Drug shortages are driven more by regulatory requirements than by the profit motives of companies, a generic drug company official told congressional staff Monday.
Regulatory issues drive drug shortages, exec says
“If you are going to discontinue a product that you are the only manufacturer of and you are required to provide notification, then you really don’t do that,” Jonathan Kafer, vice president for sales and marketing at Teva Pharmaceuticals, said at a congressional briefing regarding the ongoing drug shortage. Drug supply disruptions have drawn increased congressional scrutiny in recent months, even as their exact causes remain unclear.
Cases of manufacturers discontinuing production of a pharmaceutical because of shrinking profitability are “very much in the minority” of drugs that have fallen into shortage, Kafer said.
Instead, a bigger cause of the shortages are regulatory requirements, such as a renewed push by the Food Drug Administration to require all drug makers to have active approved applications. That initiative has led several generic drug makers that never had such paperwork for drugs that are so old they predate the FDA process to shut down production rather than fulfill the costly regulatory requirements, he said.
“That speaks to the primary point around discontinuation,” Kafer said about regulatory impacts.
The regulatory role in the drug shortages appears to run counter to testimony given last week by Dr. Howard Koh, assistant secretary for health at HHS, who blamed, in part, profit-seeking over any regulatory impacts.
“The profit margins on generic drugs are quite small compared with brand name drugs, and over time, some companies may choose to discontinue production of generic drugs due to lack of profitability,” Koh said at the House Energy and Commerce Committee hearing.
Kafer agreed with Koh that the greatest number of drug shortages stems not from a lack of production capacity but from unconnected manufacturing problems that occurred at many facilities last year.
“But once those facilities are fully operational—and they are at varying stages of recovery—there is plenty of capacity,” Kafer said.
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