Veleka Peeples-Dyer and Khelin Aiken, Baker McKenzie04.02.20
Responding to and mitigating the impact of the COVID-19 pandemic has catapulted its way to the top of every business operation consideration in each industry and the global market in general. One of the more vulnerable operations for the life sciences industries we anticipate will continue to require adept and innovative efforts to mitigate impact is the medical product supply chain. Disruptions to medical product supply will not only affect public health, but it has significant burden on the manufacturer as well.
Notably, the consequence of supply chain interruptions from a compliance perspective vary slightly, depending on the type of product and its indication. Human drug products and medical device products have different requirements for reporting supply chain disruptions, and the impact of COVID-19 has cast a bright light on this inequity. Compliance with reporting requirements is important during the ongoing pandemic.
Medical Product Shortage Reporting Requirements
The Federal Food Drug and Cosmetic Act requires manufacturers of a drug product that is life supporting, life sustaining, or intended for use in the prevention or treatment of a debilitating disease or condition that is not a radio pharmaceutical, including any such drug used in emergency medical care or during surgery, to report supply chain disruptions at least six months prior to the interruption, or if not possible, as soon as practicable.
As is the case with some drug products, medical devices can be life supporting and life sustaining, posing a risk to public health if essential care for patients is disrupted. No similar reporting requirements for shortages of medical device products exist. Nevertheless, the FDA advises medical device/supply manufacturers to report shortages to the Center for Device and Radiologic Health (CDRH). It also tracks shortages and supply issues for such products. Manufacturers are encouraged to respond to FDA’s requests about potential supply chain disruption so the agency can take steps to help support awareness of potential disruption of access to critical medical products. Medical device manufacturers may report potential supply chain disruptions to the FDA’s device shortages mailbox at deviceshortages@fda.hhs.gov.
Medical Product Shortage Compliance Vulnerabilities
As early as late January, the FDA began reaching out to manufacturers to remind them of their legal reporting requirements for anticipated supply chain disruption in light of COVID-19. Since all active pharmaceutical ingredients (API), certain raw materials, excipients, components of medical devices, and finished products must be manufactured in FDA-approved and inspected facilities, identifying an alternative supplier and scaling up for inspection and approval is complicated. In many cases, a supplier of APIs or other components may be single- or limited-source.
Initially, the FDA asked manufacturers to direct their supply chain inquiry to APIs and other components manufactured in China. This advisory was borne out of the FDA’s identification in late February of nearly 20 drug products with ingredients sourced from China, where COVID-19 severely impacted production. However, with the rapid spread of COVID-19, supply chain disruption concerns are no longer limited to China but have expanded globally. In fact, India’s recent curtailment of the export of 26 APIs may continue to increase vulnerabilities in manufacturers’ supply chains.
Manufacturers typically forecast their supply through firm forecasting for a certain period (generally 12 months, depending on the drug product), and distributors have certain limitations on the amount of products they can hold in their warehouses. Distributors play a key role in the supply chain and can assist manufacturers in carefully assessing the demand for medical products. Given the rapid spread of COVID-19 and its impact on the industry, it is anticipated that manufacturers’ ability to provide advance notice of supply chain disruption may be significantly hampered.
Key Takeaway
It is vital for manufacturers of market-critical drug products to survey their supply chain and current available product supply to ensure compliance with reporting requirements. Further, while FDA inspections of manufacturing facilities in China are currently not taking place, the FDA has increased import sampling and screening in order to continue monitoring product quality. Supply chain compliance efforts must be nimble and respond to the shift in FDA monitoring efforts.
As in past instances of worldwide disturbances, COVID-19 has unveiled the vulnerabilities of the medical product supply chain. It has highlighted the industry’s reliance on a complex system of import and export regulations, skilled workers, the availability of raw materials, API, and manufacturing outside of the US, and dependence on contract manufacturing organizations and other third party vendors located outside of the US. Even in the absence of a pandemic, medical product shortages occur for a variety of reasons, including quality issues and various other supply-chain-related delays. The full impact of COVID-19 is yet to be realized.
The FDA maintains a list of drug shortages: at https://www.accessdata.fda.gov/scripts/drugshortages/default.cfm.
Update (April 7)
The U.S. Congress deployed significant and extensive countermeasures in passing the CARES Act on March 27, 2020. Urgently signed into federal law that same day, the Coronavirus Aid, Relief, and Economic Security Act, or "CARES" Act, addresses a wide variety of issues, including drug and medical device shortages. In relevant part to this article, the CARES Act amended the Food, Drug and Cosmetic Act to aim to further mitigate drug shortages and prevent medical device shortages.
Preventing Medical Device Shortages
The FDCA amended to require that manufacturers of devices (i) deemed critical to the public health during a public health emergency, including devices that are life supporting, life sustaining, or intended for use in emergency medical care or during surgery; or (ii) for which it is determined that information on potential meaningful supply disruptions of such device is needed during or in advance of a public health emergency, provide notice of (i) permanent discontinuance in manufacture of the device (except for discontinuances as a result of an approved modification), or (ii) an interruption of the manufacture of the device that is likely to lead to a meaningful disruption in the supply of the device in the United States. (Section 3121)
Mitigating Emergency Drug Shortages
The CARES Act now requires the Secretary to not only expedite but also prioritize (i) the review of drug applications or supplements to such drug applications that could help mitigate or prevent a shortage; or (ii) the inspection or reinspections of an establishment that could help mitigate or prevent a drug shortage. (Section 3111)
The Federal Food, Drug and Cosmetic Act is amended to require that manufacturers provide the FDA with advance notice of a shortage of any drug that is deemed critical to the public health during a public health emergency or any discontinuation or interruption in the supply of such drugs or its' active pharmaceutical ingredients. (Section 3112)
Veleka Peeples-Dyer is chair, North America FDA Practice Group for Baker McKenzie. She brings more than 20 years of strategic and practical business and legal counsel to a wide span of biopharmaceutical companies, advising on FDA regulatory and compliance matters, including over 15 years of senior in-house counsel experience in leading biopharmaceutical companies. Peeples-Dyer’s practice provides full coverage for clients, including, but not limited to, clinical trials and good clinical practices (GCP); current good manufacturing practices (cGMP), including quality systems and quality management programs; pharmacovigilance; advertising and promotion; licensing, development and collaboration agreements; and compounding and compliance and enforcement, including assistance with FDA 483 audits, responses to warning letters and assistance with corrective and preventative actions (CAPAs) and other FDA enforcement actions.
Khelin N. Aiken practices in the area of U.S. Food and Drug Administration regulatory and compliance law. She leverages her deep understanding of the U.S. Food Drug & Cosmetic Act, U.S. Public Health Service Act, and their implementing regulations along with her prior experience at the U.S. Food and Drug Administration (FDA) to help clients develop and achieve their strategic business objectives. Aiken focuses her practice on leading and counseling life sciences companies from product development through the product life cycle, with a particular focus on therapeutic product development plans and marketing applications for prescription drugs, including therapeutic biologics and generics.
Notably, the consequence of supply chain interruptions from a compliance perspective vary slightly, depending on the type of product and its indication. Human drug products and medical device products have different requirements for reporting supply chain disruptions, and the impact of COVID-19 has cast a bright light on this inequity. Compliance with reporting requirements is important during the ongoing pandemic.
Medical Product Shortage Reporting Requirements
The Federal Food Drug and Cosmetic Act requires manufacturers of a drug product that is life supporting, life sustaining, or intended for use in the prevention or treatment of a debilitating disease or condition that is not a radio pharmaceutical, including any such drug used in emergency medical care or during surgery, to report supply chain disruptions at least six months prior to the interruption, or if not possible, as soon as practicable.
As is the case with some drug products, medical devices can be life supporting and life sustaining, posing a risk to public health if essential care for patients is disrupted. No similar reporting requirements for shortages of medical device products exist. Nevertheless, the FDA advises medical device/supply manufacturers to report shortages to the Center for Device and Radiologic Health (CDRH). It also tracks shortages and supply issues for such products. Manufacturers are encouraged to respond to FDA’s requests about potential supply chain disruption so the agency can take steps to help support awareness of potential disruption of access to critical medical products. Medical device manufacturers may report potential supply chain disruptions to the FDA’s device shortages mailbox at deviceshortages@fda.hhs.gov.
Medical Product Shortage Compliance Vulnerabilities
As early as late January, the FDA began reaching out to manufacturers to remind them of their legal reporting requirements for anticipated supply chain disruption in light of COVID-19. Since all active pharmaceutical ingredients (API), certain raw materials, excipients, components of medical devices, and finished products must be manufactured in FDA-approved and inspected facilities, identifying an alternative supplier and scaling up for inspection and approval is complicated. In many cases, a supplier of APIs or other components may be single- or limited-source.
Initially, the FDA asked manufacturers to direct their supply chain inquiry to APIs and other components manufactured in China. This advisory was borne out of the FDA’s identification in late February of nearly 20 drug products with ingredients sourced from China, where COVID-19 severely impacted production. However, with the rapid spread of COVID-19, supply chain disruption concerns are no longer limited to China but have expanded globally. In fact, India’s recent curtailment of the export of 26 APIs may continue to increase vulnerabilities in manufacturers’ supply chains.
Manufacturers typically forecast their supply through firm forecasting for a certain period (generally 12 months, depending on the drug product), and distributors have certain limitations on the amount of products they can hold in their warehouses. Distributors play a key role in the supply chain and can assist manufacturers in carefully assessing the demand for medical products. Given the rapid spread of COVID-19 and its impact on the industry, it is anticipated that manufacturers’ ability to provide advance notice of supply chain disruption may be significantly hampered.
Key Takeaway
It is vital for manufacturers of market-critical drug products to survey their supply chain and current available product supply to ensure compliance with reporting requirements. Further, while FDA inspections of manufacturing facilities in China are currently not taking place, the FDA has increased import sampling and screening in order to continue monitoring product quality. Supply chain compliance efforts must be nimble and respond to the shift in FDA monitoring efforts.
As in past instances of worldwide disturbances, COVID-19 has unveiled the vulnerabilities of the medical product supply chain. It has highlighted the industry’s reliance on a complex system of import and export regulations, skilled workers, the availability of raw materials, API, and manufacturing outside of the US, and dependence on contract manufacturing organizations and other third party vendors located outside of the US. Even in the absence of a pandemic, medical product shortages occur for a variety of reasons, including quality issues and various other supply-chain-related delays. The full impact of COVID-19 is yet to be realized.
The FDA maintains a list of drug shortages: at https://www.accessdata.fda.gov/scripts/drugshortages/default.cfm.
Update (April 7)
The U.S. Congress deployed significant and extensive countermeasures in passing the CARES Act on March 27, 2020. Urgently signed into federal law that same day, the Coronavirus Aid, Relief, and Economic Security Act, or "CARES" Act, addresses a wide variety of issues, including drug and medical device shortages. In relevant part to this article, the CARES Act amended the Food, Drug and Cosmetic Act to aim to further mitigate drug shortages and prevent medical device shortages.
Preventing Medical Device Shortages
The FDCA amended to require that manufacturers of devices (i) deemed critical to the public health during a public health emergency, including devices that are life supporting, life sustaining, or intended for use in emergency medical care or during surgery; or (ii) for which it is determined that information on potential meaningful supply disruptions of such device is needed during or in advance of a public health emergency, provide notice of (i) permanent discontinuance in manufacture of the device (except for discontinuances as a result of an approved modification), or (ii) an interruption of the manufacture of the device that is likely to lead to a meaningful disruption in the supply of the device in the United States. (Section 3121)
Mitigating Emergency Drug Shortages
The CARES Act now requires the Secretary to not only expedite but also prioritize (i) the review of drug applications or supplements to such drug applications that could help mitigate or prevent a shortage; or (ii) the inspection or reinspections of an establishment that could help mitigate or prevent a drug shortage. (Section 3111)
The Federal Food, Drug and Cosmetic Act is amended to require that manufacturers provide the FDA with advance notice of a shortage of any drug that is deemed critical to the public health during a public health emergency or any discontinuation or interruption in the supply of such drugs or its' active pharmaceutical ingredients. (Section 3112)
Veleka Peeples-Dyer is chair, North America FDA Practice Group for Baker McKenzie. She brings more than 20 years of strategic and practical business and legal counsel to a wide span of biopharmaceutical companies, advising on FDA regulatory and compliance matters, including over 15 years of senior in-house counsel experience in leading biopharmaceutical companies. Peeples-Dyer’s practice provides full coverage for clients, including, but not limited to, clinical trials and good clinical practices (GCP); current good manufacturing practices (cGMP), including quality systems and quality management programs; pharmacovigilance; advertising and promotion; licensing, development and collaboration agreements; and compounding and compliance and enforcement, including assistance with FDA 483 audits, responses to warning letters and assistance with corrective and preventative actions (CAPAs) and other FDA enforcement actions.
Khelin N. Aiken practices in the area of U.S. Food and Drug Administration regulatory and compliance law. She leverages her deep understanding of the U.S. Food Drug & Cosmetic Act, U.S. Public Health Service Act, and their implementing regulations along with her prior experience at the U.S. Food and Drug Administration (FDA) to help clients develop and achieve their strategic business objectives. Aiken focuses her practice on leading and counseling life sciences companies from product development through the product life cycle, with a particular focus on therapeutic product development plans and marketing applications for prescription drugs, including therapeutic biologics and generics.
