Pharma companies face $6 million fines for prescription medicine shortages


By Michael Woodhead

17 Apr 2018

Pharma companies that fail to maintain supplies of prescription medicines could face multimillion dollar fines under a revamped medicines shortages scheme  developed by the TGA.

In a consultation document circulated for public feedback, the TGA says the current voluntary Medicines Shortage Information Initiative is not working and has lost credibility among health professionals because the information on out-of-stock products posted on its website is either incomplete or not timely enough to be useful.

The regulator says many of the products affected by shortages are older and cheaper generic drugs, and the problem is worsened because several different brands may be manufactured by the same company.

With recent shortages affecting important medications such as metformin, heparin, glyceryl trinitrate and hepatitis B vaccines, the TGA says Australia needs to make its medicine shortage protocols more rigorous to bring them into line with other developed countries such as the US and UK.

It is proposing to make reporting of all medicines shortages to the TGA mandatory from 1 January 2019, and is seeking feedback on three possible options for infringement penalties, ranging from a “name and shame” system to heavy fines similar those already in place for failing to report adverse events.

Under the new scheme, all medicine shortages will have to be reported by pharma companies to the TGA, but with confidentiality maintained so that only those with a serious impact on patients are published on the TGA’s website.

The TGA has drawn up a Watch List of key essential medicines such as antibiotics, vaccines and drugs for emergency use, for which shortages would have an extreme patient impact and would trigger immediate action.

Responses to shortages of other medicines will be developed on a case-by-case basis within 72 hours by a Medicines Shortages Action Group. Actions might include rationing of existing supplies and identifying suitable alternatives, the TGA plan says.

It cites high impact examples such as the shortage of a new oncology drug where non-availability may lead to changes in treatment protocols or rationing of stock for patients already commenced on the medicine.

“An example of a medium patient impact is a shortage of an ACE Inhibitor for hypertension where a doctor would need to change their prescribing to another ACE inhibitor, or other anti-hypertensive medicine. In these cases, publicly available information for doctors and pharmacists would assist this process,” the TGA proposal states.

Penalties for pharma companies that fail to report medicines shortages or comply with protocols could range from publicly naming non-compliers to infringement notices and civil penalties. Companies currently face fines of up to $12,600 for failing to maintain supply of medicines but penalties could be increased to as much as $210,000 and daily financial penalties for non-compliance, to bring Australia into lign with the UK approach.

A more draconian option would see pharma companies subject to fines of up to $6.3 million and criminal prosecution for failing to report a medicine shortage.

The proposals, which would require amendments to legislation, have been released for consultation with feedback possible until 23 April 2018.

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