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Drug Shortages in America: Separating Fact from Fiction Walter Geba, MS, PharmD Senior Vice President, Chief Pharmacy Officer Innovatix, LLC 7/17/2015 1 Outline • • • • Drug Shortages Compounding Pharmacies The Gray Market Counterfeit Prescription Drugs 2 DRUG SHORTAGES 7/17/2015 3 7/17/2015 4 7/17/2015 5 National Drug Shortages by Year 2001 - 2012 7/17/2015 6 Drug Shortages by Route of Administration 2010-2011 7 Dynamics of Sterile Injectable Drug Shortages 8 Reasons for Drug Shortages 5% 4% 4% Product quality issues 9% 42% Production capacity Product discontinuation 18% Unavailability of raw materials Loss of manufacturing site Other drug shortages 18% Unavailability of other components Source: FDA Drug Shortages Program, Jan thru Oct 2010 Note: Information not reported as drug-specific © Copyright 2011, Cardinal Health, Inc. or one of its subsidiaries. All rights reserved. 9 The FDA can..... 7/17/2015 10 The FDA is not Able to Require… 7/17/2015 11 FDA’s Focus 7/17/2015 12 Regulatory Factors Contributing to Shortages FDA Regulatory Actions: • FDA heightened safety concerns caused increased scrutiny in the wake of the Chinese adulterated heparin scandal of 2007 • Other GMP violations such as…metal shavings in vials, precipitates and microbial contamination have caused recalls/shortages • Since Dr. Hamburg has taken over at FDA, it has issued 900 warning letters in 2011 compared to <400 in 2008 • > 50% of 2011 shortages were due to enforcement actions 13 Economic Factors Contributing to Shortages Aging U.S. Manufacturing Infrastructure: • Many plants are 40+ years old • Difficult and expensive to maintain • Leads to production interruptions and diminished capacity • Economic choices are made where older, less profitable drugs are eliminated as new generics come to market • By year-end 2012, we will see $34B in new generics 14 Supply Chain Factors Contributing to Shortages • Three Pharmaceutical Wholesalers control >95% U.S. distribution • Just-in-time (JIT) inventory efficiencies adopted by the entire supply chain • Leaves very little inventory buffer for supply interruptions (Average DSI 50→25 since 2004) • Major contributor to intermittent drug shortages and source of provider frustration 15 Global Factors Contributing to Shortages Global Raw Material (API) Market • U.S. competes with Europe, S.A. and Asia • World-wide demand is up • China now second largest market at $50B. • Will grow between 17% – 25% annually • U.S. market share as % of the world total has decreased steadily…3% - 5% annual growth 16 US Rx Sales as a Percent of Global Rx Sales 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 28% 240B 43% 42% 42% 2005 37% 37% 53% 560B 2004 40% 308B 2006 2007 36% 856B 2008 2009 2010 17 Reimbursement Factors Contributing to Drug Shortages 18 FDA Effects on Shortages via Approvals • Lack of sufficient resources has slowed the approval process significantly • Currently there are approximately 3,000 ANDAs awaiting approval • Congress sought to remedy the situation through PDUFA re-authorization in September 2012, whereby generic manufacturers now will pay user fees when they file ANDA applications (retro to pending ANDAs too) • FDA has committed to reducing the backlog by half in five years while keeping current with new ANDA applications 19 ANDA’s Received 1000 880 900 766 800 793 820 859 814 853 700 563 600 500 449 400 307 330 345 296 335 361 307 300 200 100 0 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 ANDA's Received Confidential - Page 20 Approvals 600 494 500 474 489 426 400 361 360 2005 2006 457 320 296 284 2002 2003 300 241 202 200 100 0 2000 2001 2004 2007 2008 2009 2010 2011 Approvals Confidential - Page 21 ANDA Approvals & Median Time 35 600 30 30 474 489 500 26.7 25 23 Months 361 19.3 20 18 15 10 18.6 18.9 18.4 296 273 212 18.3 232 225 360 16.3 16.3 457 426 400 18.9 320 17.3 21.6 30.7 16.6 300 284 241 Approvals 494 200 186 100 5 0 0 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Years Median times, approvals Approvals Confidential - Page 22 And GPO’s are not to blame. …WORD! 23 COMPOUNDING PHARMACIES 7/17/2015 24 Are Compounding Pharmacies the Answer? 7/17/2015 25 THE GREY MARKET 7/17/2015 26 Gray Market 7/17/2015 27 Picture of the Gray Market 7/17/2015 28 Physician Greed 7/17/2015 29 The FDA Names Names 7/17/2015 30 COUNTERFEIT DRUGS 7/17/2015 31 7/17/2015 32 U.S. Drug Distribution System • Reputation Safest in the World • Federal Food, Drug and Cosmetic Act Overseen by the FDA ♦ FDA Approval Process Prohibits interstate Importation shipping • Closed System FDA Counterfeit Problem • Case Count 1997 Six cases 1998 Four cases 1999 Six Cases 2000 Six Cases 2001 20 cases 2002 22 cases • Recent Counterfeits 2002 ♦ Epogen/Procrit ♦ Zyprexa/Serostim ♦ Diflucan 2003 ♦ Procrit ♦ Lipitor/Viagra • Recently the FDA ordered three medicines from “Canada” • When they arrived one thing was clear….. • Where did the medicines come from? • What exactly is in them? • Getting medicines from Canada isn’t the answer, but it does raise a lot of questions. • • • SOURCES-US Senate Drug Importation Hearings: Health, Education, Labor & Pensions Committee May 20th, 2004 & Judiciary Committee July 14th , 2004 US Food and Drug Administration: FDA Tests Results of Prescription Drugs from Bogus Canadian Website Show All Products Are Fake or Substandard July 13th 2004. Defining Counterfeits • • • • • • • No active ingredients Incorrect amount of active ingredients Wrong ingredients High levels of impurities Expired products Stored at wrong temperature Stored under unsafe conditions Dangers of Illegal Drug Importation • • • • Counterfeit Allergic reactions Improper medical supervision Consumer Protection Laws HIPAA • Safety and Liability • Potential Venue Organized crime/terrorism FDA Importation Policy for Personal Use • • • • • • Patient with serious medical condition Under Direct Physician Supervision Drug unapproved in the USA Maximum 3 month supply Effective treatment NOT available domestically Drug NOT available in the USA Importation By the Numbers • If all USA residents bought their rx drugs from Canada that nation’s supply would be exhausted in 38 days. • If just ½ of the elderly in the USA were to buy drugs from Canada, it would have to boost its drug supply by 2.5 times. Did you know……. • Canada doubled the value of its drug imports since 1999 from 2.4 billion to 4.7 billion last year. In 2003, 44% of those drugs came from the USA. The rest came from over 80 countries, including Ireland, Italy, Mexico, India, Cuba, Colombia and Guyana. Did you know….. • Health Canada will not guarantee the safety of medicines shipped outside its borders, and the FDA does not have the fiscal wherewithal to manage Canadian imports. • A Prudential Financial report disclosed Canada initially purchases from Bulgaria, Singapore, Argentina, South Africa and Pakistan. Effective and Timely Change? • “What drives patients to illegally import drugs from countries where they are afraid to drink the water, but not afraid to put their lives in the hands of unregulated drug distributors?” • “If the importation of drugs from Canada is unsafe, then show us the bodies!” Anti Drug Counterfeit Strategy • • • • FDA Actions Manufacturers Distribution System RFID Technology Digital Electronic Pedigree • Counterfeit Alert Network NABP Consumer Complaints • Consumer Fraud Delayed/no delivery • • • • Bait & Switch Incorrect Charges $ No/invalid prescription Foreign Language Label • Drug switching/wrong product • Duplicate therapy • Appear to be in Canada, based elsewhere Suspect Counterfeit Drugs • Voluntary Reporting • FDA MedWatch 1-800-332-1088 www.fda.gov/medwatch/safety • Contact Manufacturer • Nation Boards of Pharmacy www.nabp.org Caveat Emptor Final Thoughts • Prepare for greater scrutiny of pharmaceutical supply chain costs and profits. • Manufacturers: Educate providers about your authorized channel. • Providers: Teach safe sourcing throughout your organizations. • Support strategies that increase incentives for generic injectable manufacturing. 7/17/2015 51