US FDA report finds economic forces at the root of generic antibiotic shortages

Posted on 12/11/2019 by Generics subsector of AMR Industry Alliance

Generic antibiotics underpin recommended prescribing guidance for most infections, accounting for between 80% and 90% of prescriptions in primary healthcare worldwide. However, increasing costs and inadequate incentives for quality-assured manufacturers is feeding through into shortages of these essential medicines for patients, according to a wide-ranging investigation into the root causes of drug shortages by the US inter-agency Drug Shortage Task Force, led by the US Food and Drug Administration.

The report, commissioned in response to a request from 31 US senators and 104 US congressional representatives, lays the blame for drug shortages on several key economic root causes, including a dearth of incentives for manufacturers to produce less profitable drugs, a failure to reward manufacturers for mature manufacturing and supply chain management, and a challenging logistical and regulatory landscape in which to solve supply disruptions.

The FDA study looked at shortages across all drug classes between 2013 and 2017, but the scale of the problem is arguably greatest in the generic antibiotic sector. In 2015, a study in Clinical Infection Diseases reported that 148 antibacterial drugs were classed as “on shortage” in the US between 2001 and 2013. The authors also found that there has been a dramatic rise in shortages since 2007 – a finding echoed in the FDA study. And the problem is global. Shortly after the publication of the Clinical Infectious Disease study in 2015, the Medicines Evaluation Board of the Netherlands raised the alarm about a complete stock-out of three vital penicillins, warning that “as these penicillins are no longer available, doctors will start using broad-spectrum antibiotics. This contradicts the aim of counter-acting resistance against antibiotics.”

When market conditions limit manufacturers’ profitability, they reduce a firm’s motivation to maintain a presence in, or enter the market for older prescription drugs, and to invest in manufacturing quality and redundant capacity. Manufacturers of older generic drugs, in particular, face intense price competition, uncertain revenue streams, and high investment requirements, all of which limit potential returns. Current contracting practices contribute to a “race to the bottom” in pricing.

The absence of incentives via the procurement process for manufacturers to maintain robust quality-management systems compounds these issues. Generic manufacturers are also expected to meet new environmental standards, such as the AMR Industry Alliance Framework and predicted no effect concentrations to minimize the potential risk of antimicrobial resistance developing as a result of antibiotic manufacturing emissions. However, current procurement practices attach no value to the attainment of such standards.