Congress pushes for new FDA authorities to identify and address drug shortages

Life Sciences | By AMANDA CONTI

Mar. 23, 2023

A report issued by the Senate Homeland Security and Governmental Affairs Committee Majority highlights the scale and ongoing nature of the drug shortage crisis in the U.S. But FDA watchers should keep an eye on something else: The potential for the report to act as a blueprint for future legislation.

Regulatory context: FDA’s statutory authorities for drug shortage mitigation

  • Drug shortages are a serious public health concern that reached a crisis level in the early 2010s. FDA reports that in 2005, there were around 61 drug shortages. This number grew to more than 250 by 2011. Shortages can lead to dire impacts for patients like treatment delays and denials or medication rationing.
  • In response, the FDA Safety and Innovation Act (FDASIA) of 2012 provided the FDA with the authority to help mitigate drug shortages. Specifically, FDASIA amended the Federal Food, Drug and Cosmetic (FD&C) Act to require manufacturers of drugs that are life-supporting, life-sustaining or used to treat debilitating diseases or in emergency medical care to notify the FDA of a permanent discontinuation or an interruption that is likely to have a large impact on the supply of a drug. It also allowed the FDA to require the same notifications from manufacturers of biologics. Finally, FDASIA added Section 506C-1 to the FD&C Act, which requires the agency to file annual Reports to Congress on shortages. The most recent report (CY 2021) found 41 new shortages during the year (in addition to ongoing shortages not yet resolved).
  • Under the FDA Reauthorization Act of 2017 (FDARA), FDA gained additional authority intended to help resolve one particular type of shortage: Those affecting generic drugs. Specifically, FDA obtained authority to prioritize generics experiencing shortages. Section 801 of the Act required the agency to “prioritize review of, and act within eight months of submission on, generic drug applications for drugs for which there is a shortage or for which there are not more than three approved products and no blocking patents or exclusivities. To be eligible for priority review, an applicant must submit, at least 60 days in advance of the application, information to the FDA on facilities involved in the manufacturing and testing of the drug. The FDA may expedite inspection of such manufacturing facilities.”
  • Covid-19 created new problems related to shortages. In some cases, regional shutdowns resulted in workers being unable to reach manufacturing plants or products unable to be transported. In other cases, countries limited the export of essential products to ensure the sufficient availability of domestic supplies. In still other cases, extraordinary increases in demand outstripped the ability of companies to make enough of the drugs due to a lack of manufacturing capacity or ability to scale up quickly.
  • The Coronavirus Aid, Relief, and Economic Security Act (CARES Act), passed in March 2020, looked to alleviate some of these problems [ Read our explainer on the CARES Act here.]. The CARES Act allowed FDA to prioritize or expedite reviews for products that could help prevent shortages. It also expanded manufacturer reporting of drug products that are or could be in shortage to include not just the drugs themselves, but the active pharmaceutical ingredient (API). APIs are the raw chemical materials used to make a drug and may be made separately from the finished dose pharmaceutical. Finally, CARES directed manufacturers of life-supporting or -sustaining drugs (or their ingredients) to have a “risk management” or contingency plan in place that can be audited by the FDA. [ Read AgencyIQ’s analysis of that guidance here.]
  • Two new drug shortage mitigation authorities were included among FDA-related provisions in the FY23 government funding measure (collectively known as the Food and Drug Omnibus Reform Act, or FDORA) [ Read AgencyIQ’s analysis here]. First, Section 3616 required FDA to “ensure timely and effective internal coordination and alignment among the field investigators of the FDA and the staff of CDER’s Office of Compliance and Drug Shortage Program.” That coordination is meant to avoid instances in which facility inspectors are recommending or taking actions that could lead to a drug shortage – or at least not without consulting with other agency staff. Second, Sec. 2512 directs FDA to issue or revise guidance on stability testing for product submissions to ensure “the longest feasible expiration date supported by such data” is included in the drug’s labeling. The agency would also need to submit reports to Congress on expiration dates, including “the number of drugs for which the Secretary has requested the manufacturer make a labeling change regarding the expiration date” and whether those drugs were at risk of shortage.
  • Most recently, FDA asked for new authorities in its Fiscal Year 2024 budget request released March 9, 2023. [ Read AgencyIQ analysis here] FDA asked for the ability to require drug manufacturers to notify FDA of an increase in demand that the manufacturer likely will be unable to meet in order to allow to the agency to proactively take steps to prevent or mitigate shortages. The agency also requested strengthening its authority to review policies related to expiration dates, so that the agency can require applicants to “evaluate existing data, submit studies to FDA, and label a product with the longest expiration date (shelf-life) that FDA agrees is scientifically supported. The request also seeks authority for FDA to levy a civil money penalty if an applicant fails to comply.

A new report from the Senate Homeland Security and Governmental Affairs Committee (Majority) details concerns and recommendations to address drug shortages.

  • Building on a 2019 report from Committee Chair Senator Gary Peters (D-MI), the new report highlights ongoing drug shortages despite gains in regulatory authority. Per the document, new drug shortages increased nearly 30 percent between 2021 and 2022, with a five-year record high of 295 active drug shortages at the end of 2022. The report presents metrics underlying “overreliance on foreign and geographically concentrated sources for critical drugs and their key starting materials,” citing exponential growth of Chinese-based API manufacturers and a U.S. Pharmacopeia report that India accounted for most FDA-approved API facilities as of 2021. Together with “limited domestic manufacturing capabilities,” the report says the United States faces “health and national security risks.”
  • At a high-level, the report emphasizes the opacity of the pharmaceutical supply chain. While FDA does collect certain shortage-relevant information from manufacturers, the agency “lacks critical information.” This includes data on increased demand or export restrictions from manufacturers or hospital fill rates from distributors. That said, it seems that FDA may not be fully utilizing the data it currently retains on APIs and other starting materials—the report notes that “FDA acknowledged that it has been unable to use this data to conduct analyses or predictive modeling because the information is “unstructured” and “buried in PDFs within individual drug applications.””
  • The new report presents six recommendations, starting with federal investments in domestic advanced manufacturing capabilities for critical generic drug products that regularly experience shortages. In general, advanced manufacturing practices leverage novel technologies, or take new and novel approaches to established techniques, to improve life sciences product manufacturing. As AgencyIQ has previously discussed, adoption of these techniques has been both slow and challenging. That said, incentivizing advanced manufacturing has been a key priority of FDA, and it recently released a discussion paper on artificial intelligence (AI) in pharmaceutical manufacturing [ Read AgencyIQ analysis here]. However, FDA’s overall progress still has a great deal of room for improvement. A March 10 GAO report found that the agency’s efforts are hindered by absence of formalized performance goals and assessments.
  • Additional recommendations involve increasing the volume, utility, and integration of pharmaceutical supply chain data. Second, the report calls for regular interagency (HHS, DOD, and DHS) medical supply chain risk assessments that account for cybersecurity threats. Third, Congress should require manufacturers of life-supporting and life-sustaining drug products to report increased demand and export restrictions to the FDA (this request was also on the FDA’s wish list in its FY24 budget request). Fourth, FDA should increase the utility of its supply chain data to monitor vulnerabilities and conduct predictive modeling. This will include the development of a key starting material database and documentation of plans to use the aforementioned manufacturer volume data. Fifth, the federal government should coordinate “data sharing between interagency and industry partners through a singular initiative to map the entire pharmaceutical supply chain.”
  • The report’s sixth and final recommendation is that Congress provide the FDA with mandatory recall authority for all drug products – a request more pertinent to the supply chain in general than to drug shortage situations. The report explains that while the agency can recall food products, biological products (e.g., vaccines), medical devices, and controlled substances, it can only recommend that a company voluntarily recall a drug (absent a court order to implement a product seizure). Still, FDA has asked for full-fledged mandatory drug recall authority for many years—a request made by FDA Commissioner Robert Califf in recent Capitol Hill remarks (“We’ve got to have control of the situation”) and also featured in FDA’s FY24 budget request. If granted, this authority would be an unprecedentedly robust tool in the agency’s enforcement capabilities.
  • In a Senate Homeland Security and Governmental Affairs Committee hearing yesterday, the two sides of the aisle struggled to find consensus on the proposed recommendations. Chair Peters outlined his concerns with insufficient visibility into the entire supply chain for critical medications and overreliance on vulnerable sources for drug materials, explaining that, “taken together, these underlying causes not only present serious concerns about providing adequate care to patients, they also represent serious national security threats.” While Ranking Member Rand Paul (R-KY) agreed that the U.S. faces a serious drug shortage problem, he viewed FDA regulation more of a contributor to the problem than a solution. “While many blame the shortages on foreign producers—so called greedy pharmaceutical companies and even hospitals—it’s no coincidence that the rise in drug shortages correlates with the expanded regulatory reach of the FDA,” said Paul.


  • AgencyIQ expects to see drug shortage legislation introduced in the near future. According to his opening statement at yesterday’s hearing, Senator Peters is drafting legislation to bestow the outlined new authorities upon FDA. In addition to potential inclusion in FY24 Appropriations (as FDA requested), the authorities could also find a natural vehicle in the upcoming reauthorization of the Pandemic and All-Hazards Preparedness Act [ Read AgencyIQ analysis of preparations here], which expires at the end of this federal fiscal year (September 2023). That said, the hearing may prove to be an indicator for shaky bipartisan appeal; Senator Paul is the second-ranking Republican on the Senate Health, Education, Labor & Pensions (HELP) Committee – the same committee that would likely markup the bill.
  • Meanwhile, FDA is actively updating existing guidance related to drug shortages to flex current authorities. Today, FDA transmitted a guidance document, “ Notification of a Permanent Discontinuance or Interruption in Manufacturing Under Section 506C of the Food, Drug, and Cosmetic Act,” to the White House’s Office of Information and Regulatory Affairs (OIRA) for review. This relates to FDASIA-codified requirements for manufacturers to notify the FDA of disruptions in their manufacturing capabilities or supplies that could lead to a potential shortage. The document appears to be an updated version of a previous guidance published in March 2020 [ Read AgencyIQ analysis here], which explicitly directed manufacturers to take potential sharp increases in demand for their product into account when determining whether to submit a notification of manufacturing interruption to the agency. Additionally, FDA requested new information from manufacturers in their notifications, including potential remediation techniques and broad explanations of the root cause or underlying reason that led to a notification.
  • What’s next? AgencyIQ will continue to monitor for legislative and guidance developments.

Contains prior research from Alec Gaffney and Laura DiAngelo
To contact the author of this item, please email Amanda Conti.
To contact the editor of this item, please email Alexander Gaffney

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