How to Prevent Shortages of Life-Saving Drugs

(Bloomberg Opinion) -- American drug companies pride themselves on innovation, and much of today’s policy debate has focused on the high prices of the newest, patent-protected drugs. But older drugs were innovative once, and some — if available — still offer people with once-deadly diseases their best shot at life. That’s why efforts to make drugs more accessible have to address shortages as well as high prices. Some are.

Lifesaving cancer drugs or IV fluids can run short on a routine basis (as I explored in a previous column) and experts also say there’s no plan in place to deal with emergencies. Had the anthrax attacks that occurred in the wake of 9/11 been more extensive, as many feared, there would never have been enough of the recommended antibiotic, Cipro, to go around.

Various people are proposing solutions — to the acute and the chronic shortages — that are entrepreneurial, legislative and technological.

Erin Fox, director of the drug information service at the University of Utah, said that this is a stubborn problem. Over the last 20 years, drugs that are essential to patients have run short because they are made in only one or two plants in the world. Despite an unmet need, aspiring new competitors face huge barriers to entry. Even drugs with published formulas can be complex and difficult to manufacture in a way that meets legal requirements. And basic items such as IV bags are not that easy to make with consistent and acceptable sterility.

Last year, then-FDA commissioner Scott Gottlieb proposed a move to approve more suppliers, but even with lower barriers to entry, it might not make economic sense for companies to build an expensive factory, or revamp a crumbling one, to make very cheap drugs with a minuscule profit margin.

She and other policy experts say they’re looking with some hope to a new nonprofit company, Civica RX, a result of hospitals joining together to produce life-saving generic medicines in a reliable way. It may be hard to pull off. As this Bloomberg Opinion column from last year concludes: There’s good reason hospitals were not in the drug business.

As Megan McArdle warned then, “rarely do leaders in such ventures stop to ask the reasons for the high prices and the scarcity, or to wonder whether those reasons will magically go away once they own their suppliers.” But Fox, who has spent years studying those reasons, is more optimistic. Civica Rx would address the root of the shortage problem by using long-term contracts with existing facilities, thus getting both sides to commit to a continued supply. To decide which drugs to make, the company could start with the World Health Organization’s list of “essential medicines.”

Others are looking to the government to make drugs whose supply has been precarious. Steven Knievel, an “access to medicines” advocate at Public Citizen, points out that Senator Elizabeth Warren has proposed legislation that would accomplish something similar to Civica Rx. Called the Affordable Drug Manufacturing Act, it would establish a new office within the Department of Health and Human Services tasked with making generic drugs. It’s meant to address both high costs and shortages.

A government project would withstand the economic barriers faced by private companies — but getting such legislation passed is nearly impossible because the drug industry has such a powerful influence in Congress. “We really do have a situation of regulatory capture,” said Wendell Potter, a former insurance PR executive turned patient advocate, and president of Business Initiative for Health Policy. “Pharmaceuticals seem to have such a grip on FDA and Congress … so it’s extraordinarily hard to get legislation passed that would get some relief.”

Framing shortages as a matter of national defense might help drum up the political will needed to get legislation that favors patients. Last year, a group of health care organizations met to consider drug shortages as a matter of national security. They laid out a number of policy changes that might protect patients from both routine shortages and emergencies.

One proposal that had widespread support is requiring companies to notify the FDA as early as possible of an impending shortage. In principle, this could aggravate shortages by encouraging hoarding — but ideally the warnings would speed up the free market’s response by raising prices for a generic drug and prompting other manufacturers to produce it. It would also give doctors and hospitals time to prepare and find workarounds, as Fox said people did when damage from Hurricane Maria interrupted a critical supply of IV bags of saline solution.

Improved technology could turn things around — especially the emerging field of so-called continuous manufacturing. The idea is to replace the usual step-by-step batch processing with a much more automated, continuous process that takes in raw ingredients and produces a finished, packaged drug. Pilot plants are being developed, such as this joint effort between Novartis and MIT.

There’s so much energy being poured into health care on so many fronts, trying to improve existing treatments and cure conditions that are now beyond the reach of medicine. But it would be wrong to get caught up in the novelty of innovation and leave behind those with treatable conditions who aren’t able to get the drugs they need. Some combination of technology, legislation, regulatory nudges and nonprofit initiatives can turn drug shortages into a truly rare problem.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Faye Flam is a Bloomberg Opinion columnist. She has written for the Economist, the New York Times, the Washington Post, Psychology Today, Science and other publications. She has a degree in geophysics from the California Institute of Technology.

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