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Production Problems, FDA Enforcement Help Explain Drug Shortages

Michael Tomsic

This week we're reporting on a serious problem in health care. Hospitals are almost running out of a wide variety of critical drugs, including chemotherapy treatments, anesthetics, and even basic vitamins. There are hundreds of shortages, and hospital pharmacists and doctors say that's making it more difficult to care for patients.

In the first story of our series Critical Supply, WFAE's Michael Tomsic reported on the danger that drug shortages pose. In this second story, he explains the causes of the problem.

In an office park near the airport, Carolinas HealthCare System has a central pharmacy where it manages drug shortages for its nine hospitals in the Charlotte area. In that pharmacy, it's easy to see how drug shortages are growing.

"When we designed this space, we knew we'd have a role in drug shortages," said Pharmacy Director Kevin Isaacs. "But we never thought it would be this large."

Isaacs is surrounded by boxes of drugs. This is one of the ways hospitals manage shortages – they stock up. 

"The drugs used to take up the back corner and one shelf in the middle," he said with a slight chuckle. "That was about eight months ago. Since that time, as more and more drugs have gone on backorder, it has begun to grow out this way."

He waves his hand across the room at stacks taller than he is. "Mount Backorder," he calls it.

That's a hedge against what's happening at the other end of the supply chain: more and more manufacturing lines are just sitting still.

Few Manufacturers, Many Problems

David Gaugh is a vice president of the association representing major drug manufacturers.

"The cause of the drug shortages right now is that 30 percent, roughly, of the approved, available facility production lines is currently offline," Gaugh said. "You take 30 percent of that offline, there's just no way to catch up with some of these products."

There are a couple issues at play here. One, we're talking about generic drugs with slim profit margins, so you have to manufacture a massive amount of them to make money. Only a handful of companies have that production capacity, with names like Hospira, Bedford, Teva, Sandoz and APP.

"Those four or five are the ones that manufacture the majority of the products, and they're also the ones that are currently under quality compliance scrutiny by the FDA," Gaugh said.

The FDA is finding a lot more manufacturing lines just aren't good enough. Ilisa Bernstein makes no apologies. She's the FDA deputy director of compliance.

"Preventing drug shortages is a top priority for us, but ensuring that drug products are safe and high quality is also a top priority," she said.

The shutdowns can last for several months, sometimes more than a year.

Congress Acts, But Shortages Increase

In response to the worsening shortages last year, Congress passed a law requiring manufacturers to give six months' notice before halting a line.

"That allows us to work with other manufacturers to try to ramp up production or to work with that manufacturer to try to get through their problem quickly," Bernstein said.

But the number of shortages keeps growing. In fact, it reached a record high last year according to the American Society of Health-System Pharmacists.

Back at Carolinas HealthCare System, Kevin Isaacs said the new law doesn't do much for hospitals.

"It's nice to know that I'm going to have this crisis," he said. "But I need something to get around the crisis," like other manufacturers making up for the lost production. But since there are so few of them, that often doesn't happen.

Hospitals Turn To Compounding Pharmacies

Credit Michael Tomsic
Medi-Fare Drug Center in Blacksburg, S.C., has a front end that resembles most drug stores.

As a last resort, many hospitals go to compounding pharmacies.

About 45 miles southwest of Charlotte, a compounder in Blacksburg, South Carolina has supplied about two dozen hospitals in the Carolinas for years.

"This is Medi-Fare Drug Center," Owner Pat Stephens said. "And we have a traditional retail pharmacy where we have the front end with our medicines and our over-the-counter products."

It looks like your average mom-and-pop drug store, and that's how many compounders get started – they just mix medicines for local patients. 

Credit Michael Tomsic
Behind a locked door, Medi-Fare has a state-of-the-art compounding facility.

But when Stephens types in a code, and opens a side door, you see what some compounders have become: state-of-the-art facilities that mix a large volume of drugs.

"My job is not to recreate something that's already available," she said. "If a manufacturer can make it, they will make it. That's their purpose. If they cannot, then our job is to fill in on the shortages or the backorders to help fill that void."

Meningitis Outbreak Leads To Increased Scrutiny

But there's a problem with going to compounders, too. Medi-Fare and others have come under a lot more scrutiny from the FDA. That's because of the deadly meningitis outbreak that started last fall with tainted injections from New England Compounding Center.

When FDA inspectors came to Medi-Fare in December, they found violations that baffled Stephens.

"We were looked at by the FDA for manufacturing," she said. "We contended that we were not manufacturers, that we are indeed compounders."

In a warning letter that followed, the FDA said, "Based on this inspection, it appears that you are producing drugs that do not fall within the exemptions for compounded drugs." That's partly because Medi-Fare doesn't have an individual prescription for each drug it makes.

That rule goes back to what compounders used to be: mom-and-pop pharmacies. Now that they're mixing larger volumes of drugs, the FDA is starting to apply manufacturers' standards to them.

Hospitals May 'Go Without'

That's frustrating to some hospital pharmacists who've relied on Medi-Fare for years without problems. Cheryl Schmiedel manages shortages for Carolinas HealthCare System.

"Even though it's a very small number of drugs in the big picture, a lot of these things we can't get anywhere else," Schmiedel said. "So if there is nobody to compound it in the interim, then you have to go without."

Medi-Fare hasn't compounded in more than three months. It's working to meet FDA standards.

In the meantime, about two dozen hospitals in the Carolinas have had to find another last resort for drug shortages.