursement Rate Targeted As Culprit For Drug Shortages" - Pink Sheet, 30 November, 2011..

Several proposals have been under development, but formal bills addressing the economic issue have not been introduced.

Sen. Orrin Hatch, R-Utah, also has circulated a proposal that would include economic incentives, including reimbursement changes, as weapons to fight shortages. So far he has not introduced a bill on the issue Also see "Drug Shortage Fixes Migrating Toward Economics" - Pink Sheet, 28 November, 2011..

The Energy and Commerce Committee also is working on a “comprehensive” solution to the drug shortage problem that potentially could include economic solutions Also see "“Comprehensive” Drug Shortage Mitigation Bill Under Development In House" - Pink Sheet, 19 December, 2011..

Drug shortage legislation is expected to be included in an omnibus user fee package that will reauthorize the prescription drug and medical device user fee programs as well as create the generic drug and biosimilar user fees.

Rep. Joe Pitts, R-Pa., chairman of the House Energy and Commerce Health Subcommittee, wants the package passed and signed by President Obama by June Also see "How "Clean" Will PDFUA V Be? Rep. Pitts Explains His Vacuuming Technique" - Pink Sheet, 18 July, 2011..

More Ways To Communicate Problems

The economic arguments continue to permeate throughout the House despite a growing number of congressional, and now industry, proposals related to and supporting efforts to increase communication.

A popular bill, co-sponsored by Reps. Diana DeGette, D-Colo., and Tom Rooney, R-Fla., would require manufacturers to give FDA advanced warning of a production interruption or stoppage, which FDA wants.

The White House also supports the measure and Obama issued an executive order Oct. 31 encouraging manufacturers to voluntarily report known production problems to FDA that could lead to a shortage.

Another pending bill would build on the early warning idea and require creation of critical drug shortage lists as well as require notification systems for the public and manufacturers Also see "Shortage Notification May Have Legislative Momentum Again After BIO Questions Reimbursement Fix" - Pink Sheet, 30 January, 2012..

FDA continues to tout its successes in preventing shortages when receiving an early warning. The total has risen to more than 250 since the beginning of 2010, including 114 since Obama issued the executive order, according to written testimony from CDER Director Janet Woodcock submitted to the subcommittee.

GPhA also has released an enhanced communication proposal that would require manufacturers to report supply and other data to an independent third party that would forward evidence of a pending shortage to FDA when it arises.

That proposal still has several questions that must be answered and also must gain Federal Trade Commission and Health and Human Services Department approval before it could be implemented Also see "Drug Shortages: Generic Industry’s Self Regulation Proposal Questioned At House Hearing" - Pink Sheet, 9 February, 2012..

GOP Drug Shortage Strategy Pushes FDA Reform, Reimbursement Over Notification

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