[Ip-health] NYT: Obama Tries to Speed Response to Shortages in Vital Medicines

Krista Cox krista.cox at keionline.org
Mon Oct 31 06:26:08 PDT 2011


Obama Tries to Speed Response to Shortages in Vital Medicines

WASHINGTON — President Obama will issue an executive order on Monday that
the administration hopes will help resolve a growing number of critical
shortages of vital medicines used to treat life-threatening illnesses,
among them several forms of cancer and bacterial infections.

The order offers drug manufacturers and wholesalers both a helping hand and
a gloved fist in efforts to prevent or resolve shortages that have worsened
greatly in recent years, endangering thousands of lives.

It instructs the F.D.A. to do three things: broaden reporting of potential
shortages of certain prescription drugs; speed reviews of applications to
begin or alter production of these drugs; and provide more information to
the Justice Department about possible instances of collusion or price

Such efforts are included in proposed legislation that has been pending in
Congress since February despite bipartisan support for its provisions.

The order, the first since 1985 by a president to affect the functions of
the Food and Drug Administration, is part of a series of recent executive
orders involving such disparate issues as mortgage relief and jobs for
veterans. They are intended to show that the president, plagued by low
approval ratings, is working to resolve the nation’s problems despite a
Congress largely paralyzed by partisan disagreements.

“The president’s action is a recognition of the fact that this is a serious
problem, and we can and should do more to help solve it,” said an
administration official who asked to remain anonymous to avoid upstaging
the official announcement on Monday. “We can’t wait anymore.”

So far this year, at least 180 drugs that are crucial for treating
childhood leukemia, breast and colon cancer, infections and other diseases
have been declared in short supply — a record number. Prices for some have
risen as much as eightyfold, and clinical trials for some experimental
cures have been delayed because the studies must also offer older medicines
that cannot be reliably provided.

Patients with entirely curable diseases have been forced to take medicines
that may not be as effective, adding anxiety to an already terrible ordeal.

The president’s order is a modest effort that, while possibly helpful, is
unlikely to resolve the problem soon or entirely. Administration officials
characterized it as one step in a long and complicated effort. Indeed, Mr.
Obama eschewed more ambitious proposals — like government drug stockpiling
or manufacturing — that would have injected the government more directly
into the nation’s drug market and cost more but that might have been more

Still, Mr. Obama’s order and others he has issued recently reflect his
belief in the power of government to improve people’s lives. By contrast,
top Republican legislators and presidential candidates have almost
uniformly argued that resolving the nation’s economic and other problems
depends mostly on scaling back or ending government regulations to allow
the free market to function more effectively. No regulatory agency touches
people’s lives more thoroughly than the F.D.A., which regulates 25 cents of
every dollar spent by consumers.

Along with Mr. Obama’s order, on Monday the administration will release two
government reports that mostly blame a dysfunctional marketplace for drug
shortages, directly contradicting assertions by some commentators that
government rules are to blame. The analyses found that 74 percent of the
medicines in short supply in 2010 were sterile injectibles, the kind of
drugs delivered in hospitals or clinics to treat cancer or anesthetize
patients before surgery.

The economic and technical hurdles to participating in this market have
made it exceedingly inflexible, the analyses found. Just five large
hospital buying groups purchase nearly 90 percent of the needed medicines,
and only seven companies manufacture the vast majority of supply. In most
cases, one company produces at least 90 percent of a drug’s supply, and
crucial ingredients — many of them made in mammoth plants in India and
China — are often difficult to find, verify and approve, so years are
needed to create new capacity. While demand has grown steadily in recent
years, supply capacity has remained largely unchanged.

With so much supply dependent on so few companies and facilities, safety
problems that arise anywhere in the system can result in enormous
disruptions. Nearly half of the shortages followed inspections that found
serious quality problems, including injectibles that had glass shards,
metal filings and bacterial and fungal contamination, the reports found.

Even the generic drug industry is calling for more regulation. The industry
recently agreed to provide the F.D.A. with nearly $300 million annually to
bolster inspections and speed drug applications. That amounts to about 1
percent of the industry’s revenues and about 5 percent of its profits in
the United States, an extraordinary vote of confidence in the government’s
ability to improve the situation.

This money and an industry campaign to build more capacity may eventually
resolve much of the supply disruptions. In the meantime, Mr. Obama will
promise Monday to strengthen the staff of the drug agency’s shortages team
to deal with what are expected to be far more and detailed communications
with manufacturers about events that could affect drug supplies, officials

The administration will also send letters to manufacturers reminding them
of their legal responsibility to report pending supply disruptions of
certain drugs and to encourage them to notify the drug agency of events
that could possibly lead to disruptions even when not required to do so.

The rules needed to expand required notifications will take time to
finalize, but the president’s order will speed that process, administration
officials said. The president will also announce his support of legislation
proposed in both the House and Senate to expand even further reporting
requirements from manufacturers.

Mr. Obama’s order that the F.D.A. report to the Justice Department possible
instances of price gouging or collusion is largely directed at the shadowy
and fading world of small wholesalers that buy drugs from one set of users
and in times of shortage sell them at huge markups to another. In one case,
a leukemia drug that normally sold for $12 per vial was being sold for $990
per vial — 80 times higher. A survey found that small wholesalers typically
increased prices by 650 percent during shortages.

Krista Cox
Staff Attorney
Knowledge Ecology International
(202) 332-2670

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