U.S. House Oversight and Government Reform Subcommittee Holds Hearing on Drug Shortages

Posted November 30, 2011

Congressional hearings on drug shortages continue due in part to continued efforts of ASCO and the medical community to raise awareness and seek solutions to this crisis. On Nov. 30, the U.S. House of Representatives Oversight and Government Reform Subcommittee on Health Care, District of Columbia, Census and the National Archives convened a hearing on the issue.

Michelle Hudspeth, MD, director of the Pediatric Hematology/Oncology Division at the Medical University of South Carolina, testified that “the current situation is nothing short of a massive national emergency” and that the shortages were severely impacting cancer care. Dr. Hudspeth also discussed why she felt the reimbursement model created through the Medicare Modernization Act of 2003 has helped lead to the shortages.

“With the MMA, the reimbursement rate moved from a percentage of average wholesale price to average selling price, which includes all discounts, rebates, etc. in the sale,” said Dr. Hudspeth. “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 six percent per year. Product margins have fallen significantly for many generic drugs, leaving companies with little incentive to continue manufacturing the drug or to increase production.”

Kasey Thompson, PharmD, vice president of policy, planning, and communications for the American Society of Health-System Pharmacists also testified at the hearing. ASHP and ASCO were co-conveners of the November 2010 Drug Shortages Summit, which brought all health care stakeholder organizations together to develop a coordinated effort and solutions to address the critical issue.

“Hospital and health-system pharmacists have been collaborating with other clinicians and members of the supply chain to work with FDA to address the problem. For example, we believe FDA should have and dedicate the necessary resources to speed up the regulatory processes that help resolve drug shortages,” said Dr. Thompson. “Other alternatives include improved communication between FDA field personnel and the drug shortages program to assess the comparative risk of public harm when a potential enforcement action will cause or worsen a drug shortage; exploring incentives for manufacturers to continue or reenter the market; a generic user fee program to speed approvals; and last, ensuring the agency has the funding it needs to carry out its mission.”

Additional witnesses included Ted Okon, executive director of the Community Oncology Alliance, Scott Gottlieb, MD with the American Enterprise Institute, and Walter Kalmans, president of Lontra Ventures.

Rep. Trey Gowdy [R-S.C.], chair of the subcommittee, expressed a commitment to the subcommittee’s continued follow-up on the drug shortage crisis. For more information on the hearing, please visit here.

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