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Generic Oncology Drug Shortages

Clarence D. Moore, PharmD, BCPS
Assistant Professor

Clinical and Administrative Pharmacy Sciences

Howard University College of Pharmacy

Washington, DC

Thomas Riehl, PharmD Candidate

Howard University College of Pharmacy
Washington, DC


US Pharm. 2014;39(6)(Generic Drugs suppl):38-43.

I n recent years, practitioners have been forced to utilize alternative medications as a result of the increasing drug shortages sweeping the country. Yet practitioners are not alone in facing this situation; healthcare facilities, federal regulators, and patients also experience difficulties associated with these shortages. The origins of drug shortages are complex, as a confluence of factors is involved.1 The most frequently cited causes of drug shortages are manufacturing problems, raw material shortages, regulatory issues, and the lack of incentive for companies to manufacture or sell generic products. The generic products listed as being in short supply range from antibiotics and antihypertensive agents to common vitamin products (TABLE 1).2

Notably, chemotherapy injectables and supportive-care medications used primarily in oncology patients have been heavily affected. These generic agents, which are routinely utilized for the treatment of common and aggressive cancers, have been vulnerable to shortages in the United States since 2006.3 The development of drug shortages creates barriers to providing proper care and significantly heightens the risk of medication errors, as physicians have no choice but to prescribe agents they are not familiar with. In reports, one in four clinicians indicated that a medication error had occurred at his or her site because of drug shortages.1 Given this, much concern has been voiced in response to generic oncology drug shortages.

Why Are These Shortages Occurring?

Production Problems: According to the FDA, manufacturing and quality issues account for the majority of drug shortages.4 This possibly has led to the consolidation that leaves generic production in the hands of a small number of manufacturers. Hospira, Teva, Pfizer, and Bedford Laboratories, the few remaining major companies, account for more than 70% of the distribution of chemotherapy injectables across the U.S. An increased demand for medications, compounded by production troubles, has perhaps caused the decline in the generic chemotherapy industry.1 The use of aged and outdated factories often comes under scrutiny, as the FDA’s regulatory complexities and administrative requirements for recertifying the manufacturing of generic drugs have been deemed burdensome.5 Given that FDA approval of a specific manufacturing line is required to produce a specific drug at a specific facility, companies are strictly limited to the locations where they are permitted to formulate their products.5 This means that, for a drug that is in short supply, a pharmaceutical manufacturer is unable to initiate production at an alternative facility.5

In October 2013, Ben Venue Laboratories, a major manufacturer of generic chemotherapy injectables, announced the closing of its Bedford, Ohio–based plant.6 Ben Venue, which manufactured doxorubicin and methotrexate, temporarily stopped operations a few years ago, perhaps contributing to the shortage of these medications. The company cited problems with both the facility and projected revenues that led to the halting of production in 2013.6

The production of generic products is not as lucrative as it may appear. Companies often use the same machinery to create different products, resulting in a limited yield for some medications.5,7 The equipment requires costly maintenance or adjustments to comply with FDA regulations, thus further reducing companies’ already-slim margins. Resources are often reallocated to maximize return, further decreasing production of lower-end products. In 2008, levoleucovorin was approved by the FDA, and practitioners began to use it at increasing rates.1 There have been no proven differences in efficacy between this new medication and its counterpart, leucovorin; however, the price variation is vast. The price charged for levoleucovorin has been reported to be as high as 50 times that for leucovorin. Shortly after its entrance into the market, leucovorin was reported to be in short supply.1

Medicare Reimbursement: The Medicare Modernization Act of 2003 (MMA) was implemented in 2005, and shortages in chemotherapy medications escalated significantly in 2008. The formula for reimbursement of physician-administered chemotherapy was drastically altered by the MMA. Prior to passage of the MMA, Medicare reimbursed 95% of the average wholesale price (AWP; one of the most commonly used standards for pricing and reimbursement), whereas oncologists paid as little as 60% of the AWP.1 AWP, which is the unregulated price set by manufacturers, is intended to represent the average price at which the drug is sold.8 Owing to the frequent inflation of AWPs, large discrepancies in payment rates and acquisition costs often were created, resulting in massive gains for oncologists.9 In some cases, the reimbursement rate was found to be more than six times higher than the actual cost of the medication.10 In 2003, Medicare spent approximately $10 billion on these medications.11 This led to concerns that Medicare outpatient drug payments were too high and that the payment method created incentives for providers to administer drugs for which the acquisition costs were significantly lower than the Medicare reimbursement rate.

The MMA mandated that a 6% cap be placed on the average sales price (ASP) to reimburse practitioners for medications administered in their practice.7 ASP was substituted for AWP as the benchmark for reimbursement because it was thought to more closely represent acquisition cost, being the weighted average of actual prices paid.8 With the new reimbursement system paying 1.06 times the ASP of medications, some oncologists switched to higher-margin brand-name medications to maximize their profits.9

The Gray Market: The term gray market describes the hoarding of medications that are, or are anticipated to be, in short supply. This is a parallel market providing a supply channel that is unofficial, unauthorized, or unintended by the original manufacturer.11 Shortages give secondary drug distributors the opportunity to gain additional profits by selling shortage products, typically at inflated prices.12 The largest markups are for drugs needed to treat critically ill patients. In 2011, medications frequently used in oncology patients, such as cytarabine, dexamethasone 4 mg/mL injection, and leucovorin, were marked up 3,980%, 3,857% and 3,170%, respectively (FIGURE 1).12 It has been estimated that the gray market accounts for up to 50% of drug sales during a shortage.1 This raises concerns about the reliability of the medications being sold, because the integrity and appropriate care of medications are compromised.7 Records of the transactions from manufacturer origin to the dispensing pharmacy may be altered. Medications can be stolen, counterfeited, or mishandled somewhere down the line. Despite the many safeguards that are in place to protect products from adulteration, cases of these parlous products reaching the market have been documented.11

Drug Shortage Impact

A survey of 214 randomly selected oncologists reported that 82.7% were unable to prescribe the preferred chemotherapy drug because of shortages that occurred at least once in the previous 6 months.13 Several drugs mentioned in this survey were considered vital for cure, as well as for palliation, in several forms of cancer.13 Shortages caused roughly 75% of oncologists to switch to second-line therapy that may have been less effective than the standard of care. Chemotherapy regimens are often administered over several cycles, thus requiring an adequate supply of the drug so that therapy can be initiated and continued in the scheduled time frame. In a different study, cases of delayed therapy and higher relapse rates among children with potentially curable lymphomas were reported.14

A survey from the Institute for Safe Medication Practices found that 25% of clinicians indicated that an error had occurred at their site because of drug shortages.1 The majority of errors were attributed to lack of familiarity with the alternative agents being used. Alternative medications may require special preparation, dosage adjustments, and dissimilar administration from that of the product in shortage, creating increased opportunities for error. Institutions often establish protocols to minimize medication errors; however, when medications are in short supply, the protocol cannot be followed.

A vast majority of the revenue accumulated by oncology practices had routinely been generated through reimbursement of the chemotherapy delivered to patients. With the current model in place, increasing numbers of oncologists have been merging with hospitals to remain in practice or are closing their doors altogether.13 Since 2005, there has been more than a twofold increase in the percentage of patients receiving oncology treatment in hospital outpatient departments. As cancer medication costs continue to increase, it becomes more difficult for community practices to provide care. The costs of purchasing and administering these medications may total more than $10,000 each month per patient, resulting in a financial strain on the practice to obtain the medication prior to reimbursement. Joining forces with larger institutions often alleviates some of that strain and provides enhanced stability for the practice.

Where Do Things Stand Now?

The definition of drug shortages varies by organization. The American Society of Health-System Pharmacists describes a drug shortage as a “supply issue that affects how the pharmacy prepares or dispenses a drug product or influences patient care when prescribers must use an alternative agent,” whereas the FDA’s definition is “a situation in which the total supply of all clinically interchangeable versions of an FDA-regulated drug is inadequate to meet the current or projected demand at the user level.”15,16 Although shortages have reportedly been improving, life-saving medications such as oncology agents remain in short supply.

This circumstance caused the U.S. government to pass the Food and Drug Administration Safety and Innovation Act (FDASIA) on July 9, 2012. FDASIA requires, among other things, that manufacturers report drug stoppages or delays as soon as feasible, if the 6-month minimum is not possible. As of April 2014, the FDA has reported shortages of cyanocobalamin, daunorubicin, dexamethasone injection, leuprolide, and leucovorin, all of which are generic medications commonly used in oncology practice (TABLE 2).2 Previous FDA reports listed methotrexate, 5-fluorouracil, cytosine arabinoside, vincristine, etoposide, paclitaxel, thiotepa, and others.7 Although FDASIA does not solve the problem of drug shortages, it does provide early notification, allowing time for the government and institutions to act as necessary.


The pharmacist plays an important role in formulating strategies to combat the complications associated with drug shortages. Effective communication and meticulous planning are essential to ensure that proper measures for optimal patient care are taken. The planning of efforts such as reallocation of medications at an institution while proactively preparing for a shortage should be undertaken by a collaboration of practitioners, including a pharmacist. The pharmacist’s expertise is invaluable, as it can be used to assess and act on the issue at hand.

ACKNOWLEDGMENT: We thank Gabrielle M. Sherba for assisting with the proofreading and editing of this article.


1. Gatesman ML, Smith TJ. Perspective: the shortage of essential chemotherapy drugs in the United States. N Engl J Med. 2011;365:1653-1655.
2. FDA. Drug shortages. Accessed March 13, 2014.
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4. Stein R. Shortages of key drugs endangers patients. Washington Post. Accessed March 14, 2014.
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6. Mulcahy N. Major setback in US cancer drug shortage. Medscape. Accessed March 12, 2014.

7. Link MP, Hagerty K, Kantarjian HM. Chemotherapy drug shortages in the United States: genesis and potential solutions. J Clin Oncol. 2012;30:692-694.

8. Gencarelli DM. One pill, many prices: variation in prescription drug prices in selected government programs. Issue Brief George Wash Univ Natl Health Policy Forum. 2005;Aug 29:1-20.
9. Jacobson M, Earle CC, Price M, Newhouse JP. How Medicare’s payment cuts for cancer chemotherapy drugs changed patterns of treatment. Health Aff (Millwood). 2010;29:1391-1399.

10. U.S. Government Accountability Office (GAO). Medicare Chemotherapy Payments: New Drug and Administration Fees Are Close to Providers’ Costs. Washington, DC: GAO; 2005. Report no. GAO-05-142R.
11. Medicare Payment Advisory Commission (MedPAC). Healthcare Spending and the Medicare Program: A Data Book. Washington, DC: MedPAC; 2005:173.

12. Cherici C, McGinnis P, Russell W, Premier Healthcare Alliance. Buyer beware: drug shortages and the gray market. Accessed March 12, 2014.
13. Gogineni K, Shuman KL, Emanuel EJ. Survey of oncologists about shortages of cancer drugs. N Engl J Med. 2013;369:2463-2464.

14. Metzger ML, Billett A, Link MP. The impact of drug shortages on children with cancer—the example of mechlorethamine. N Engl J Med. 2012;367:2461-2163.
15. ASHP Expert Panel on Drug Product Shortages, Fox ER, Birt A, James KB, et al. ASHP guidelines on managing drug product shortages in hospitals and health systems. Am J Health Syst Pharm. 2009;66:1399-1406.

16. Center for Drug Evaluation and Research. Manual of policies and procedures [MAPP 6003.1]. Accessed March 7, 2014.

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