BETHESDA, MD 30 July 2012—President Obama on July 9 signed into law the Food and Drug Administration Safety and Innovation Act, bipartisan legislation that many groups believe will preserve patients’ access to critical drugs.

A prominent feature of the law’s provisions pertaining to drug shortages is the requirement for drug makers to notify FDA about a manufacturing interruption that is likely to lead to a "meaningful disruption" in the supply of a drug in this country.

Beyond pending discontinuations. "It’s an attempt to really help FDA better manage and even avoid drug shortages in the first place," said Joseph M. Hill, director of federal legislative affairs at ASHP, regarding the new law.

ASHP and 19 other national organizations representing clinicians, hospitals, or patient advocacy groups jointly told leading lawmakers in June that "early" notification was essential to helping alleviate shortages.

A notification requirement already existed, but it applied only to companies that were the sole manufacturer of a critical FDA-approved drug product.

And, until this past January, the requirement did not apply to temporary or intermittent cessations of manufacturing.

Early notification works, FDA’s Margaret Hamburg said in May.

Hamburg, the head of FDA, in late October 2011 asked all drug manufacturers to voluntarily notify the agency as soon as possible about potential disruptions in drug supply. Six months later, she reported that FDA had prevented 128 drug shortages and seen far fewer shortages than a year before.

One such preventive action concerned propofol, a sedative–hypnotic agent in wide use in surgical suites and intensive care units. Hamburg said a manufacturer notified FDA of anticipated delays in the supply, prompting FDA to work with the other manufacturer, which increased supplies.

Hill said ASHP hopes that the industry’s voluntary behavior continues until a planned regulation spelling out early-notification requirements is issued.

Congress gave the Department of Health and Human Services (HHS) an 18-month deadline for completing that rule-making process.

Permission to repackage drugs. The new law permits a hospital, under certain conditions, to repackage a drug in short supply, transfer it to another hospital in the health system, and not register as a repackager with FDA.

Hill said this section of the law addresses "old guidance" that predates the rise of multihospital health systems.

Not known yet, he said, is whether a health system with hospitals across the country may repackage a drug product into smaller containers and ship them to the other facilities.

"We’re going to be working with the agency very closely" as it writes the new guidance, Hill said. "We’re supportive of allowing this repackaging to occur, but we’re not really thinking of this as a way for someone to all of a sudden set up a little side business. . . . We’re going to have to work with the agency to make sure that the guidance is still keeping patient safety as the focus."

No mention of economic drivers. A June staff report from the House Committee on Oversight and Government Reform identified the following economic factors as contributors to the drug shortage crisis:

• Group purchasing organizations’ price negotiations and volume-based contracts, and
• The Medicare Modernization Act’s change to the reimbursement rate for injectable drugs given in outpatient settings and cap on the growth rate of payments to health care providers for administering these drugs.

The new law does not address those factors.

Hill said ASHP, in examining the reasons for drug shortages, has not found any data supporting suspicions about a specific economic element.

Rather, he said, the Society has observed that shortages tend to occur after a manufacturing plant is shut down—perhaps to rectify a quality issue—for an extended period of time.

Under the new law, the possible impact of FDA’s enforcement actions and warning letters on the supplies of critical drug products must, for the next five years, be taken under consideration.

If an enforcement action or warning letter could "reasonably cause or exacerbate a shortage" of a critical drug product, the law says the HHS secretary must weigh the risks of regulatory action versus inaction.

New user fees. Hill said ASHP will work with FDA as it writes the regulations that implement the law’s sections on drug shortages.

Although the Food and Drug Administration Safety and Innovation Act is widely known as the "PDUFA law," Hill said, referring to the Prescription Drug User Fee Amendments (PDUFA), the provisions pertaining to drug shortages do not need reauthorization.

The PDUFA authorizes HHS to collect a fee from a company when it submits a new drug application or supplement. Congress has been reauthorizing the PDUFA for five-year periods since 1997, when the first user-fee program expired.

This time around, Congress also authorized user-fee programs for generic drug and biosimilar biological products.

FDA said it expects the generic drug user-fee program to greatly decrease the time the agency takes to review applications—to a median of 10 months.

Hamburg in April had said the median time from the receipt of an application to market a generic drug product to the approval of that application was about 30 months.

Hill said ASHP supported creation of the generic drug user-fee program because it will enable FDA to employ more reviewers to evaluate the numerous applications.

Some of those applications, he said, are from companies that want to start manufacturing drug products known to be in short supply.