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Shortage of Cancer Drugs Jeopardizes Development of New Treatments

The search for new cancer treatments is being sidetracked because pharma companies are having a difficult time providing enough drug to clinical trial participants. These cancer-treatment shortages already have caused hundreds of studies to be stopped or delayed, according to Howard Koh, assistant secretary of health for the Department of Health and Human Services.

Testifying before the House Energy and Commerce Subcommittee on Health during a hearing Sept. 23, Koh said more than 300 clinical studies being paid for by the National Cancer Institute involve a drug that is in short supply. The FDA reported a record 178 drug shortages in 2010, and that figure is expected to be surpassed this year.

The drugs in short supply aren’t new treatments. They tend to be the mainstay cancer drugs that were developed years ago, most of which are given intravenously or injected. Newer drugs typically are added to the older therapies during studies. Besides cancer drugs, others in short supply include antibiotics to treat infections and nutritional drugs for patients who can’t eat. Today, these generic drugs are produced primarily by two companies, Teva (NASDAQ:TEVA) and Hospira (NYSE:HSP).

It wouldn’t seem that an interruption of a few days or weeks would have such a huge impact on the trials, but that’s clearly not the case, according to Robert DiPaola, director of the Cancer Institute of New Jersey. “During a clinical trial, a shortage of only a few weeks in an existing drug might mean delays of years for the development of new drugs,” Dr. DiPaola testified, according to The Wall Street Journal.

The culprit behind the shortages is a combination of industry consolidation and manufacturing problems. When either occurs, competitors just can’t ramp up production fast enough to make up for the loss. Teva earlier this year reopened a California plant that it had shut down voluntarily for about a year to make changes required by the FDA.

One member of Big Pharma scrambling to supply a popular cancer drug is Johnson & Johnson (NYSE:JNJ). Sporadic supplies of the J&J drug Doxil are likely to continue for several months, the company wrote in a Sept. 23 letter to doctors. The drug is used to treat ovarian cancer, multiple myeloma and AIDS-related Kaposi’s sarcoma. It’s been around a while — about 16 years — and isn’t a huge seller for J&J, accounting for global sales of less than $300 million in the first half of the year.

Doxil might not be that important to J&J’s bottom line, but it’s critical to patients awaiting the drug. The shortage has forced some health care providers to delay treatment of patients and has caused the cancellation of at least one clinical trial, according to testimony at the Congressional hearing.

J&J attributed the shortage to a contract manufacturer having limited capacity to make the drug and then deciding to get out of the business altogether. J&J has pinpointed a new supplier, but the transition is going to take some time, thus the continued shortages.

Barry Cohen does not own shares of any of the aforementioned stocks.

Article printed from InvestorPlace Media, https://investorplace.com/2011/09/pharma-cancer-drugs-teva-hospira-jnj/.

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