In a move that highlights dilemmas plaguing the U.S. drug supply, federal regulators warned a major manufacturer about problems including bugs in vials of sterile drugs -- insects, literally -- the same day that health officials allowed the firm to ramp up scarce medications for kids with cancer.

Food and Drug Administration officials on Tuesday posted a warning letter sent to APP Pharmaceuticals LLC of Schaumberg, Ill., citing violations at a New York plant that included insects found in clean rooms and in vials of distributed drugs and failure to report defects such as vials contaminated with foreign matter and glass.

The firm also had problems with documenting sterile technique and was marketing unapproved drugs, according to the warning.

“It is apparent that APP Pharmaceuticals LLC’s has failed to implement global corrective actions,” it said.

The letter was dated Feb. 22, the same day that APP announced it had received accelerated FDA approval to market supplies of preservative-free methotrexate to help ease a critical shortage of the medication used to treat childhood leukemia.

Earlier this month, FDA officials and cancer doctors had said the drug was in such short supply, hospitals could have run out within two weeks, jeopardizing life-saving treatment for kids with acute lymphoblastic leukemia, or A.L.L., as well as patients with other illnesses.

“I am delighted that in many cases APP Pharmaceuticals has helped to minimize shortages by significantly increasing our production,” John Ducker, the firm’s president and chief executive said in a statement last week.  APP Pharmaceuticals is a subsidiary of the German firm Fresenius Kabi Pharmaceuticals Holding Inc.

The timing was not lost on Erin Fox, manager of the Drug Information Service at the University of Utah, which tracks the nation’s drug shortages.

“This is what I mean when I keep talking about quality issues,” said Fox, citing ongoing manufacturing problems at several U.S. plants, including APP. “All of these companies have had quality issues, yet they make the majority of drugs used in our country.”

The U.S. has logged record numbers of drug shortages in the past two years, fueled in part by sudden closures of drug plants because of problems with contamination, crumbling infrastructure and other issues, FDA documents show.

APP officials said the warning letter, which focused on problems at the firm’s Grand Isle, N.Y., plant, and the company’s efforts to ease the drug shortage crisis were two different issues.

“Methotrexate is not manufactured at the Grand Island plant and, thus, is absolutely unaffected from the warning letter,” Matthias Link, a company spokesman, wrote in an e-mail to msnbc.com.

The violations followed an FDA inspection last summer, June 13 to July 8, and the company had “already begun taking actions on most of the items listed,” Link noted.

“We take all the issues listed in the warning letter very seriously and we are committed to promptly addressing these,” he wrote.

The firm has 15 days from the date of the FDA letter to respond to the problems, including how insects came to be found in an aseptic, or sterile, room used to produce crucial drugs.

“You continued to find insects in your manufacturing area, in finished product (two vials), and you received a complaint for an insect in a distributed vial,” said the letter sent by Ronald M. Pace, director of the FDA’s New York district.

Company officials told FDA inspectors the root cause of the bug problem was with the firm’s supplier of gowns, but they had not scheduled an audit of the firm until six months later, December 2011, the warning said.

FDA officials did not immediately respond to msnbc.com questions about the timing of the warning letter and the expanded approval of APP to make injection-free methotrexate.

Agency officials last week announced they’d narrowly averted two dire shortages: first, the methotrexate scarcity, and then an ongoing shortage of the drug Doxil, used to treat ovarian and other cancers.

The agency licensed a foreign firm, Sun Pharma, temporarily to supply Lipodox, a replacement chemotherapy drug, to the U.S. market.

Balancing the demand for life-saving drugs with the demand that those drugs be safe and sterile is an ongoing challenge, noted Fox.

“Between the shortages and the quality issues, it is difficult to have any kind of confidence in our drug supply,” she said.

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An Ohio drugmaker began releasing limited supplies of a crucial medication to treat childhood leukemia Thursday, sending hospital pharmacists facing life-threatening shortages scrambling for their share.

Jerrod Milton, chief of pharmacy at Children’s Hospital of Colorado, was among those first in line as Ben Venue Laboratories began accepting new orders for the drug methotrexate, three weeks before the hospital would have run out completely.

“I had a tip that it was going to be available,” he said. “I put my pharmacy team on notice.”

Ben Venue officials said product would be allocated starting now and continuing over the next several weeks to oncology clinics, hospitals and pediatric facilities, easing the shortage crisis. No information was available about which sites would get the scarce drugs first, or in what order.

Milton is awaiting the arrival Friday of what he hopes will be 300 250-milligram vials of the widely-used drug to treat acute lymphoblastic leukemia, known as A.L.L., a blood cancer that mostly affects young children. It's a virulent cancer of the white blood cells that spreads to other parts of the body.

The drug is short-dated, meaning it is set to expire in two weeks, but Milton is requesting it anyway to replenish vital supplies of the medication that makes A.L.L curable in about 90 percent of cases, cancer doctors say. The amount and timing of the drug used varies widely according to age, weight and other patient factors. The Colorado hospital has dozens of patients on the protocol.

“It extends our supply by essentially up to a month,” said Milton, who is also his hospital’s vice president of operations. “But it’s still a very uncomfortable place to be.”

News this week that hospitals across the country were within a couple weeks of running out of the critical drug prompted herculean negotiations involving the federal Food and Drug Administration and the five manufacturers of methotrexate. The story was first reported in the New York Times.

Chuck Eaton, facesofhope.org

Justine Seibel, 13, of Fort Mill, S.C., is among thousands of children with acute lymphoblastic leukemia, or A.L.L., who are treated with the cancer drug methotrexate. Reports of dire shortages worry her mother, Christine Farinick.

It also prompted anxiety and anger for parents like Christine Farinick of Fort Mill, S.C., whose 13-year-old daughter, Justine, was diagnosed with A.L.L. a year ago. She has received dozens of treatments of methotrexate and is scheduled for another session in three weeks -- as long doctors can get it.

“Without it, there’s a high rate of relapse,” said Farinick, who is getting a passport and researching ways to obtain methotrexate from suppliers in Europe and Canada if she can’t obtain it in the U.S.  “It is available.”

Bedford Laboratories, which runs Ben Venue, worked with the FDA to arrange allocation of strictly limited supplies of the drug. The product was produced before the troubled firm voluntarily shut down its operations in November because of manufacturing and quality problems identified during FDA inspections.

“We hope this supply will help address near-term patient needs while other companies licensed to manufacture methotrexate increase production,” Ben Venue officials said in a statement.

The four other manufacturers of the drug -- Hospira Inc., Mylan Institutional, Sandoz and APP Pharmaceuticals LLC -- indicated they were trying to increase production or work with the FDA to allow production of the preservative-free version of the drug. Methotrexate without preservative is given intravenously or injected into spinal fluid, where preservatives could cause toxic reactions.

Neither Bedford officials nor the FDA would say how much product is available, or how many hospitals would be served.  Hospital buyers say they’re being quizzed about patient need and allowed a two-week supply of the drug, said Erin Fox, manager of the Drug Information Service at the University of Utah, which tracks drug shortages.

The new availability is both a relief and a reminder of the seriousness of drug shortages that now number about 287, the most in U.S. history, cancer experts said.

“Every little bit helps, but it’s so wrong that we have to live like this,” said Dr. Harvey Cohen, a professor of pediatrics at the Stanford School of Medicine and a member of the American Society of Hematology’s government affairs committee. After decades of progress in finding the right drugs to treat -- and cure -- A.L.L., not being able to obtain them is a huge setback, Cohen said.

He was waiting to hear Thursday whether he would get an order of 20 grams of methotrexate to treat a 16-year-old boy with a bone tumor on Friday.

“His tumor responded beautifully to the medicine. We know the medicine works,” Cohen said. “We have the orders in. I signed them myself yesterday. I just don’t know if we will get it.”

Cohen said he and his colleagues essentially have to ration the drug, giving highest doses to children with difficult-to-treat cancer and lower doses to those whose condition is easier to treat.

"Given the shortage, we have to be able to give that to the children who will benefit the most," he said.

Some experts are breathing a brief sigh of relief at the stop-gap supplies of methotrexate. Dr. Michael Link, president of the American Society of Clinical Oncology, praised the FDA’s efforts to avert a total shortage.

“The FDA deserves a fair amount of credit for really stepping up to the plate and resolving this for the short term,” he said. “It’s unfortunate that we had to get to a crisis situation.”

Five U.S. senators demanded more information about the problem on Thursday, sending a letter to Ben Venue officials saying patients and providers have been given no timeline for fully resolving the crisis. They asked for more information about the quality problems at Ben Venue that prompted the shutdown, stalling production not only of methotrexate, but other drugs in short supply. The senators asked if reimbursements for the drug, which is a low-profit generic, played a role in the current shortage.

That echoes the concerns of Christine Farinick, who said she believes that low returns are at the root of the problem.

"All the medication shortages are because the drugs are not profitable to make," she said, adding: “I think that’s absolutely disgusting." 

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Officials at at least one U.S. hospital admit they've discarded the scarce cancer drug doxorubicin in order to comply with strict regulations for storage and sterility.

Mounting shortages of crucial drugs are creating a new dilemma for the nation’s hospital pharmacists, who say they find themselves caught between breaking government rules for storage and safety -- or throwing away vital and lifesaving medications.

At one hospital in Florida, officials acknowledge they’ve discarded the scarce cancer drug doxorubicin, even as patients nationwide clamor for treatment.

“I’d never want to take a chance with not following the rules,” said Alan K. Knudsen, director of pharmacy legal services for Shands HealthCare at the University of Florida in Gainesville. “I wish I didn't have to throw it out."

Others, however, admit they’re bucking regulations imposed by federal agencies, including the Centers for Medicare & Medicaid Services, in the interest of patient care, as long as they have strong scientific evidence that the drugs are still safe.

"With the medications in very high need, we are using it," said Thomas Burnakis, coordinator of pharmacy clinical services at Baptist Medical Center in Jacksonville, Fla. It would gall him, for instance, to toss midazolam, a widely-used anesthetic known as Versed that has been in short supply for months, simply because it exceeded arbitrary storage limits.

“I am not throwing out the rest of that Versed,” he said.

And in the eyes of some patient care experts, he shouldn’t have to.

Organizations such as the Institute for Safe Medication Practices and the American Society of Health-System Pharmacists are raising questions about federal rules they believe exacerbate a crisis that saw 267 drugs in shortage last year, up from 211 the year before, the most in U.S. history.

“It’s really a major issue,” said ISMP president Michael R. Cohen. “It’s a waste of money and it’s a waste of drugs in short supply.”

 Most drugs, including those in shortage, have specific requirements for handling that limit how long and in what manner they are stored or how quickly they must be used after they're opened, industry experts say. Some must be refrigerated; others must be used within 24 hours after opening, or even immediately.

Those requirements should be listed in the official prescribing information package inserts that are approved by the federal Food and Drug Administration when a drug is cleared. But the directions may be incomplete or outdated. It can be costly and time-consuming to seek new FDA label approval, so updated science often doesn't make it into the inserts.

ISMP officials contend that pharmacists are hamstrung by Medicare regulations that require them to follow only the manufacturers’ package instructions for storage and use of medication, even when it's not current -- and even when there’s valid new scientific information available.

For instance, take the widely-used neuro-muscular blocker succinylcholine, which has been in shortage off and on for more than a year.

"The manufacturer says it's good for two weeks outside the refrigerator, but the literature says it would be good for three weeks or  a month," said Allen Vaida, executive vice president for the ISMP. "That period makes a big difference when you're talking about a drug shortage."

According to CMS interpretive guidelines for the agency's standard 482.25, “drugs and biologicals are stored in accordance with manufacturers’ directions and State and Federal Requirements.”

But a recent analysis conducted at Cedars-Sinai Medical Center in Los Angeles confirmed that directions for many of the drugs in shortage are flawed or lacking. Of 50 random drugs on the national shortage list, a third lacked basic information about compatibility with diluents and half lacked information about stability, storage and expiration dates after dilution, according to an ISMP report.

When pharmacists ask the manufacturers directly, the answers still may remain unclear, ISMP officials said. In that case, pharmacists often turn to recent studies or other accepted industry documents for guidance -- or they face trashing drugs based on falsely cautious parameters.

It's not clear what volume of drugs in shortage is being discarded. Officials with federal agencies including CMS and the Environmental Protection Agency say they don't keep those figures. Individual hospitals say they have no incentive to track them.

ISMP officials have launched a survey of the agency's members to determine the extent of the problem and to decide whether the group should petition CMS to relax the rule. Results are expected this month.

Dr. Patrick Conway, chief medical officer for CMS, says that the agency is willing to talk to ISMP about alternatives.

“The concern is that we don’t currently have another standard to apply,” Conway said. “The manufacturers’ label is a Food and Drug Administration-approved label.”

Hospitals found to violate storage and stability rules could face CMS fines or other sanctions.

Even when there are trusted regulations, such as the pharmaceutical compounding directions issued by the U.S. Pharmacopeia -- known as USP 797 -- being forced to toss limited drugs can put pharmacists in a quandary, said Bona Benjamin, ASHP’s director of medication-use quality improvement.

“In these situations, clinicians are likely to question whether there’s greater benefit or risk to the patient if medications that are scarce must be discarded,” she said, adding that ASHP officials support 797's science-based rules.

Other experts say they know some pharmacists are side-stepping requirements from the USP, the nonprofit organization that sets standards for drug safety and sterility, in order to conserve medications already in short supply.

“If I know I’ve got 10 single-dose vials to last me through the week, and 30 procedures, I have to make those 10 vials last,” said Gigi Davidson, a veterinary pharmacist at North Carolina State University who heads pharmacy compounding for the USP council of experts. “I am clearly stepping away from the standard when I make those choices.”

Pharmacists are repackaging drugs into smaller units, stretching the medications to serve more patients, even when the USP 797 rules warn that there's more risk of problems such as contamination and infection. The important thing is to make sure proper aseptic technique and procedures are followed, Davidson said.

“It makes me nervous, but it’s something I do with eyes wide open,” she added.

While the dilemma for the pharmacists is acute, some cancer patients believe there should be no question at all. Maggie Heim, 58, of Hermosa Beach, Calif., is a lawyer who was diagnosed in 2009 with stage 3 ovarian cancer.

She was prescribed the cancer drug Doxil, which has been in short supply since last year, particularly after a troubled contract manufacturer, Ben Venue Laboratories Inc., suspended operations last fall. She was placed on the Doxil waiting list arranged by Janssen Products LP, the Johnson & Johnson subsidiary that owns the drug's patent. She never received the medication, though, and had to be treated with a different protocol.

During her treatment, several other medications used to treat ovarian cancer were added to the drug shortage list.

“Give that I am fighting for my life, I would be very upset if I found out that a pharmacist was required to throw out a drug I needed that is in shortage,” said Heim, adding: “How could a pharmacist pour it down the drain when it is so needed to keep people alive?”

Some pharmacists refuse to take the risk. At Shands HealthCare, Knudsen, the pharmacy legal director, says rules are rules, even when drugs are in short supply. His hospital has been able to transfer doxorubicin patients safely to other drugs, he said.

"The Florida Board of Pharmacy and USP 797 rules were created to protect patients," Knudsen said. "Selectively choosing which rules to follow, particularly when alternatives to doxorubicin exist, seems risky."

Davidson agrees that standards should not be relaxed to accommodate the crisis of the moment.

"If it’s not drug shortages, it’s going to be something else,” she said.

At the same time, she understands the Catch-22 faced by a pharmacist who knows the drugs he discards could save someone’s life.

“Then I have to do some soul-searching,” she said. “Am I afraid of harming the patient, and that’s why I throw it away? Or am I afraid of regulatory authority?”

If it’s the latter, the pharmacist should seek guidance from the state board of pharmacy before tossing the medication, she said.

As far as experts can say, no hospital has yet faced sanctions for failing to discard drugs during the current shortages. “If someone comes in and surveys, there probably would be hell to pay,” said Burnakis, the Baptist Medical Center pharmacist.

But any sanctions, even in the case of patient harm, would have to be tempered with the reality of trying to salvage life-saving drugs in the midst of a crisis, Davidson said.

"If I were sitting on the jury and someone had to choose to stray from 797 to provide a needed drug to serve a child with cancer, I know exactly how as a juror I would vote."

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Lingering shortage of ADHD drugs unravels lives 

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Chris Langer for msnbc.com

Kate Skinn, 32 of Sheffield Lake, counts out the remaining doses of Adderall that treat her attention-deficit hyperactivity disorder. Skinn is among millions of Americans affected by a lingering shortage of vital medications.

After nearly 10 months, the nationwide shortage of ADHD drugs has taken a toll on Kate Skinn.

The 32-year-old Ohio woman had to take a medical leave from college because she can’t focus on her reading. She’s lost income from her job as a waitress because she’s distracted at work. And she’s had to struggle even harder than usual juggling the needs of her boyfriend and their four children, all because she can’t reliably get the Adderall that helps her cope.

“It’s impossible to manage all the facets of my life and do my schoolwork,” said Skinn, of Sheffield Lake, Ohio, who was diagnosed with attention-deficit hyperactivity disorder three years ago. “When I can’t take my medicine, I can’t concentrate. I’ll start everything I need to do, but never complete any of it.”

She’s among millions of Americans struggling to deal with the worst drug shortage in United States history. ADHD drugs such as Adderall and Ritalin, first reported as scarce last spring, are only a fraction of the 251 medications in short supply so far this year, up from 211 in 2010, according to University of Utah Drug Information Service.

The issue drew renewed attention Thursday, when the White House issued an interim rule that requires drugmakers that are the only producers of certain critical medications to report to the Food and Drug Administration all manufacturing interruptions that could disrupt supplies.

It follows an October executive order in which President Barack Obama directed the FDA and the Department of Justice to take bolder steps to resolve the worsening scarcity.

Shortages of life-saving drugs, such as those used to treat cancer, and medically necessary drugs, such as anesthetics and painkillers, have sparked the most dire concerns, experts say.

But shortages of the ADHD drugs widely used to help an estimated 5.4 million children and 1.5 million adults concentrate daily are also worrisome, especially as the problem continues.

“We get those reports from patients saying I had to drive three hours to get my ADHD prescription and this is the third, fourth or fifth time,” said Erin Fox, manager of the Drug Information Service, which tracks drug supply issues. “We’re hearing from moms who are so worried and upset about not getting the drugs their kids need every day.”

FDA officials, too, say the ADHD drug shortage has drawn a lot of attention.

“We’re hearing the same thing: that patients aren’t able to get these drugs,” said Valerie Jensen, associate director of the FDA’s drug shortage program. “We’re continuing to check with the companies about their expected resolution dates.”

Drugmakers say that increased demand and difficulty obtaining supplies of the raw materials used to manufacture the drugs are behind the ongoing ADHD pill shortages. But an official with the government agency that allocates those controlled substances says from his vantage, there’s plenty of raw material out there.

Chris Langer for msnbc.com

Kate Skinn watches TV with her 4-year-old son, Markus, who also needs medication to treat his ADHD.

The DEA allocates an aggregate amount of medically necessary supplies of controlled drugs -- for instance, 56 million grams of methylphenidate in 2011 -- and then doles out confidential portions to each drugmaker.

“We’ve given them quota sufficient to meet the needs and then it’s up to them how they manufacture their product,” said Gary Boggs, a supervisory special agent for the Office of Diversion for the federal Drug Enforcement Agency.

Company business decisions surrounding competition, marketing -- and profit margins -- are behind many of the troubles that patients have encountered, Boggs added. Manufacturers might make more of an expensive brand-name drug and not enough of a generic version. Or they may distribute too much product in one place, causing a shortage somewhere else.

“This isn’t just a clean there is either product or not product,” Boggs said. “There’s a whole lot of different dynamics in here.”

Drugmakers declined to discuss specifics of their DEA allocations.

Still, those dynamics have reshaped Kate Skinn’s life.

In the past 10 months, she’s had to drive to multiple pharmacies trying to get the different ADHD drugs used by four members of her family, including her 4-year-old son, Markus.

“I have to actually block out a whole day of my life to figure out if I’m going to have medication for the next day,” said Skinn.

Because the drugs are controlled substances, she and other patients have to follow strict rules governing prescriptions and refills. Skinn sometimes skips a dose at night in order to hoard them for times when she might run out.

“For people with ADHD, there’s already a stigma attached to it,” she said. “You end up feeling like you’re drug-seeking. It doesn’t make you feel good.”

In recent weeks, the ADHD shortage has shown signs of easing. Brand-name Adderall XR, the extended-release version produced for the drug company Shire Pharmaceuticals, has been logged as available in “adequate” supplies. Company spokesman Matt Cabrey said that’s because the DEA granted an increase in the firm’s allocation of amphetamine mixed salts used to make the drug.

Other firms, as well, say that as they receive their new DEA allocations in the new year, the shortages may subside.

That would be welcome news for patients like Skinn, but drug supply experts say they've heard that before -- and no one should count on it.

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