Shortages of drugs and biologics in the U.S. have been the subject of multiple congressional hearings recently. Economists teach that shortages are generally self-correcting because excess demand typically drives up prices, boosting incentives to increase production. But the number, persistence and scope of shortages for FDA-regulated pharmaceuticals indicate that the usual private and government mechanisms to resolve these vexing problems are not working.
Congress should step in to demand FDA do more to explain its actions to avoid and mitigate shortages, and to increase supplies.
FDA data on the number of shortages do not fully convey the problem. Drug shortages in the U.S. affect scores of widely used older drugs, including injectable dextrose, sodium chloride and water, as well as other sterile injectable products used in common medical treatments. In its most recent report to Congress, covering calendar year 2022, FDA reported a count of shortages that covered only those at least 12 months old. It excluded shortages younger than 12 months but active as of Dec. 31, 2022.
FDA’s reports do not explore the surprising persistence of many ongoing shortages. Shortages that began in 2019 and continued through Dec. 31, 2022, for example, include dexamethasone (used for multiple sclerosis, allergies, cerebral edema, inflammation, and shock), hydrocortisone suppositories, potassium acetate (used to remedy low potassium), and parathyroid injections (used to address low calcium). Such lengthy shortages suggest FDA’s mitigation efforts do not work.
Through the 2020 CARES Act, Congress granted FDA new authorities to collect information from manufacturers on potential shortages. Congress expected the new authorities would lower shortages. Unfortunately, the number of ongoing, unresolved pharmaceutical shortages instead rose by roughly 22 percent in just over 18 months (February 2022 through September 2023), while the country was recovering from the pandemic supply disruptions.
Data on FDA’s anti-shortage efforts are limited. FDA does not report by how much demand exceeds supply for drugs it deems to be in shortage. It does not report how its mitigation efforts vary for drugs facing deep supply shortfalls compared to more moderate ones. And it does not report its mitigation efforts for drugs in shortage for extended periods.
Without a detailed and full accounting of FDA’s response to potential and actual shortages, there is little basis for believing that granting FDA more authorities would lead to non-trivial reductions in shortage-related harm.
Congress should require an independent assessment of four essential components of FDA’s response to shortages. First, it needs to ascertain the timeliness of FDA’s listing and delisting of drugs and biologics in shortage. Second, Congress ought to measure the effectiveness of FDA’s response to short-term shortages versus persistent ones. Third, it should quantify the success of FDA’s response to especially severe shortages. And lastly, Congress needs information on the effectiveness of select shortage-mitigation measures, such as importation of foreign drugs.
But greater transparency and accountability for FDA’s anti-shortage program are not enough. Congress should also take steps to formalize and promote FDA’s efforts to encourage manufacturers of similar drugs approved and marketed abroad to export them to the United States. Greater and more timely imports of drugs and biologics made at FDA-registered foreign locations could provide needed resilience to U.S. markets for pharmaceuticals.
Recent academic research shows that drug shortages are often unique to specific countries. Thus, for many shortages of FDA-approved prescription drugs, countries that have competent drug regulatory agencies could help meet excess demand in the United States.
Congress should act to formalize and encourage importation of generic drugs to address shortages in the United States. Formalizing generic drug importation would sidestep questions about whether the FDA or a foreign regulator makes the best approval and labeling decisions for new drugs. In addition, older drugs that are sold as generics typically have well-known safety profiles — so substantive differences in labeling in different countries should be minor and easy to straighten out.
If additional importation of foreign versions of U.S. drugs in shortage were focused on countries with trusted drug regulatory agencies — those in the European Union or in the OECD — there should be few concerns about safety for American consumers. After all, if a 30-year-old drug is available in Finland or Spain and deemed safe for residents of those countries to use, why prevent its import into the U.S. to address potential or existing shortages?
Randall Lutter is a senior fellow at the Manhattan Institute.