FDA Releases Draft Guidance on Notifying FDA of Discontinuances or Interruptions in Finished Product and API Manufacturing

FDA Releases Draft Guidance on Notifying FDA of Discontinuances or Interruptions in Finished Product and API Manufacturing

April 13, 2023, Covington Alert

FDA and Congress continue to take interest in preventing drug shortages. The Agency for many years has requested additional authorities from Congress to help mitigate drug shortages and Congress over the years has granted the Agency such authorities. However even with additional authorities, FDA and Congress have indicated that they are looking for additional ways to gain insight into the U.S. drug supply.

Last week, FDA released a draft guidance on the drug shortages notification requirements under section 506C of the Federal Food, Drug, and Cosmetic Act (FDCA) and its implementing regulations. The shortage notification requirements were established under Title X of the Food and Drug Administration Safety and Innovation Act of 2012 (FDASIA) to help the Agency monitor the overall market and take timely steps, if needed, to help prevent or mitigate drug shortages. FDA released a guidance in March 2020 to address drug shortage reporting requirements under section 506C during the COVID-19 pandemic. Shortly thereafter, section 3112 of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) expanded the notification requirements under section 506C to include supply interruptions and discontinuations for active pharmaceutical ingredients (APIs) used in finished drug products. The 2023 draft guidance largely tracks the 2020 guidance with respect to reporting supply interruptions and discontinuances for finished drugs, but has expanded to reflect FDA’s expectations and interpretation of the CARES Act statutory API shortage reporting requirements that apply to manufacturers of covered finished products. Once finalized, the draft guidance will replace the March 2020 guidance.

Below is a summary of the draft guidance.

Who must report?

The section 506C shortage notification requirements apply to applicants (for approved drugs) or manufacturers (for unapproved drugs) (collectively thereafter “manufacturers”) of finished products (prescription drugs and biological products) that are life supporting, life sustaining, or intended for use in the prevention or treatment of a debilitating disease or conditions, including products used in emergency medical care or during critical surgery or critical products during a public health emergency. Under the CARES Act revisions, manufacturers are also required to submit shortage notifications for APIs used in finished products that are subject to the shortage notification requirements. Notably, the new draft guidance indicates that the applicant (manufacturer) is solely responsible for submitting required shortage notifications to FDA, regardless of whether the product or API is manufactured by the applicant itself or under contract by another entity. This means, among other things, that FDA expects manufacturers to establish mechanisms and processes for obtaining information about supply and availability of their APIs and contract manufactured products with their third-party API suppliers, contract manufacturers, and other relevant entities to enable the applicant to meet the shortage reporting requirements set out in section 506C.

What events must be reported to FDA and when?

Manufacturers must submit a notification to FDA at least six months in advance of:

1. A permanent discontinuance in the manufacturing of finished products;
2. An interruption in manufacturing of finished products that is likely to lead to a meaningful disruption in supply in the U.S.;
3. A permanent discontinuance in the manufacturing of APIs for finished products; and
4. An interruption in the manufacturing of APIs for finished products that is likely to lead to a meaningful disruption in the supply of the APIs for such products.

If six months is not possible, the manufacturer must submit a notification to FDA as soon as practicable. A notification related to a permanent discontinuance or interruption in manufacturing a finished product must be submitted no later than five business days after the discontinuance or interruption in manufacturing occurs. Further, a manufacturer should submit a separate notification for each permanent discontinuance or interruption.

For finished products, FDA interprets a permanent discontinuance to be a decision by a manufacturer to cease manufacturing and distributing its product indefinitely for business or other reasons. In assessing whether a meaningful disruption in supply is likely to occur, the analysis is whether a change in production is likely to lead to a reduction in the supply of a finished product that is more than negligible and would affect the manufacturer’s own ability to fill orders or meet demand for the product. The assessment is not based on other manufacturers’ or competitors’ capacities. If a manufacturer is unsure of whether to notify FDA of an interruption in manufacturing of a finished drug, FDA urges submitting a notification. In addition, if a manufacturer is considering taking an action that may lead to a meaningful disruption, such as holding production to investigate a quality issue, FDA requests the manufacturer notify FDA immediately.

In the case of interruptions in manufacturing of API, the guidance clarifies FDA’s interpretation of the statute that a covered finished product manufacturer is required to notify FDA of interruptions in the manufacturing of the API of such products that are likely to lead to a meaningful disruption in the supply of API. FDA explains that the manufacturer should consider whether a change in production of the API is likely to lead to a reduction in the supply of API by the API supplier that is more than negligible and would affect the API supplier’s ability to fill orders or meet expected demand for the API. As noted above and in the draft guidance, this means that FDA expects the manufacturer to obtain sufficient, timely information about changes in production of their supplier’s API so that the applicant can in turn fulfill the shortage requirements that fall on the manufacturer.

While section 506C applies to discontinuances or interruptions, FDA also requests manufacturers notify the Agency when the manufacturer is unable to meet demand even in the absence of an interruption. For example, when there is a sudden, unexpected spike in demand.

Contents of the Notification for Finished Products

Under section 506C, at a minimum, manufacturers must include in a notification: the name of the product, the name of the applicant (for approved drugs) or manufacturer (for unapproved drugs); whether the notification relates to permanent discontinuance or interruption; the reason for the discontinuance or interruption; if an API is a reason for, or risk factor in, the discontinuation or interruption, the source of the API, and any alternative sources for the API known by the manufacturer; whether any associated device used for preparation or administration included in the finished product is a reason for, or risk factor in, the discontinuation or interruption in manufacturing of the finished product; and the estimated duration of the interruption.

In addition to these baseline requirements—and to expedite FDA’s response to an anticipated shortage—FDA requests that manufacturers provide a variety of additional information about the potential supply disruption or interruption in manufacturing. This may include but is not limited to the potential for preventing disruption; detailed explanation of the underlying reason/root cause; expected timing for onset, duration, and exhaustion of existing supplies; market share information; whether the product is sole-sourced; available inventory and anticipated depletion rate/timing; communications with stakeholders regarding supply availability; proposals for shortage mitigation; and other factors as may be relevant. FDA notes that if a manufacturer is unable to provide all of the requested information, a manufacturer should provide FDA with an initial notification and supplement the notification as more information becomes available (i.e., manufacturers should not delay their notification in order to be able answer all of FDA’s questions at once). FDA also recommends that a manufacturer provide an update approximately every two weeks on the situation, including the expected timeline for resuming normal operations, even if the status remains unchanged.

Contents of the Notification for APIs

Under section 506C, at a minimum, manufacturers must include in a notification: disclosure of reasons for the discontinuation or interruption in manufacturing of the API; source of the API and any alternative sources for the API; and expected duration of an interruption.

FDA also recommends manufacturers include information such as the name of the finished drug in which the API is used and the applicant/manufacturer of the finished drug; associated Drug Master File (DMF) information; whether the notification relates to permanent discontinuance or interruption; estimated timing for potential interruption and duration; and the impact of the discontinuance or interruption in manufacturing the API on the supply of the finished product or ability to fill orders for the finished product.

Failure to Notify FDA

If a manufacturer fails to notify FDA in accordance with the mandatory notification requirements for finished products or APIs, the Agency will send the manufacturer a noncompliance letter. Manufacturers have 30 days to respond to a noncompliance letter, and FDA will post both the noncompliance letter and the manufacturer’s response on the Agency’s website within 45 calendar days of sending the noncompliance letter. FDA will not post the noncompliance letter if it determines that it was sent in error or that the manufacturer had a “reasonable basis” for not providing timely notification.

Information on Drug Shortages

FDA maintains public lists of finished products that FDA determines to be in shortage in the U.S. The lists include: established name of the product in shortage; name of application holder or manufacturer; name of distributor; reason for the shortage (from a list of reasons provided in the draft guidance); estimated duration of the supply disruption or shortage, anticipated date of availability, and resolution dates; and any additional information provided by the manufacturer on the shortage (e.g., DHCP letters, informed consent forms, or patient letters). In cases where a shortage does not occur or is prevented through FDA or stakeholder intervention, the product will not be posted on a list.

Next Steps

Stakeholders should consider submitting comments on this draft guidance, particularly on FDA’s recommendations and burden analysis for obtaining information from API suppliers and other third parties. FDA is accepting comments until June 5, 2023.

If you have any questions concerning the material discussed in this client alert, please contact the members of our Food, Drugs, and Devices practice.