FDA guidance clarifies requirements for reporting drug shortages, building on pandemic-era approach

Life Sciences | By RACHEL COE, MSC

Apr. 05, 2023

Today, FDA published a new draft version of a COVID-19-era final guidance that details when and how sponsors should notify FDA of supply chain disruptions or discontinuances that will impact the domestic availability of certain products. Though many of the recommendations have long been in practice, the draft also provides some long-awaited details on how the Agency expects sponsors to notify FDA about API shortages that are anticipated to impact the downstream availability of finished products.


  • Drug shortages are a serious public health concern that reached a crisis level in the early 2010s. Shortages can lead to dire impacts for patients like treatment delays and denials or medication rationing. Drug shortages are defined within Section 506C(h)(2) as “a period of time when the demand or projected demand for the drug within the United States exceeds the supply of the drug.
  • Under Section 506C of the Federal Food, Drug and Cosmetic (FD&C) Act, manufacturers of certain drugs and biologics are required to report to the FDA on disruptions in manufacturing that could impact a drug’s supply and potentially cause a shortage. Under the law, which was first established in 2012 under the FDA Safety and Innovation Act (FDASIA, Title X, Section 1001), these requirements apply to manufacturers of drugs that are life-supporting, life-sustaining, or are “intended for use in the prevention or treatment of a debilitating disease or condition, including any such drug used in emergency medical care or during surgery or any such drug that is critical to the public health during a public health emergency.” FDA promulgated new regulations in 2015 to inform sponsors on how it would interpret these changes and definitions.
  • The reporting requirements apply to manufacturers of biologic products and pharmaceuticals; there are similar standards applicable for blood products as the supply of these products are generally dependent on donation levels and donor eligibility. Certain products, such as radiopharmaceuticals, are exempt from the reporting requirements.
  • The statutory requirements for reporting were modified under the Coronavirus Aid, Relief, and Economic Security (CARES) Act of 2020, and are now relatively comprehensive. According to the modified statute, manufacturers of drugs or biologics are required to notify the FDA of any “permanent discontinuance” or “an interruption” in either the manufacture of the whole product or its active ingredient (if the latter is “likely to lead to a meaningful disruption in the supply” of the ingredient).
  • In addition, manufacturers must make available to the FDA “the reasons for such discontinuance or interruption.” Additional required information includes the expected duration of the interruption, whether the API or an “associated device” (such as one used to deliver or prepare the drug) is “a reason for, or risk factor in, such discontinuation or interruption,” as well as information about where the API is sourced from and if any “alternative sources” exist for the ingredient.
  • These notifications are supposed to give the FDA enough time to take action to resolve the shortage or notify the public. Companies are required to notify the FDA at least 6 months prior to the date of the discontinuance or interruption, or “as soon as practicable” if 6 months is not feasible. The FDA is then supposed to distribute this information to “appropriate organizations,” such as physicians, health providers and patient organizations. If a company fails to comply with these requirements (§356c(f)), they are subject to what is effectively a public shaming process – but no apparent penalties.

Regulatory Context

  • FDA has slowly sought – and received – additional authority related to drug shortages over time. The CARES Act, for example, expanded manufacturer reporting requirements for drug products that are or could be in shortage to include not just the drugs themselves, but their active pharmaceutical ingredients (APIs) as well. The thought process here was that more granular reporting could assist FDA in more quickly identifying and responding to potential shortages of multiple products that use the same API. Additionally, 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 our explainer on the CARES Act here] Finally, the CARES Act also directed HHS to contract with the National Academies of Sciences, Engineering and Medicine (NASEM) to examine the security of the domestic medical product supply chain. That research would be used to make recommendations to Congress about which measures should be taken to improve security, which could inform future legislation. The report would focus on drugs and devices that are sourced or manufactured outside of the US.
  • Two new drug shortage mitigation authorities were also included among FDA-related provisions in the FY 2023 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.

Now What?

  • Today, FDA released a new draft guidance describing its current expectations for sponsors on the submission of information regarding the permanent discontinuance or temporary disruption in the availability of drugs, biological products, and/or APIs.
  • Although it’s a draft guidance, industry should be somewhat familiar with its content: FDA actually issued a direct-to-final version of this guidance right around the same time the CARES Act was passed back in March 2020, under its umbrella of public health emergency guidances, however the guidance was issued just before APIs were included under Section 506C of the FD&C Act [ Read AgencyIQ’s analysis of this guidance here]. Unlike other guidances or practices that were adapted by FDA during the COVID-19 public health emergency, the Agency’s recommendations on this topic did not change during the course of the pandemic. Rather, the guidance was issued to reenforce its current policy and to strongly encourage sponsors to submit timely information to the Agency, so FDA could more effectively work to prevent or mitigate the shortages of products both related to the treatment of COVID-19 but also related to other products outside of the public health emergency. There weren’t many comments submitted to the draft. Only one trade , the Biotechnology Innovation Organization (BIO) submitted feedback. [Note: Rachel Coe was most recently an employee of BIO.]
  • One change that is immediately evident: FDA has removed the word “permanent” from the title of the new guidance. The guidance explains this change in language by laying out the different circumstances in which stakeholders would need to notify the Agency of a supply chain issue, and which are relevant under the new guidance. In addition to the two circumstances clearly identified following the passage of FDASIA (i.e., a permanent discontinuance in the manufacture of covered products or a manufacturing disruption that is likely to lead to a meaningful disruption a product’s availability), two additional scenarios are introduced in this version of the guidance. Predictably, the third and fourth instances covered are exactly the same as the first two but focus on “APIs for such products” instead of finished products themselves. Interestingly, FDA seems to have removed the word “permanent” from the title as a result of the fourth circumstance since it is possible that a permanent discontinuance of an API could have only a temporary impact on product availability.
  • Overall, the guidance contains few surprises. The requirements are the same in principle and process as what was included in the 2015 rule and 2020 PHE guidance. The most notable difference is the new inclusion of APIs throughout the guidance along with the use of the term “finished products” where the previous guidance stated “covered products” to delineate between the two categories more clearly. It also provides two lists of information that should be considered by sponsors when notifying the Agency of a potential disruption in product supply: the first contains the minimum information a sponsor should submit, while the second includes supplementary details that the Agency recommends sponsors submit, though it notes that this additional information is not technically required.
  • Another voluntary recommendation provided in the new guidance is for sponsors to notify FDA of anticipated product shortages, even in the absence of an interruption in manufacturing. For instance, if there is a “sudden, unexpected spike in demand” FDA states that the submission of such information would provide an “important signal to the Agency about a potential shortage and allow FDA to take appropriate steps to address the potential shortage.” This type of notification would fall outside what is required under the FD&C Act.
  • After sponsors provide the initial notification to FDA of a manufacturing disruption, the new guidance also specifies that they should provide updates approximately every two weeks on the situation, including the “expected timeline for resuming normal operations” even if there are no status updates. The Agency states that this information is important to ensure that FDA can “act on the most current information.”
  • FDA makes it clear that sponsors are still on the hook for notifying FDA about potential issues impacting the availability of products. Regardless of whether there is an issue with API manufacture/availability or whether the manufacturing issue is directly related to the completion of the finished product, the sponsor (i.e., the applicant) is still the one responsible for alerting FDA. As always, sponsors who have questions about this topic should contact FDA.
  • One potentially tricky area that FDA addresses in the guidance is that it previously stated in its 2015 final rule (80 FR at 38920) that an applicant is only responsible for reporting manufacturing interruptions likely to cause a meaningful disruption in its own supply of a finished product. In line with its previous stance, the new guidance states that the notification requirements for covered finished products apply “to each individual sponsor regardless of market share, number of other manufacturers marketing products that are therapeutically equivalent, or the amount of product that may be in distribution.” The Agency also states that even though APIs are now covered under Section 506C, the original statutory language still holds true and applicants are only responsible for estimating the impact of an API on the availability of their own finished products.

What’s Next?

  • One important note is that since API suppliers without FDA applications are not obligated to report to the Agency on potential supply chain disruptions, sponsors will have to carefully monitor their supply chain partners to avoid getting slapped with a noncompliance letter for failure to notify FDA of any potentially anticipated manufacturing interruptions.
  • Ironically, FDA specifically stated that the 506C notification requirements should NOT apply to API products when it was finalizing its regulation on shortage reporting in 2015. In response to a comment submitted on the interim rule about the role API manufacturers play in the overall availability of finished products, the Agency responded, “FDA does not agree that the notification requirement should be applied to API manufacturers. While interruptions in API supply may lead to a meaningful disruption in supply of the finished drug or biological product, they do not always have this effect. Therefore, notification to FDA of disruption in API supply would be premature and would not provide information that the Agency can take definitive action on. FDA believes that the notification requirement, which is derived from section 506C of the FD&C Act, generally provides the Agency with adequate notice to allow the Agency to work with the applicant and other stakeholders to prevent a shortage. As explained in section III.A, however, it is important that the applicant establish a process with any relevant contract manufacturer, API supplier, or other non-applicant entity to ensure that the applicant complies with this rule.”
  • But as the FDA has made clear recently, as much as the CARES Act gave it needed authority, that authority alone is insufficient to stop or prevent drug shotages. In March 2023, FDA asked for new authorities in its Fiscal Year 2024 budget request. [ Read AgencyIQ analysis here] Specifically, 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.
  • AgencyIQ also expects to see drug shortage legislation introduced in the near future. As AgencyIQ has reported previously, the Pandemic and All Hazards Preparedness Act (PAHPA) is due for reauthorization in September 2023, at the end of this federal fiscal year. This is the first reauthorization of the preparedness act since the COVID-19 pandemic. We expect to see a resurgence of life sciences legislation similar to what we saw last year during the legislative UFA reauthorization cycle. During a recent Senate Homeland Security and Governmental Affairs Committee hearing, Committee Chair Senator Gary Peters (D-MI) stated that he is already working on legislation to bestow additional authorities to FDA based on a recent report issued by the Senate Homeland Security and Governmental Affairs Committee’s majority staff.
  • According to that report, 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 emphasized 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.” [ Read the full AgencyIQ analysis of the report along with the committee’s discussion of its findings]

Featuring previous research by Amanda Conti.
To contact the author of this analysis, please email Rachel Coe ( [email protected])
To contact the editor of this analysis, please email Alec Gaffney ([email protected]).

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