On Wednesday, the House Oversight and Government Reform Committee's health subcommittee on considered strategies for addressing the nation's ongoing shortage of lifesaving drugs, Modern Healthcare reports (Zigmond, Modern Healthcare, 11/30).
Background
In testimony during a congressional hearing in September, HHS officials said that 178 drug shortages were reported to FDA in 2010, nearly three times the number reported in 2005.
Many of the shortages involve generic drugs that some companies have stopped developing because they are less profitable. Other shortages have occurred because of capacity limits or contamination issues at drug plants.
The shortages of medically necessary drugs -- those that treat life-threatening illnesses -- have continued to escalate this year, the officials said.
President Obama in October issued an executive order intended to address such shortages. Meanwhile, lawmakers are considering legislation (HR 2245, S 296) that would require drugmakers to alert FDA when they expect a shortage (California Healthline, 11/1).
Latest Hearing
Michelle Hudspeth, chief of pediatric hematology and oncology at the Medical University of South Carolina, suggested shortages of chemotherapy drugs could increase medical errors and force physicians to ration care.
She said physicians are shortening gaps between chemotherapy sessions "out of fear that if we wait another week, there won't be drugs[s] available." She said, "Right now it feels like practicing medicine in a third-world country" (Bristol, CQ HealthBeat, 11/30).
Possible Causes
Hudspeth identified the Medicare Modernization Act of 2003 as the main reason for drug shortages, as it shifted the reimbursement rate from a percentage of average wholesale pricing to the average selling price, including all discounts and rebates.
She said, "Generic prices are driven down by market competition, and the current model under the MMA makes it difficult for companies to raise prices more than 6% per year." Hudspeth added, "Product margins have fallen significantly for many generic drugs, leaving companies with little incentive to continue manufacturing the drug or to increase production" (Modern Healthcare, 11/30).
Walter Kalmans, vice president of new ventures at WhiteGlove Health and former pharmaceutical consultant, said, "Manufacturing and supply-chain issues certainly play a role, but it is my opinion that [MMA] is the core culprit for why generic injectable drugs are in growing shortages."
However, Kasey Thompson, vice president at the American Society of Health System Pharmacists, testified that there "is no single root cause" for drug shortages.
Possible Solutions
Witnesses recommended that lawmakers consider:
- Changing the reimbursement formula for Medicare drugs to provide incentive for generic drug companies to produce larger amounts of needed medications (Ethridge, CQ Today, 11/30);
- Passing legislation that would require manufacturers to report possible shortages to FDA;
- Developing contingency plans; and
- Recommending that drugmakers stockpile generic drugs (Modern Healthcare, 11/30).
In addition, Thompson and other witnesses endorsed HR 2245 and S 296, which would require drugmakers to report any possible supply problems to FDA six months in advance. FDA said it has prevented 99 drug shortages in 2011 because of early notifications.
However, Rep. Paul Gosar (R-Ariz.) said such a law "doesn't really help anything." He added, "The way agencies move ... is antiquated. It's very, very slow ... then the crisis has already come."
More Hearings
Rep. Trey Gowdy (R-S.C.), a member of the subcommittee, said he wants to hold more hearings to identify possible solutions to drug shortages (CQ Today, 11/30).