Ask any executive why they think there are drug shortages, and they will no doubt blame some combination of the long-lasting impact of the global pandemic, inflation, energy costs and global conflicts.

Whilst these are clear mitigating factors, The U.S. Pharmacopeia (USP) has just published its first-ever Drug Shortages Report, further detailing reasons for drug shortages in the United States over the past decade. The report, which includes data up to the end of 2023, indicates that on average, drug shortages now last over three years - compared to about two years in 2020, and affect a broad spectrum of therapeutic classes.

In summary, four key factors were identified as significant contributors:

• Low Prices: Older generic drugs with low prices are at higher risk of shortages. In 2023, product discontinuations rose by 40%, suggesting that tightening margins are forcing manufacturers out of the market. Sterile injectable medicines in shortage were priced nearly 8.5 times lower than those that were not

• Manufacturing Complexity: Drugs with complex manufacturing processes, such as sterile injectables and certain antibiotics, are more prone to shortages due to the need for specialized facilities and complex chemical synthesis

• Geographic Concentration: Drugs produced in limited locations are more vulnerable

• Quality Concerns: Issues related to regulatory inspections and manufacturer recalls can indicate higher shortage risks, especially when combined with other factors.

Although focuses on the U.S., the trends and issues highlighted are indicative of global problems.

The Longer-Term Impact

The repercussions of drug shortages extend far beyond inconvenience. Patients left without critical medications may experience deteriorating health, complications, and in the most severe cases, death. As health systems struggle to manage supply issues, they often resort to less effective or more expensive alternatives. Not only can this result in severe and long-lasting effects on the functioning of health systems, but medical innovation is also often hindered, as resources are diverted to managing current crises rather than developing new treatments.

To combat these issues, the report says, future policies and innovations become essential strategies for biopharma companies and their CDMO partners. Strengthening supply chains, improving manufacturing processes, and ensuring better regulatory oversight are critical steps, but so is the encouragement in the development of resilient, decentralized production capabilities which can reduce geographic concentration risks and mitigate the impact of local disruptions.

Before the report's publication, several organizations including the American Society of Clinical Oncology and the American Society of Health-System Pharmacists, came together as a task force to address the issues and find sustainable solutions through collaboration, research, and advocacy.

The CDMO segment plays a large part in ensuring reliable supply and should take heed of the call to action document published on the back of the report, which outlines six key attributes that negate the challenges leading to drug outages:

1. Coordinate supply chain resilience and reliability efforts

2. Increase supply chain visibility

3. Establish a list of vulnerable medicines

4. Align the market to incentivize supply chains of quality and adequate supply

5. Bolster manufacturing capacity

6. Research to better understand market interactions.

Although innovations and trends in drug development might capture the headlines - biosimilars and AI, for example - the conclusions of the report demonstrate that good old drug development is still in demand. If solving the challenges were simple, publication of this report and creation of the task force wouldn’t have been necessary.

Access the full report here.