Thanks to the newly-signed $2 trillion emergency relief bill, FDA now has $80 million in additional funding to battle COVID-19. Among other things, these funds will be utilized by the agency to monitor the medical product supply chain.
FDA could start by pursuing these three items:
(1) Identify prescription drug wholesale distributors that have failed to report to the agency as required under section 503 (e)(2)(A) of the FD&C Act and pursue applicable enforcement actions, such as warning letters and criminal prosecutions, when warranted. If you’re wondering why FDA has not done this already, you are not alone. It’s a real head-scratcher to me. Any wholesale distributor found to be in violation of this basic requirement represents a potential supply chain vulnerability and could be the next Volunteer Distribution, the formerly-licensed TN wholesaler implicated by the agency in the initial counterfeit Avastin incursion in early 2012. It only takes one corrupt wholesaler to wreak havoc on our supply chain. Vulnerable patients ultimately pay the price when regulators fail to root these bad actors out.
I suspect FDA does not know the exact number of state-licensed wholesale distributors and their locations. Instead, the agency likely relies on information in their public database of authorized wholesale distributors and assumes that every wholesaler has complied with the reporting requirement. This is obviously a faulty assumption. Unknown numbers of smaller, secondary wholesale distributors are likely skirting this requirement to stay off the agency’s radar. FDA should know this. Historically, secondary wholesale distributors represent the weakest links in our domestic drug supply chain. Leaving their oversight to beleaguered state regulatory authorities is irresponsible.
(2) Identify pharmacies that are also licensed as wholesale distributors or are affiliates of wholesale distributors and ensure they are not engaging in shortage drug diversion or price diversion schemes. In its July 2012 report on drug shortages, titled “Shining Light on the Gray Market,” Congress found, “Gray market drugs leak out of authorized distribution chains, often through pharmacies that sell to wholesale distributors, and are sold to end users at aggressively marked-up prices. The questionable business practices of the distributors and pharmacies engaged in gray market sales result in higher health care costs and potential risks to patients.” Considering we are in the midst of a pandemic and crucial drug shortages are already being reported, the Congressional findings in this report are more relevant now than ever before. Unfortunately, it seems this report fell into a regulatory black hole. I’m not aware of any actions undertaken by FDA to address this groundbreaking Congressional report.
The following complaint was included in the Congressional report. Complaints like this are probably just as commonplace today as they were about ten years ago. This needs to change!
“I don’t understand this shortage, and it makes me angry because the drug is unavailable for patients who need it…What I want to know is, how did these distributors get this drug when no one else has it, and what is the basis for their pricing? Isn’t this kind of price gouging illegal?”
(3) Perform limited regulatory inspections of higher-risk independent pharmacies to establish compliance with DSCSA requirements. These inspections could allow FDA to estimate the potential threat these trading partners pose to our supply chain and patients on a much larger scale. However, I suspect DSCSA-related oversight of these pharmacies is not being conducted by state boards of pharmacy or FDA in any meaningful way. This is a gaping supply chain security hole that must be plugged. The scope of this vulnerability is completely unknown and represents a major patient-safety blind spot.
Each of these items will increase FDA’s ability to monitor and assess the security of our nation’s pharmaceutical distribution supply chain. With these additional funds, FDA should have the ammunition it needs to battle historical supply chain security bulges that have threatened vulnerable patients for far too long.