Industry says making multiple drugs in single factories is too risky

A shift toward making multiple medications under one roof is sparking concern about what happens when a facility suddenly shuts down because of a manufacturing or safety issue: Closing a single factory could lead to shortages of hundreds of drugs, say regulators and industry analysts.

Their anxiety is complicated by the tight secrecy surrounding where pharmaceuticals are made, so even experts aren't certain where or how a supply problem has occurred.

"Sometimes, months or years later, we figure it out," said Erin Fox, who directs the Drug Information Service at the University of Utah. "But it's rare."

The consolidation, driven by cost-cutting, drug company mergers and outsourcing of manufacturing, has prompted hospital pharmacists and health policy experts to fear that one misstep could spell disaster for patients.

Dr. Robert Califf, who stepped down as Food and Drug Administration commissioner in January, said backup manufacturing locations are needed because if "you put all your eggs in one basket and something goes wrong, you've got a problem."

The nightmare scenario played out in Bedford, Ohio, in 2013 -- one Betsy Neisner will never forget.

Ben Venue Laboratories shut down its plant there for good, ceasing production of pharmaceuticals after issuing more than 40 product recalls.

[Also: Senate committee opens inquiry into orphan drug pricing after KHN report]

The facility was making so many different drugs that the closure had a huge ripple effect, leading to shortages of more than 200 medications. In addition to making generic products bearing the company's Bedford label, the facility was a contract manufacturer for other drugmakers, most notably Johnson & Johnson, whose cancer drug Doxil was in short supply for years afterward.

"It was scary," said Neisner, 63, an ovarian cancer patient and the former executive director of Cancer Connection, a nonprofit in Massachusetts. "I had found something on the short list of drugs that would keep me alive, and all of a sudden it was off the list, with everyone scrambling around to figure out how to make it available."

Ben Venue was considered one of the nation's largest drug manufacturing facilities, operating 24 hours a day, seven days a week to meet demand, experts say.

"We kept calling Bedford to ask about ETAs for a variety of products, and over time it was clear that everything was on back order," Fox said.

Data gathered by S&P Global Market Intelligence show that mergers and acquisitions of prescription drug companies have risen during the past 16 years, with 345 deals in 2015 alone. Although critics have raised alarms over crucial drugs being made by too few companies, it's unclear how many drugs with different brand names are manufactured in the same outsourced plants.

The FDA said it doesn't track the number of drug-making facilities over time. And, in an effort to protect trade secrets, it doesn't reveal which products are manufactured at which factories. In many cases, the FDA may not know without going through cumbersome documents and calling the companies involved.

William Greene, the chief pharmaceutical officer at St. Jude Children's Research Hospital in Memphis, Tenn., said the shortages that have affected St. Jude tend to be related to manufacturing issues.

"Manufacturers are our partners, but they're also only out for their own good," Greene said, stressing that this is his opinion. "The driving force in the drug supply right now is simply 'How much money can we make?' There's no true focus on the question of 'Can we really help people? And do our decisions hurt people if we do this in a certain way?'"

In July 2016, a Government Accountability Office report said seven drug manufacturers ceased or slowed production between 2010 and 2012 because they failed to comply with manufacturing standards and received FDA warning letters following poor inspections. One closure resulted in 100 "actual or potential" drug shortages, the GAO said. Another facility that slowed production was making 300 drugs, which led to multiple shortages, the report said.

[Also: Senate committee opens inquiry into orphan drug pricing after KHN report]

The facilities weren't named, but six of the seven had to at least temporarily close because particles were found in sterile products. At one plant, the microbes found were "stringy, amorphous and globular," the report said.

Marcia Crosse, who directs the GAO health care team that authored the report, said that most of the 18 drugs for nutrition deficiencies in short supply from 2011 to 2013 were made at a single facility, despite bearing different brand names.

Crosse said that within its cumbersome filings, the FDA has records about drug-making plants that could shed light on these issues. But the listings could be incomplete or inaccurate. For instance, a drug listed as being produced at three facilities might not be made at all three plants.

"It's messy," Crosse said, calling it "internal spaghetti."

The FDA is working to improve these information technology systems, but it's not a high priority, Crosse added.

To hospital pharmacy directors like Fox, the lack of transparency is a big problem.

"Even with our food, we at least get to know the country of origin. There's nothing like that for medicine. It's a black hole," Fox said.

Plant consolidation is not the only reason for shortages. In some cases, drug license holders decide to discontinue products or can no longer obtain the right active pharmaceutical ingredients. The FDA has systems in place to prevent drug shortages, and although it can't force firms to make more drugs, it can work with them to expedite generic approvals and sourcing of ingredients to keep drugs available.

The companies that produce drugs under contract for other drugmakers say they're stepping in to fill a need in a shifting industry. Gil Roth, founder and president of the Pharma & Biopharma Outsourcing Association, said contract drugmakers don't set prices or get most of the profits.

Catalent makes 70 billion doses of drugs a year under contract and has a role in making 1 in 20 doses worldwide. It makes about 7,000 products, including branded drugs, biologics, generics and over-the-counter medicines. "Many products on the prescription side are coming from a single site globally … and exported globally," said Catalent's vice president of strategy, Cornell Stamoran.

He said it's not bad practice as long as backups are in place, which is the case at Catalent.

An inspection of a Florida Catalent facility in March noted six complaints for inexplicable blue flecks on tablets, which the report suggested could be the result of chipping blue paint from a machine in the facility or workers' blue gloves. Stamoran said that this didn't result in a shortage and that the situation was resolved.

Stamoran pointed out that contract facilities often face more inspections than do other plants. That's because the FDA conducts a facility inspection for each new and generic drug approval as well as other routine inspections, and companies that hire contract manufacturers conduct audits of their own.

As for Betsy Neisner, she was able to resume Doxil infusions after briefly taking a replacement drug nicknamed the "red devil" for its severe side effects, including pain, hair loss and intestinal problems.

KHN's coverage of prescription drug development, costs and pricing is supported in part by the Laura and John Arnold Foundation.

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