Examining drug-pricing strategies, developing a contingency plan, passing pending legislation and stockpiling generic drugs were among the suggestions that experts offered lawmakers Wednesday to address the nation's drug shortage.
Lawmakers seek answers to drug shortage
At a hearing of the House Oversight and Government Reform Committee's health subcommittee, witnesses testified about the causes that have led to a shortage of life-saving drugs.
Dr. Michelle Hudspeth, chief of pediatric hematology/oncology at the Medical University of South Carolina, testified that the Medicare Modernization Act of 2003 was intended to create more transparency in drug pricing, but as a result of the law, the reimbursement rate shifted from a percentage of average wholesale pricing to average selling price, which includes all discounts and rebates.
“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 testified. “Product margins have fallen significantly for many generic drugs, leaving companies with little incentive to continue manufacturing the drug or to increase production.”
But Dr. Kasey Thompson, vice president of policy, planning and communications for the American Society of Health-system Pharmacists, testified that while Medicare reimbursement policies may be partially to blame, his group's analysis shows that quality issues in the manufacturing process pose an even greater problem. Thompson urged lawmakers to pass pending legislation in both chambers of Congress that would require companies to notify the Food and Drug Administration confidentially about any interruption in production of any product six months in advance. The early warning system, Thompson testified, would allow the FDA to communicate more effectively with manufacturers and others in the supply chain.
“The only thing I can guarantee you is, it wasn't a ‘show' hearing,” Rep. Trey Gowdy (R-S.C.), the subcommittee's chairman, said when the hearing ended. “I'm not interested in those,” he said, adding that he wrote down each suggestion that was made and will contact the full committee chairman about potential future hearings on the matter.
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