When FDA Inspections Backfire
According to data compiled by the University of Utah’s Drug Information Service, there were 265 drugs in short supply as of this year — down from a high of 456 in 2012, but still 74 percent above the total in 2010. These shortages include all forms of drugs, including antibiotics, but also sterile injectables, such as those used in chemotherapy treatment and anesthesia. Even by the more conservative tally of the Food and Drug Administration, there were 44 drug shortages last year.
In the University of Utah data, 25 percent of shortages last year were attributed to manufacturing problems, and another 47 percent were classified under the mysterious category of “unknown.” The FDA has emphatically argued that it has not increased its manufacturing-quality standards and does not expect pharmaceutical manufacturers to halt production of a drug after the agency identifies quality or contamination problems. But the agency has, over the last few years, increased its inspections of manufacturing facilities, especially facilities producing sterile injectables.
The FDA wants to work with companies to keep necessary pharmaceuticals in production, but it does not have the legal authority to require a pharmaceutical manufacturer to continue production of drug that the agency has cited for quality or contamination regulatory violations. Thus, when pharmaceutical manufacturer Sanofi was cited by FDA inspectors for mold contamination of BCG, a bladder-cancer drug, at its manufacturing facility in Toronto in April 2012, executives soon suspended production of BCG to renovate the facility. Even after consulting with FDA officials, Sanofi executives decided that accepting FDA fines and regulatory oversight while continuing to manufacture a product that could be contaminated was not worth it.
Sanofi executives may have had strongly held ethical concerns about manufacturing a contaminated product; been worried about harming the company’s reputation as a consistent, high-quality manufacturer of pharmaceuticals; or been keenly aware of the firm’s legal and financial liability. Perhaps, even though the company's decision created an acute shortages of BCG, Sanofi's decision was an exercise of corporate social responsibility.
But the shortage could also be a result of the FDA’s regulatory vigilance in inspecting the safety and quality of foreign manufacturing operations, especially with increased inspections of generic manufacturers in China and India. These efforts may improve the quality and safety of drugs, but there may be few (or no) manufacturers able to step in when an original manufacturer decides to cease production due to failed inspections.
As a result, supplies of in-demand pharmaceuticals decline — at least in the short run. In many cases, less effective substitute pharmaceuticals are employed to treat a patient’s malady; in other cases, such as with BCG, a drug's unavailability could eventually result in a patient’s bladder having to be surgically removed.
Unfortunately, improvements in FDA regulatory effectiveness have, in some instances, resulted in the unintended consequence of exacerbating drug shortages.
Thomas A. Hemphill is a professor of strategy, innovation, and public policy in the University of Michigan-Flint School of Management and a senior fellow with the National Center for Policy Analysis.