Advancing Federal Coordination to Address Drug Shortages

A crisis in the drug supply chain is increasingly affecting patients and creating shortages of life-saving and life-sustaining medications in the American health care system. A past shortage of norepinephrine, a drug used to treat septic shock, was estimated to cause hundreds of deaths or more. Alarmingly, some pediatric cancer patients have been forced to delay life-saving care during oncology drug shortages. Providers are left to ration medications that have been the standard of care for years. Staff needlessly dedicate countless hours and dollars to finding treatment alternatives, which may be less effective for patients or unavailable. Every health system, hospital, and patient may be at risk due to this chronic, systemic issue.

This white paper details the root causes of drug shortages in the U.S., highlights new and ongoing federal government efforts to prevent and mitigate drug shortages, and identifies gaps in those efforts. The white paper then proposes the establishment of a new cross-cutting Prevent Drug Shortages (PDS) Initiative to coordinate and expand upon the federal government’s approach to address drug shortages.

The leading cause of drug shortages is manufacturing quality issues (see Appendix A for working definitions of product quality, quality management maturity, and supply chain reliability, along with potential next steps to improve quality management maturity and supply chain reliability). Drug payment policies 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. These issues are particularly challenging for generic manufacturers, which often operate on slim profit margins compared to branded manufacturers and have limited incentives to invest in their supply chains. Intense competitive pressure for low prices in generic drugs also contributes to significant offshoring of manufacturing to countries where the cost of production may be lower.

A wide range of governmental and non-governmental efforts aim to mitigate or prevent drug shortages. The U.S. Food and Drug Administration (FDA), Administration for Strategic Preparedness and Response (ASPR), White House Office of Science and Technology Policy (OSTP), Department of Defense (DOD), and Department of Commerce (DOC) all oversee various offices or programs intended to address drug shortages from various angles--supporting innovative manufacturing methods, stockpiling certain medicines, promoting onshoring of manufacturing, and more. Nongovernmental organizations also have undertaken productive efforts to improve manufacturing processes, reshape contracting practices, and introduce more transparency into drug supply chains.

While these various efforts are commendable and have attempted to reduce the frequency and severity of drug shortages, significant strategic and tactical gaps persist that should be filled by new efforts, and further strategic planning and coordination could increase the impact of existing programs and initiatives. The numerous relevant federal government strategies and plans issued rarely incorporate Specific, Measurable, Achievable, Relevant, and Timebound (SMART) goals or identify accountable government entities with the authorities, funding, and expertise needed to accomplish such goals..

Read the full white paper