February 27, 2020 at 5:00 am ET
For the past two decades, policymakers, health care providers and pharmaceutical manufacturers have been grappling with the issue of drug shortages — a problem that significantly impacts delivery of quality health care to patients in the United States.
According to the Food and Drug Administration’s 2019 Drug Shortages report, the majority of shortages across our nation fall under the category of sterile injectables. These medicines are often lifesaving and the cornerstone of critical care in hospitals and other settings.
Drug shortages pose a significant health risk as they can lead to a delay or even a denial of needed care for patients. In 2018, a bipartisan group from both chambers of Congress asked the FDA to launch a drug shortages task force. The task force is charged with engaging stakeholders to find long-term solutions to address the recurrent systemic causes behind the increase in the number of drug shortages in recent years.
Working together across the public and private sectors, the mutual goal is to eliminate these unmitigated vulnerabilities and ensure that health care providers and patients have a consistent and reliable supply of these critical therapies.
Of course, a complex problem will require a comprehensive set of solutions. Sterile injectables shortages are driven by a confluence of manufacturing and regulatory complications coupled with an unsustainable commercial model. The current system creates a “race to the bottom” by commoditizing these often life-saving medicines, driving the prices of these critical medicines too low to nurture a sustainable competitive market that would encourage manufacturers to sufficiently reinvest and build excess capacity.
While most of these relatively inexpensive drugs are generic, manufacturing sterile injectables requires complex processes, highly sophisticated equipment and facilities, and significant long-term investment. But when you contrast that investment with the fact that two-thirds of generic sterile injectable medicines we bring to market annually cost less than a cup of coffee, it places the challenge of market sustainability into perspective. Clearly, the pricing of these products does not reflect their true value to the public health.
Meanwhile, it can be challenging for manufacturers to make investment decisions for the future due to marketplace difficulties. Already, several manufacturers have exited production of sterile injectables or closed entire facilities due to the uncertainty of being able to recover investment costs under the current commercial model.
The result of these departures is the arrival of increasing shortages leaving the remaining suppliers to make up for the shortfall. Despite these challenges, our company remains committed to the sterile injectables market and the patients we serve.
While multiple aspects of the commercial model render it unsustainable and make it challenging for manufacturers to make adequate investments, there are two which cut to the core of the problem.
First, the current reimbursement model forces hospitals to principally seek out the lowest-priced products possible. This incentivizes a race to the bottom for generic injectable medicines, which leads to a lack of certainty in the market that makes it difficult for manufacturers to make long-term investments and results in a negative impact on continuity of the drug supply.
Second is a contracting model that does not provide the level of certainty for price and volume commitments necessary to support the large investments required for sustainable operations, as it typically rewards only the lowest price, regardless of quality or sustainability. A re-examination and reformulation of the contracting model is necessary to reduce the factors that lead to market uncertainty. In its place, we must build a system that ensures both pricing and volume predictability and enables current and prospective manufacturers to deploy capital for new capacity and investments in modernization.
Additionally, congressional action to codify and expand the FDA’s existing Emerging Technology program will help to facilitate the creation of advanced manufacturing technologies or upgrades to existing technologies to address drug shortage challenges and promote modern, reliable manufacturing strategies.
Finally, a holistic public health approach for regulatory and compliance activities that balances a benefit/risk framework should be utilized on a case-by-case basis. “Regulatory flexibility and discretion,” as noted in the FDA’s report on drug shortages from 2018, can both ensure patient safety and access while preventing a shortage situation.
Despite these and other challenges, drug shortages can be successfully addressed through market-driven, private-sector solutions in close collaboration with our partners on Capitol Hill and in the Department of Health and Human Services, including the FDA and the Centers for Medicare and Medicaid Services. Because no single stakeholder can completely solve these complex issues alone, there ought to be ongoing collaboration between the public and private sectors to achieve much-needed sustainable solutions to ensure that patients have access to an uninterrupted supply of life-saving sterile injectable medicines.
Robert Popovian is vice president of U.S. government relations at Pfizer, and Navin Katyal is general manager of the Pfizer U.S. Hospital Business unit.
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