Robin Miller, a 62-year-old oncologist in Atlanta with bladder cancer, was scheduled to receive a potentially lifesaving drug in December. But her doctor’s office called shortly before the appointment to say: “Sorry, we don’t have any. We can’t give it to you,” according to Dr. Miller.
The disruption was due to a global shortage of the drug, BCG, which arose after manufacturing problems at two of the few global suppliers. Without the drug, Dr. Miller feared her cancer would come back and she would have to have her bladder removed, a step she called “barbaric.”

The BCG shortage followed a 2012 mold infestation that halted production for more than two years at an aging factory in Toronto owned by France’s SanofiSA. The drug’s only other manufacturer for the U.S., Merck & Co., has recently suffered production delays of its own.

Some of the thousands of patients who depend on BCG have resorted to tracking online message boards, calling hospitals and traveling hundreds of miles to find supplies. Some patients have gone without BCG while others have received less effective alternatives. “There are patients who aren’t getting optimal therapy right now,” says Dr. Edward M. Messing, a urologist at the University of Rochester Medical Center in Rochester, N.Y.
The crisis illustrates the potentially grave consequences of a persistent problem in health care: drug shortages. The number of drugs in short supply in the U.S. has risen 74% from five years ago, to about 265, according to the University of Utah’s Drug Information Service, which tracks supplies. They range from antibiotics and cancer treatments to commodity items such as saline.
Interviews with company executives, hospital pharmacists and regulators point to several causes of the shortages. Companies have failed to build enough production capacity, haven’t maintained equipment, and failed to ward off contamination in aging plants. A U.S. Food and Drug Administration crackdown on shoddy quality unintentionally worsened the shortages because some companies responded by shutting down plants or scaling back production during renovations.
Many of the scarce drugs are older, injectable treatments that can be complex and costly to manufacture, but which command relatively low prices because they aren’t protected by patent. Hospitals and doctors’ offices are the main buyers of the drugs. Companies can’t easily increase prices because insurers reimburse many generic hospital-administered drugs under a payment system that is more frugal than for other medicines.

Current shortages

Among the current shortages is the generic painkiller ketorolac, widely used in hospitals during and after certain surgical procedures. Hospira Inc. of Lake Forest, Ill., a major U.S. manufacturer of the drug, notified customers in January it was recalling more than 18 million vials because of contamination by crystal particles. The company said it has taken corrective action and resumed shipping most versions of the drug.

“The shortage of ketorolac deeply affects patient care, as we don’t have great substitutes,” says Sean Adams,an anesthesiologist in Naperville, Ill. “The staff time and expense of managing shortages is enormous. Worse, there are significant patient risks with shortages,” including more side effects with alternative drugs.

The antibiotic Zosyn and its generic equivalents, used to treat infections including pneumonia, also are in short supply. Pfizer Inc., which makes Zosyn, said an increase in global demand and “unplanned” maintenance and repairs at a plant in Italy had caused the shortage. It expects to resume shipping vials in September.

Barbara Murray, director of the division of infectious diseases at University of Texas Medical School in Houston, said the shortage sometimes forces doctors to switch to less effective alternatives.
Hospital emergency rooms have grappled with various shortages. Daniel Miller, an associate professor of emergency medicine at the University of Iowa Carver College of Medicine, says he has been unable to get a supply of droperidol, a drug commonly used in the emergency room to relieve migraine headaches, abdominal pain and nausea. Alternatives such as narcotics are less effective, he says. Manufacturers have reported production delays and raw-material shortages, according to the Drug Information Service.
Sanofi resumed production of the bladder-cancer drug BCG in Toronto last fall, but shipments aren’t expected until later this year. Merck has more than doubled production of its BCG product at a plant in North Carolina, but last summer the company detected a possible air-quality problem and suspended production for six weeks, causing shipment backlogs that persist. The FDA says BCG’s few foreign suppliers haven’t been in a position to quickly boost production.
BCG, a liquid delivered into a patient’s bladder, is expensive to manufacture because it is derived from live bacteria. Yet because the therapy is 25 years old and no longer protected by patent, it fetches only about $145 a vial, compared with about $2,700 for a vial of Avastin, a newer, patented drug for other forms of cancer that hasn’t had shortage issues.
BCG’s low price, coupled with the complexity and cost of manufacturing, has made the drug unattractive for many companies to produce, says Erin Fox, director of the drug information service at the University of Utah.
The Medicare and private-insurance reimbursement system for drugs that are administered in hospitals and physician practices, such as BCG, makes it harder for companies to raise prices for those drugs than for others, says Mark Painter, co-founder of a Thornton, Colo., consultancy that advises practices on reimbursement.
Insurers reimburse doctors and hospitals that buy BCG based on the average price charged over the past year. So if any single manufacturer tries to boost prices significantly, its customers would take an immediate financial hit until reimbursement rates catch up. In some cases, gray-market distributors operating outside authorized networks have exploited shortages by stocking up on scarce drugs and marked up prices charged to hospitals and doctors, according to a 2012 report by congressional investigators.
Merck and Sanofi and their predecessor companies have raised the price for BCG modestly in the more than two decades they have sold it. Both companies say the price hasn’t discouraged them from investing in the capacity and quality of their manufacturing.
But manufacturing troubles have undermined output. In 2011, a malfunctioning sprinkler system flooded the Toronto plant where Sanofi produces all of its BCG. The company discarded tainted batches, cleaned the facility and resumed production, says Philip Hosbach, vice president of new products and immunization policy at Sanofi’s vaccine unit, which makes BCG.
But more problems followed. In April 2012, Sanofi halted distribution of BCG after finding that a test designed to ensure the sterility of the product before leaving the plant wasn’t working properly, according to a Sanofi letter to customers. “We couldn’t verify what was going on with the product and the facility,” says Mr. Hosbach.
The same month, inspectors from the FDA visited the factory and found Sanofi records documenting mold contamination on the floor of BCG production areas and on workers’ gloves, according to inspection documents. The FDA also found that Sanofi’s method to detect yeast and mold in BCG samples had failed, according to an FDA document.
The FDA issued a warning letter in July 2012 ordering Sanofi to fix those and other problems. Canada’s drug regulator, Health Canada, said in July 2012 its inspectors found the presence of mold in manufacturing areas that are supposed to be sterile. That August, Health Canada suspended the plant’s license to operate. The agency reinstated it last year.
The FDA had increased its inspections, particularly of foreign plants, in 2009, in response to a safety scandal involving contaminated drugs made in China. The FDA faced accusations that it had failed to scrutinize factories at home and overseas. It developed a “cadre of highly trained and experienced inspectors to conduct inspections of complex facilities such as those that produce sterile injectables,” FDA officials wrote in the scientific journal Nature in 2013.
The FDA says it didn’t raise manufacturing-quality standards and doesn’t expect companies to stop production after it identifies quality problems. The FDA tries to work with companies to keep medically necessary products available, but it can’t order a company to continue production, says Valerie Jensen, associate director of the FDA’s drug-shortages program. Sometimes plant shutdowns are “sudden and unexpected,” she says. The FDA says its inspection rates for biologics plants—a category that includes Sanofi’s BCG plant—have been consistent for more than 15 years.

Production suspended

In June 2012, after consulting with regulators, Sanofi suspended production of BCG so it could renovate the plant. Initially, Sanofi planned to resume shipping BCG in late 2013. But in July 2013, a heavy rainstorm flooded the plant again, delaying repairs, says spokeswoman Marisol Peron.
“We recognize and regret the impact that this supply constraint may have on patients and their health-care providers,” she says.
After Sanofi’s production halt in 2012, the FDA asked Merck to boost BCG production. Merck raised output at a plant in Durham, N.C., to more than 700,000 doses last year and is targeting 850,000 this year, compared with about 350,000 in 2011, says Sanat Chattopadhyay, Merck’s senior vice president of global manufacturing operations.
But last July, Merck halted production for six weeks because its routine monitoring of air quality in the plant detected mold, says Mr. Chattopadhyay. Merck determined that no BCG product was contaminated. But the hiccup contributed to a backlog in shipments.
In March, Merck sent a letter to physician practices and hospitals saying it expects shipping delays to persist into early 2016.
Soon after the Merck production halt, says Dave Clifford, his doctor canceled a BCG treatment scheduled for September 2014 because of the shortage. Mr. Clifford, 70, has been given chemotherapy instead and remains cancer free, but studies have shown chemotherapy is less effective than BCG at preventing relapses. As of last week, he still hadn’t received any BCG.
“How can that happen in this country?” asked Mr. Clifford, a retired buyer of men’s clothing who splits his time between Plymouth, Mass., and Bonita Springs, Fla. “We put people on the moon.”
Mary Greene, 70, was diagnosed with bladder cancer last July and had a tumor removed. She was supposed to start receiving BCG in October, but was unable to get any. Ms. Greene, assistant director of development services at Columbia Law School in New York, scoured a patient-advocacy group’s online message board for tips on BCG availability.
She eventually found some at a different New York hospital and has received periodic doses there since December, under the care of a different doctor. Her cancer hasn’t returned. “This totally took me by surprise,” she says. “It was the very first time I had to think about the drug companies as failing the people that they’re supposed to be there for.”
Her new urologist, John Sfakianos of Mount Sinai Hospital, says delays in administration of BCG can increase the risk that a tumor will come back.
The BCG shortage continues. In early April, Dr. Messing’s practice in Rochester had enough BCG for about six higher-risk patients, but not enough for another nine patients who would normally receive it but are at lower risk of recurrence, he says. He says he is trying to save the drug for cases where it may prevent patients from “losing their bladders or lives.”
The BCG shortage has hit other countries including the U.K. and Canada. “Here it’s being rationed,” says Wassim Kassouf, a urologist at McGill University Health Center in Montreal. “We’ve decreased dosing.” Some studies suggest a reduced dose may be comparably effective to a full dose in the initial phase of treatment, but it isn’t clear whether it remains as effective in the long term.
The FDA explored whether manufacturers of foreign versions of BCG could fill the U.S. gap, but concluded they weren’t able to in the short term, an agency spokesman says.
A federal law passed in 2012 gave the FDA more powers to prevent and resolve shortages, including requiring manufacturers to provide advance notice to the agency of potential shortages, and allowing the FDA to speed up approvals of manufacturing upgrades. The number of new shortages decreased to 44 in 2014, from a peak of 251 in 2011. The FDA says it prevented 101 shortages last year by working closely with manufacturers following notifications of potential shortages.
A 2014 report from the Government Accountability Office said the FDA could do more to alleviate shortages, such as routine analysis of shortage data to identify trends or patterns.
The FDA recently made available a free software application for mobile devices that identifies drugs in short supply and allows users to report a suspected drug shortage to the FDA.
Dr. Miller, the retired oncologist in Atlanta, eventually found a different urology practice in town with a BCG supply and has gone back on the drug. She is scheduled to get another dose in June, but is anxious about whether it will be available.
“I’m still pretty concerned,” she says. “Time is of the essence. This is not something we want to be debating a year from now.”