Opting for an ounce of prevention rather than a pound of cure, the FDA unveiled a proposed rule and strategic plan Thursday to keep drug shortages from happening.

Once the rule is finalized, applicants of certain new drugs, generics, biologics, vaccines and blood products will be required to electronically notify the FDA at least six months in advance, if possible, of a permanent discontinuance or a manufacturing interruption that could likely result in a “meaningful disruption” in the supply of the product.

If advance notification isn’t possible, the drugmakers must inform the agency within five business days following a permanent discontinuance or interruption in manufacturing. The penalty for not doing so will be a publicly posted noncompliance letter.

The proposed rule applies to all prescription drugs and biologics that are “life supporting, life sustaining or intended for use in the prevention or treatment of a debilitating disease or condition,” including drugs used in emergency medical care or surgery. The rule expressly excludes radiopharmaceuticals.

In addition to drug and biologics applicants, the notification rule applies to “all manufacturers of certain drugs marketed without an approved application,” the FDA said. That would seem to imply that the rule extends to pharmacies that compound covered drugs but not those that compound biologics.

When asked during a media briefing about pharmacies compounding sterile biologics, Douglas Throckmorton, deputy director of regulatory programs for the agency’s drug center, said he was reluctant to speculate about compounding pharmacies. The focus will be on approved products by approved manufacturers, he added.

The question could take on greater significance if the Senate passes the Drug Quality and Security Act, which would classify large compounders as “outsourcing facilities” subject to FDA oversight and manufacturing requirements. The House has already passed the bill. (See BioWorld Today, Sept. 27, 2013, and Oct. 3, 2013.)

The proposed rule is part of the FDA’s obligations under the 2012 FDA Safety and Innovation Act (FDASIA). As written, the act gave the FDA the discretion to require early notification from makers of biologics, but it didn’t mandate their inclusion.

FDASIA set a Jan. 9, 2014, deadline for issuing the final rule – a deadline the FDA isn’t likely to meet. The proposed rule has yet to be published in the Federal Register. Once it’s published, it will be subject to a 60-day comment period, and then the agency will have to review the comments before it can finalize it.

The final rule will replace an interim rule the FDA issued in 2011 that requires early notification of possible shortages of single-source drugs and encourages voluntary reporting of other potential shortages. (See BioWorld Today, Nov. 1, 2011.)

FDA Commissioner Margaret Hamburg credited the interim rule, issued in response to an executive order at the peak of a national drug shortage crisis, with preventing more than 280 shortages last year.

The number of drug shortages quadrupled from 61 in 2005 to more than 250 in 2011 . Since then, the number has dropped significantly – 117 shortages were reported in 2012, and about 100 are listed on the agency’s shortage list this week.

In addition to the proposed rule, the FDA released a FDASIA-mandated strategic plan to prevent future shortages. The plan takes a two-pronged approach: One part focuses on improving and strengthening the agency’s response to potential shortages, and the other is a long-term look at beefing up manufacturing quality, Hamburg said. She claimed that 70 percent of drug shortages can be traced to breakdowns in quality and manufacturing issues.

But during congressional hearings into the shortages, a number of other factors were cited, including patent expirations, a rush to generic drugs, pricing issues, the expanding use of oncology drugs and the FDA’s aggressive enforcement actions. (See BioWorld Today, May 6, 2011 , Sept. 27, 2011, and June 19, 2012.)

GAO Warns About Indirect Costs

With the growth of academic indirect costs outpacing that of direct costs, the Government Accountability Office (GAO) is warning that the ongoing trend could limit the number of research grants the National Institutes of Health (NIH) funds in the future.

As it is, GAO found that NIH spent $6.2 billion – one-fifth of its total budget and nearly a fourth of its extramural research budget – on indirect costs in fiscal 2012.

A university’s indirect costs, which cover general facility and administrative expenses, are paid as a percentage of certain direct costs in a grant. While reimbursement for administrative costs is capped at 26 percent, there is no limit on facility reimbursement, which leaves “universities with few, if any, incentives for controlling these costs,” the GAO found.

As a result of the study, the GAO advised NIH to assess the impact of growth in indirect costs on its mission and to plan for how to deal with potential future increases that could limit the amount of grant funding available.

The study was conducted at the request of the House Energy and Commerce Committee, following reports that up to 95 percent of some NIH grants had gone for indirect costs. (See BioWorld Today, June 22, 2012, and June 26, 2013.)

Lawmaker: Protect User Fees

Hoping to build a secure wall around FDA and patent user fees, Rep. Michael Honda (D-Calif.) is asking his colleagues to join him in pressuring the House and Senate budget conferees to exempt the fees from future sequestration.

Although user fees don’t contribute to the budget deficit, the White House Office of Management and Budget determined that they should be subject to the sequestration knife. As a result, nearly $150 million in patent fees were diverted from the Patent and Trademark Office, and the FDA was denied access to $85 million in user fees in fiscal 2013, Honda noted. (See BioWorld Today, Sept. 4, 2013.)

“These diversions are hampering efforts to protect the health of patients, ensure access to innovative new technologies and maintain a robust intellectual property system that is crucial to American economic growth,” he said.

Any budget agreement must clearly express congressional intent that user fees should not be subject to sequestration, he added.