Healthcare Business News

Late News: Bill targeting drug shortages draws mixed reactions

By Modern Healthcare
Posted: December 1, 2012 - 12:01 am ET

Republican lawmakers introduced legislation that aims to resolve drug shortages by changing the way that generic sterile injectable drugs are reimbursed and offering brand-name drug manufacturers incentives to enter the market when drugs are in short supply. The bill drew praise from the Community Oncology Alliance but opposition from Safety Net Hospitals for Pharmaceutical Access, which said its exclusion of drugs from a federal discount program is too broad. The Patient Access to Drugs in Shortage Act—introduced in the House by Reps. Bill Cassidy (R-La.), Andy Harris (R-Md.), Mike Rogers (R-Mich.), Tom Rooney (R-Fla.) and Dan Benishek (R-Mich.)—would mandate that generic injectable drugs made by three or fewer manufacturers be reimbursed based on wholesale acquisition cost. These products have been reimbursed based on average sales price, plus a 6% markup, since the enactment of the Medicare Modernization Act of 2003. Oncologists use the 6% markup to cover practice costs; however, reforming the way that oncology drugs are reimbursed has been cited by oncologists and pharmacists as one way to address shortages. The bill also would exempt generic injectable drugs made by three or fewer manufacturers from Medicaid rebates and the federal 340B drug discount program, as well as exclude brand-name drug manufacturers from paying an annual fee mandated by the healthcare reform law if the company begins manufacturing a drug in short supply. The majority of drugs in short supply are generic injectables, such as oncology drugs. The total number of active drug shortages has increased over the past year although the number of newly reported drug shortages has decreased. “This legislation adjusts how Medicare pays for medicine so as to decrease the risk of a drug shortage,” said Cassidy, who along with Harris and Benishek is a physician (See this week's story about physicians in congress).

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