Addressing Drug Shortages Through Quality Management Maturity and Supply Chain Reliability Programs

A persistent drug shortage crisis in the United States is associated with higher mortality rates, medication errors, delays in life-saving cancer treatment and other critical medical procedures, as well as significant financial costs to the healthcare system.

The leading cause of drug shortages is low levels of quality management maturity in manufacturing facilities (see Appendix A for definitions of product quality, quality management maturity, and supply chain reliability). Drug payment policies and practices and limited transparency into manufacturers’ supply chains means purchasers choose manufacturers largely based on lowest price, which creates adverse market incentives for manufacturers to keep costs down even at the expense of needed investments in supply chain reliability. The Duke-Margolis white papers, “Advancing Federal Coordination to Address Drug Shortages” and “Supporting Resilient Drug Supply Chains in the United States,” both describe these issues in greater detail.

In 2019, the FDA Drug Shortages Task Force Report noted that “currently, purchasers have only limited information that can be used to assess the state of quality management of any specific facility. . . The lack of information does not enable the market to reward drug manufacturers” for investments in reliability. This need to more effectively and proactively identify reliable manufacturers in an effort to prevent drug shortages has been discussed since at least 2013, when the FDA first issued a request for public comments on a quality metrics program. To solve for this need, the 2019 Task Force recommended creating a rating system that assesses the quality management maturity of manufacturing establishments that can inform purchasing and contracting decisions made by drug purchasers, such as group purchasing organizations (GPOs), pharmacy benefit managers (PBMs), wholesalers/distributors, and health care institutions/providers.

These recommendations led to the rollout of two FDA QMM pilot programs that were completed in 2022, ultimately followed by an FDA request for comment on the QMM program in 2023. This issue brief provides recommendations pursuant to that request for comment.

Read the full policy brief here.