HHS and GAO Reports Highlight Need to Address Drug Shortages

by McDermott Will & Emery

Two recently released reports from the U.S. Department of Health and Human Services (HHS) and the U.S. Government Accountability Office, respectively, focus on the impact of prescription drug shortages, their potential causes and the role that HHS, particularly the Food and Drug Administration, plays in identifying, tracking and alleviating these problems.

In recent years, an increasing number of drug shortages have threatened public health by reducing—if not eliminating—patient access to critical pharmaceuticals.  As such, drug shortages have been the subject of considerable federal activity, including an October 2011 Executive Order that directed the U.S. Food and Drug Administration (FDA) to “take steps that will help to prevent and reduce current and future disruptions in the supply of lifesaving medicines” (e.g., requiring broader reporting of manufacturing discontinuances and expediting regulatory reviews), and a December 2011 interim final rule issued by the FDA that amended the FDA’s early notification requirements. 

FDA Safety and Innovation Act

Perhaps most importantly, however, the FDA Safety and Innovation Act, Pub. L. No. 112-144, 126 Stat. 993 (2012) (FDASIA), significantly enhances the FDA’s ability to identify and mitigate the effects of drug shortages by:

  • Requiring all manufacturers of all covered prescription drugs (i.e., drugs that are life-supporting, life-sustaining or intended for use in the prevention or treatment of debilitating disease or condition, including any such drug used in emergency medical care or during surgery (except for radiopharmaceuticals and other products designated by the agency)) to notify the FDA of permanent discontinuation or temporary interruption in manufacturing (previously, the notification requirement applied only to sole product manufacturers)
  • Authorizing the FDA to require (by regulation) that biological product manufacturers be included among those manufacturers required to provide notice of permanent discontinuation or temporary interruption
  • Requiring the FDA to send a non-compliance letter to firms that fail to provide the required notice of permanent discontinuation or temporary interruption
  • Expressly permitting the FDA to continue expediting reviews and inspections that may mitigate a shortage
  • Requiring the improvement of internal and external communications by the FDA regarding shortages
  • Mandating the development and implementation of a strategic plan for enhancing the FDA’s response to preventing and mitigating shortages
  • Triggering the initiation of a new rulemaking process (which will replace the December 2011 interim final rule) to incorporate the new requirements set forth in FDASIA

FDA Report

The FDASIA also requires the Department of Health and Human Services to submit an annual report on drug shortages to the U.S. Senate Committee on Health, Education, Labor & Pensions and the House Energy and Commerce Committee.  On February 5, 2014, the FDA submitted its first report, in which it discussed actions it has taken to identify and prevent or mitigate prescription drug shortages, and described the impact drug shortages have on the health care system, particularly on patients and health care providers.  With respect to the efficacy of the agency’s activities, the report states that the total number of actual drug shortages decreased from 250 in 2011 to 117 in 2012, with 280 other drug shortages prevented in 2012.  The FDA attributes these results to the above-described presidential, congressional and agency activity, which has resulted in manufacturers providing the FDA with earlier notice of potential shortages and the agency having additional time to work with sponsors and other groups to maintain patient access to critical medication. 

The report also highlights the mitigation efforts that the FDA can implement when faced with a potential shortage.  Mitigation efforts may include allowing other manufacturers to increase production to make up for the shortfall; expediting reviews and inspections relating to manufacturers attempting to restore production, competing manufacturers interested in starting new production and competing manufacturers interested in increasing existing production of products in shortage; and exercising temporary enforcement discretion for new sources of drugs.  The FDA also notes that is exercised its regulatory flexibility in order to prevent 140 drug shortages in the first nine months of 2013.

GAO Report

The FDASIA also requires the Government Accountability Office (GAO) to issue a report that examines the causes of drug shortages and formulates recommendations to prevent or minimize them.  On February 10, 2014, the GAO released this analysis.  To create this report, the GAO reviewed data, interviewed stakeholders and performed a meta-analysis of 20 different studies as well as FDA data.

The GAO found that, despite the efforts of the FDA, the number of drugs shortages remained high.  The GAO report notes that 44 percent of the shortages were sterile injectable generic drugs, 17 percent were sterile injectable brand name drugs and the remainder were oral drugs.  Even more disturbing, the GAO found that during the period from 2007 to 2012, nearly half of the reported shortages were for drugs that were in shortage multiple times.  According to the report four categories of drugs, anesthetics, anti-infectives, cardiovascular agents and nutritive drugs accounted for 53 percent of all drug shortages.

The GAO’s analysis indicates that the majority of drug shortages (70 percent) are related to manufacturing quality, delays or capacity issues.  While the report identified additional underlying factors, such as payer-related issues, particularly Medicare Part B pricing, and market-based price competition, the report does not present any of these factors as being significant causes of shortages.

Providers indicated to the GAO that drug shortages can affect patient care beyond just the inability to access drugs in short supply.  Provider groups highlighted the risks stemming from the inability to find suitable and effective alternative drugs, rationing care when drugs have limited availability and the increased cost of short supply drugs.  Provider groups also noted that their practices were required to devote additional staff and provider time and costs on managing drug inventory instead of providing direct patient care.

The GAO report lauds the FDA’s efforts to identify and mitigate drug shortages.  However, it notes that many contributing factors are beyond the FDA’s control.   The GAO recommends that the FDA streamline its existing processes by better and more consistently using the information it collects to further enhance its ability to identify, track and prevent drug shortages.


Patients, providers, manufacturers and payers alike will be encouraged by the FDA’s report of reductions in and the prevention of drug shortages.  Nevertheless, the GAO’s report and remaining shortage concerns suggest that significant progress remains to be made.  Therefore, where required to more fully address shortage-related issues, the FDA’s regulatory policy may evolve over time—at least to the extent required and permitted under the FDASIA.

For example, as mentioned above, the FDA intends to replace the 2011 interim final rule with regulations consistent with the FDASIA’s requirements.  The comment period for the proposed replacement rule closed in early January 2014, so the FDA could promulgate the final regulations as soon as later this year.  Therefore, interested entities—especially manufacturers—should carefully monitor communications regarding the final rule from the FDA, as well as other FDA activities under its drug shortage program.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© McDermott Will & Emery | Attorney Advertising

Written by:

McDermott Will & Emery

McDermott Will & Emery on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.