Virus Heightens Importance Of Drug Shortage Reports To FDA

By Chad Landmon and Nisan Zaghi
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Law360 (April 2, 2020, 3:11 PM EDT) --
Chad Landmon
Chad Landmon
Nisan Zaghi
Nisan Zaghi
As pharmaceutical companies rush to meet the challenges posed by COVID-19, supply chain disruptions pose a growing threat to the availability of many products that are necessary to maintain and improve the health of patients across the U.S. and around the world.

Not only are we experiencing a disruption of the manufacturing and delivery of key ingredients and products from areas that have been hard-hit by the coronavirus, such as China, but we are also seeing increased demand for products being used for patients fighting COVID‑19 and in clinical studies.

With all of the activity aimed at overcoming these supply disruptions, it is important that companies remain mindful of their reporting obligations to the U.S. Food and Drug Administration if a meaningful disruption is likely to occur for a marketed drug product. With the adoption of the Food and Drug Administration Safety and Innovation Act, Congress directed companies to report such likely disruptions in advance in order to allow the FDA to work with industry and the public to mitigate any disruptions and prioritize getting supply from other sources.

Given the extreme pressure that the COVID-19 outbreak is putting on drug supply chains, Congress just passed the Coronavirus Aid, Relief and Economic Security Act on March 27, which, among other things, requires (1) the reporting of expected shortages not only for finished drug products but also for active pharmaceutical ingredients, or APIs, and (2) the establishment of risk management plans by pharmaceutical companies.

Given the current crisis and the urgent need to get ahead of any potential drug shortages, it is more important than ever that drug companies anticipate and comply with their drug shortage reporting requirements to the FDA.

FDASIA

Congress passed FDASIA in order to make enhancements to the approval process for drugs, biologics and medical devices, including implementing various proposals regarding user fees, providing new incentives for product development, and establishing more oversight over the drug supply chain.

As part of the overall improvement efforts, FDASIA also implemented requirements for drug companies to report anticipated drug shortages to the FDA and required the creation of a task force by the FDA to implement a plan to both track and address drug shortages.

In general, FDASIA requires that drug manufacturers provide notice to the FDA "of a permanent discontinuance in the manufacture of the drug or an interruption of the manufacture of the drug that is likely to lead to a meaningful disruption in the supply of that drug in the United States, and the reasons for such discontinuance or interruption."[1] Companies are required to provide the notice six months before the discontinuance or interruption or "as soon as practicable."[2]

Although the statute does not provide any strict penalties for noncompliance, FDASIA did put into place a public shaming system. Specifically, if the FDA determines that a company has failed to comply with its reporting requirements, the FDA will send a letter to the company, providing the company with 30 days to explain why notice was not sent to provide the required information about the likely interruption.[3]

If the FDA determines that there was not a reasonable basis for the company to have failed to comply with the reporting obligation, then the FDA will publish its letter and the company's response to the FDA's website, alerting the public. The FDA has proven that this is not an empty threat — the FDA has a dedicated website page[4] where it posts such letters.

FDASIA also provided the FDA with some tools to mitigate the impact of any anticipated drug shortage. For example, the FDA can expedite the review of a supplement to a new drug application or an abbreviated new drug application for a generic product. The FDA can also expedite an inspection or reinspection of a facility in order to mitigate or prevent a shortage.[5]

At times, the FDA may work with companies to help address manufacturing or quality issues, and the FDA can reach out to other manufacturers who may be able to redirect supplies of the needed products to the U.S. When the disruption is being caused earlier in the supply chain, the FDA can work to expedite review of suppliers in order to mitigate the disruption.

The CARES Act

Amid the backdrop of soaring cases of COVID-19 in the country, Congress passed the CARES Act on an emergency basis on March 27. The massive bill provides $2 trillion in new expenditures to take on the novel coronavirus, provide relief to states and local governments, and provide economic relief. In addition to these important provisions, the CARES Act also amends the drug shortage reporting requirements of FDASIA in three significant ways.

First, the CARES Act adds a requirement that expected shortages of APIs also be reported to the FDA. This change was implemented given the realization that many APIs that make their way into finished drug products in the U.S. are manufactured in regions that have been hard-hit by COVID-19, including China.

Given that finished drug products cannot be made without APIs, Congress wanted to ensure that the FDA was notified in advance when these key ingredients were unavailable even before any impact on the manufacturing of finished drug products.

Second, the CARES Act requires all drug or API manufacturers to create and maintain risk management plans to mitigate or prevent drug supply interruptions. These plans are required to identify the risks in the supply chain and implement policies to avoid such risks. Although the FDA is certainly going to provide more guidance as to what is required in these plans, companies should either dust off the plans they already have in place or move rapidly to develop and implement such plans.

Finally, the CARES Act enumerates three topics a manufacturer must include when it provides notice of a discontinuance or interruption of a product.

First, the manufacturer must provide the reason(s) for the discontinuation or interruption. If the manufacturer anticipates a discontinuation or interruption of API, it must also disclose the source of the API and all alternative sources of the API known to the manufacturer.

Second, the manufacturer must disclose whether any associated device is the reason for the discontinuation or interruption.

And finally, the manufacturer must disclose the expected duration of the interruption. The bill also requires manufacturers to provide any additional information requested by the FDA.    

Reporting Drug Shortages Amid COVID-19

Significant disruptions are wreaking havoc on the entire drug supply chain, including the manufacturing and delivery of raw components, active and inactive ingredients, and even finished dosage forms. And, given the worldwide impact of the novel coronavirus, the industry will continue to face increased demand and increased scrutiny, both from the government and the public, if shortages occur. Thankfully, we have witnessed many companies coming forward to increase or restart production of many much-needed medical products.

The FDA has been using all of its communication tools with industry to reiterate the need to comply with the drug shortage reporting requirements, and Congress has even weighed in with the CARES Act. It is imperative that drug companies have staff and plans in place to monitor and promptly notify the FDA of any potential shortages so that the FDA can make adjustments and use the tools provided by Congress to ensure that drug supplies continue to be available.



Chad Landmon is a partner at Axinn Veltrop & Harkrider LLP, and chair of the firm's FDA and intellectual property practice groups. 

Nisan Zaghi is an associate at the firm.

The opinions expressed are those of the author(s) and do not necessarily reflect the views of the firm, its clients or Portfolio Media Inc., or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.


[1] 21 U.S.C. § 356C(a).

[2] 21 U.S.C. § 356C(b).

[3] 21 U.S.C. § 356C(f).

[4] www.fda.gov/drugs/drug-shortages/drug-shortages-non-compliance-notification-requirement.

[5] 21 U.S.C. § 356C(g).

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