How the closure of US drugmaker Akorn contributed to the escalation of the drug shortage crisis


When Akorn Pharmaceuticals closed its doors in February, hospitals across the country felt it.

The Lake Forest, Illinois-based drug maker was responsible for producing 75 generic drugs, all of which were withdrawn from the market when the company went out of business. In some cases, the company was the sole supplier of certain products.

The shutdown comes amid, and contributed to, an ongoing drug shortage crisis in the US. Akorn’s bankruptcy and subsequent closure are part of a larger disaster caused by fewer U.S. manufacturers making cheaper generic drugs, meager profits for the remaining companies, and a global supply chain that could leave patients struggling. for life-saving medications for months and possibly years to come.

The shortage of new medicines increased by almost 30% between 2021 and 2022, affecting 295 products at the end of last year, according to a march report of the Senate Committee on Homeland Security and Government Affairs. Drug shortages are affecting cancer patients who desperately need chemotherapy drugs and people in intensive care units or emergency rooms who need certain generic IV drugs that are in short supply.

The shortages are getting worse: As of June, there were more than 300 active drug shortages, the most in nearly a decade, according to the American Society of Health System Pharmacists, a professional organization that tracks drug shortages.

Why is this happening now?

Drug shortages are not new. In recent years, there have been restrictions on the supply of heart medications, cancer treatments, and ADHD medications in the US and around the world. The supply of generic medicines is especially vulnerable. Companies like Akorn are facing intense competition and declining profits and have been forced to lay off workers and cut costs to stay in business.

With the Akorn closure, the US lost a «part» of its manufacturing capacity, while other generic drug makers struggle to stay in business, said Valerie Jensen, associate director of the administration’s drug shortage program. of Food and Drugs.

“When we see a company like Akorn shut down, that’s extremely concerning to us because then we lose that capacity,” Jensen said. “And then we have to work very closely with other companies to scale up and cover that shortfall. So it’s definitely concerning, and we continue to monitor very closely.»

Douglas Boothe, Akorn’s former chief executive, did not respond to a request for comment. Emails to Akorn’s media relations contacts went unanswered.

Americans rely heavily on generic drugs, accounting for about 90% of all prescriptions filled, according to the Association for Accessible Medicinesa trade group representing manufacturers of generic drugs.

At the same time, generic drugs, which sell for very low prices, account for only about 20% of drug spending in the US. Even with high demand for the products, the low cost of drugs means that Generic drug manufacturers don’t make a lot of money. , according to David Gaugh, interim president and CEO of the AAM.

Over the past decade, the number of generic drugs manufactured in the US has decreased. TO worksheet The National Bureau of Economic Research, a nonprofit, nonpartisan research group based in Cambridge, Massachusetts, found that between 2013 and 2019, the number of U.S. facilities did not go down in 2014, according to the report.

When Akorn closed after declare bankruptcywas one of two US suppliers of liquid albuterol, an essential medication used by hospitals to treat asthma and RSV in children.

It was one of the company’s most in-demand products, said Mohammed Kabir, who served as Akorn’s director of formula development before the company closed.

“It was a big surprise,” Kabir said of the Akorn closure.

The company, which was founded in 1971 as a manufacturer of eye care products, expanded to make a range of medicines including antibiotics, pain and allergy medicines, and veterinary medicines. Its generic medications included adenosine, which is a medication for irregular heartbeats, and lorazepam, which is used for anxiety as well as nausea and vomiting in some cancer patients. It was the only supplier of physostigmine, an antidote for overdoses of certain drugs, according to a report of the End Drug Shortages Alliance, a group dedicated to preventing drug shortages.

In the wake of Akorn’s closure, all of its drugs are in short supply or in supply trouble, as other generic makers struggle to fill the gap, according to the American Society of Health System Pharmacists.

Worse yet, when Akorn went out of business, it was no longer able to monitor the quality and safety of many of the drugs it had already distributed nationwide to retailers, medical centers, and online consumers. In early May, the FDA announced that Akorn was remembering drugs that had been distributed.

At the Mayo Clinic, pharmacists scrambled to switch suppliers or find a way to source drugs that only Akorn made. The clinic also had to dispose of any remaining Akorn products and notify doctors and patients of the recall.

“It’s definitely a challenging situation,” said Eric Tichy, president of the pharmaceutical supply solutions division at the Mayo Clinic in Rochester, Minnesota, and chairman of the board of directors of the End Drug Shortages Alliance. “The experience created additional work for our team and anxiety for the patients.”

Generic drug shortages could get worse

Once a pharmaceutical patent expires, generics are allowed on the market, often at a lower price than the brand name drug.

“The fundamental problem is the economics of the system,” FDA Commissioner Robert Califf said at the Aspen Festival of Ideas At the end of june. Unlike brand name drug companies, he said, generic drug makers are not protected by patents that allow them to sell drugs exclusively for a set period of time. For generic drug manufacturing to grow in the US, companies must be paid enough to make the drugs and stay in business.

The problems facing the industry now are likely to get worse as more American companies go under.

Lannett Co., a generic drug manufacturer in Pennsylvania, Announced in May that it filed for Chapter 11 bankruptcy, though it plans to continue operating while it restructures its business.

Teva Pharmaceuticals, a major Israel-based manufacturer of generic drugs, said in a statement the same month it was cutting back on its generic manufacturing. Early last year, India-based Aurobindo Pharma announced it was closing its US generic manufacturing facility in New Jersey.

“It has become a race to the bottom,” Gaugh said.

The generic drug industry’s business model has become unsustainable for many manufacturers, said Michael Ganio, senior director of pharmacy practice and quality for the American Society of Health System Pharmacists.

«If you talk to anyone in the generic drug industry, they’ll tell you about one-third make money, one-third break even, and one-third lose money,» he said.

Risks of Relying on Foreign Drug Manufacturers

The United States is already heavily dependent on foreign drug makers. In 2021, 78% of the suppliers of pharmaceutical active ingredients were in China, India and the European Union, according to the FDA. With the closure of Akorn, the US will become even more dependent on manufacturing abroad.

Foreign suppliers do not always meet the FDA’s rigorous standards for generic drugs. In addition, FDA visits to foreign facilities are often notified in advance, and investigators you can trust the installation to provide translation services, which raises concerns about whether the agency is getting all the information it needs to accurately assess the quality of the products.

“Overseas production in China and India has outpaced nearly all manufacturing plants in North America,” said David Gortler, a former FDA science policy adviser and an expert on FDA oversight. «Unfortunately, lower prices are often accompanied by poor quality.»

In December, Intas Pharmaceuticals, an India-based generic drug maker, temporarily halted production after a FDA inspection in 2022 cited numerous quality issues. The suspension led to a widespread shortage of cisplatin, a chemotherapy drug used for a variety of cancers, including those of the testicle, lung, bladder, cervix and ovary.

Global Pharma, also based in India, recalled its EzriCare Artificial Tears eye drops earlier this year after the products were linked to highly drug-resistant bacterial infections that resulted in four deaths. A FDA inspection found that the company did not follow the proper protocol to avoid contamination of its products.

Intas Pharmaceuticals and Global Pharma did not respond to a request for comment.

The move toward more overseas drug manufacturing is «a huge national security issue,» especially given the current state of international conflict, Califf said.

What can be done?

There are no quick fixes. Pharmaceutical companies are not required to disclose exactly which suppliers are making which product, as well as the location, said Erin Fox, a pharmacist and professor at the University of Utah School of Pharmacy. That means it’s very difficult for the FDA to know what products are made abroad.

“The problem is that we don’t know what comes from where or how much,” Ganio said. «It is not easily accessible.»

in a report Published in June, the Association for Affordable Medicines policy team outlined several steps the US government could take to help keep national generic drug makers afloat.

They included creating incentives for hospitals to buy supplies of generics at fixed prices for several years, providing generic drug manufacturers with a continuous source of revenue. The government could also give generic manufacturers grants that would allow them to upgrade their manufacturing facilities, as well as build new facilities that could provide additional capacity.

The steps also included that Medicare drug plans cover and encourage the use of new generics.

Because generic drug manufacturing is a very complex and highly regulated industry, it’s not easy for new manufacturers to get in right away, Tichy said.

That means that the patients who need the drugs will be left without them.

“The market is already short on supplies,” Tichy said. “How are we going to communicate that to patients?

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