Addressing Drug Shortages

The United States is facing a national crisis of shortages of generic, sterile injectable drugs that are used in hospitals, says Martin VanTrieste, president and CEO of Civica Rx, a not-for-profit generic-drug company founded in 2018 to reduce and prevent drug shortages. “These medications play an essential role in surgeries, emergency care, and patient treatments. Over the past two decades, shortages of generic, injectable drugs critical to the lifesaving work of hospitals in the US have become commonplace,” says VanTrieste. Civica’s mission is to make quality generic medicines accessible and affordable, and many large healthcare systems representing hospitals have joined as members. Pharmaceutical Technology interviewed VanTrieste and Russ Gall, chief manufacturing and supply chain officer at Civica, about the challenges of drug shortages and the company’s plan for addressing the problem by providing manufacturing capacity and ensuring quality.

Root cause of shortages

PharmTech: What are the biggest challenges the industry faces in solving the drug shortage problem?

VanTrieste (Civica): During the past several years, more than 200 drugs have been listed on the FDA’s and the American Society of Health System Pharmacists’ (ASHP) drug shortage lists. Drugs in short supply include older medications that are commonly prescribed and accessed by everyone. Many drugs in shortage are generic, sterile injectables. They can be challenging to manufacture and are sold at very low prices because they are not under patent. These chronic shortages are negatively affecting patient care. They can cause surgeries to be canceled or delayed and treatments to be suboptimal when providers must use a less effective drug.

The root of the problem is an unsustainable economic model for the manufacture and sale of commonly used generic drugs. Despite their important role in hospital patient care, the fact that they are older generic medicines rather than innovative drugs creates competition to sell them at unrealistically low prices. The resulting low profit margins drive manufacturers to seek the least expensive suppliers, often from manufacturers in China and India, where quality control may not be as stringent as in the US. This can result in poor-quality products and quality-related recalls. Additionally, many US factories have not been modernized with improved quality systems, resulting in shortages at domestic facilities.

Low margins also provide little incentive for manufacturers to enter or stay in the generics market. For those who do, low profits provide little motivation and few resources to maintain or upgrade manufacturing facilities, buy from suppliers of quality APIs, or ensure that business continuity plans, redundant manufacturing capacity, and well-stocked inventories to prevent shortages remain in place in the event of a natural disaster.

Manufacturing strategy

PharmTech: Can you summarize Civica’s manufacturing strategy, your progress so far, and next steps?

Gall (CivicaRx): Civica’s manufacturing strategy begins with a well-vetted list of medically necessary products that have either been consistently on-and-off the FDA’s and ASHP’s drug shortage list or that have experienced predatory pricing. Civica utilizes feedback from its Drug Selection Advisory Committee (which is comprised of representatives from many Civica member hospital systems) to establish lists of target products and associated prioritization. 

Civica’s manufacturing strategy is then to first identify abbreviated new drug application (ANDA) holders that are currently manufacturing the products and determine if there is a potential for contracting with the manufacturer (as a contract manufacturing organization [CMO]) to leverage that specific CMO’s ANDA to manufacture Civica-labeled product.  Long-term contracts with guaranteed volumes are often an incentive for the CMO.  However, final selection as a CMO partner only occurs following significant due diligence from the perspectives of reputation, regulatory compliance history, product quality, manufacturing capabilities, available capacity, and pricing.  All products subsequently manufactured and labeled for Civica must be released by the Civica quality unit prior to distribution.  Another critical part of Civica’s overall manufacturing strategy is ensuring redundancy of supply.  This includes sufficient sources for APIs, excipients, and components, as well as for finished product.  This can occur through multiple manufacturing facilities operated by a CMO, multiple CMOs for a specific product, and Civica-owned (autonomous) manufacturing facilities/capabilities.  In addition to redundancy of suppliers and/or manufacturing facilities, Civica will also ensure adequate levels of inventory as safety stock to further enable supply during potential shortages. 

Civica is currently developing its own ANDAs through a partner CDMO for targeted products, the first of which will be in hospitals early in 2022, which will subsequently enable Civica to manufacture products from its own production facilities. An agreement was recently signed with Thermo Fisher Scientific to begin developing and subsequently manufacturing nine different generic injectable drug products for Civica.

Finally, Civica has engaged a firm to help find a Civica-owned manufacturing facility. Civica is actively evaluating and negotiating with potential acquisitions and/or partnerships for autonomous manufacturing, which gives Civica the most control over the manufacturing of its products.

Each aspect of Civica’s manufacturing strategy is simultaneously being developed and implemented to ensure all capacity and product availability needs are being addressed to support member and patient needs. Importantly, the intent is to continue utilizing all three parts of our manufacturing strategy indefinitely.

PharmTech: Can you share your perspective on refurbishing vs. new construction? What would some key considerations be?

Gall (CivicaRx): We are actively considering both options and look forward to sharing our plans in the future. There are pros and cons associated with refurbishing an existing manufacturing facility versus building a new facility from the ground up. Depending on the extent of renovation required, refurbishing an existing facility can have financial and time to market advantages, as well as other advantages of potentially having an existing and trained staff and FDA inspectional history (if favorable). Although demolition can often add significant costs to a project, another potential advantage may be that key portions of the facility can still be used, such as critical utilities, equipment, etc. Although new construction can be a financial challenge, it has the advantage of being able to be designed for the exact company needs. Appropriate capacity, utilities, technologies, location, equipment, and personnel can all be established to best meet product quality, demand, and cost objectives. 

PharmTech: Do you see modular construction as useful parts of your strategy?

Gall (CivicaRx): Civica has investigated this approach as part of its overall manufacturing strategy to create autonomous production capabilities. There are pros and cons to this approach too. Modular and prefabricated construction typically have the key advantage of being able to meet aggressive timelines. This can be a critical factor in being able to get products manufactured and to patients in need in the shortest amount of time possible. The potential downsides to this approach are: 1) modular or prefabricated cleanrooms may be limited in overall footprint for accommodating certain types of manufacturing lines or operations, and 2) the costs can be substantially higher than conventional construction. Furthermore, our observation is that, although modular systems arguably have the potential to be disassembled and moved to another location for reassembly, so far this has proven to be challenging.

PharmTech: Are GMP compounding facilities part of the solution for drug shortages?

Gall (CivicaRx): These operations are typically a much smaller scale than those required for manufacture of commercial batch sizes for large-scale pharmaceutical products. Expiration dates are shorter for compounded products. Finally, compounded products are significantly more expensive. Civica members currently use compounding facilities, and since the members already have these relationships, they have asked Civica to focus on FDA-licensed manufacturing facilities. Today, compounding facilities serve a vital role reducing the impact of drug shortages; however, the question is whether compounding facilities will continue to have a role to play as drug shortages are resolved.