Watchdog Agency Does Not Focus On Prices.
December 23, 2011—Last week’s Senate Health, Education, Labor and Pensions (HELP) Committee hearing on drug shortages gave more insight to the Government Accountability Office’s (GAO) report on steps the government can take to alleviate drug shortage situations.The report was requested by three members of the HELP Committee, Sen. Tom Harkin (D-IA), Richard Blumenthal (D-CT) and Robert Casey (D-PA).
Noting that from 2006 through 2010 the number of drug shortages grew by more than 200 percent, the report by the non-partisan investigative arm of Congress identified “manufacturing as the primary cause" of drug shortages. According to the GAO, these manufacturing problems included shutdowns of entire facilities so they could be upgraded or suspension of production of a particular drug for quality problems. The watchdog agency said that “over half were exacerbated by multiple difficulties" after the drug initially went into shortage. The GAO gave recommendations to both Congress and the U.S. Food and Drug Administration (FDA) to improve the response to shortage situations.
Given that FDA has been able to prevent 50 potential shortages in the first half of 2011 because it learned in advance of potential problems in the supply chain, the GAO said that that Congress should require manufacturers to report to the FDA when drug supply disruptions are on the horizon. While FDA works closely with manufacturers on drug shortage issues, the majority of shortages are reported by others, like providers or consumers, at a time when a shortage is already affecting access to the drug, thus only allowing a reactive response from the agency. Requiring manufacturers to provide notice in advance of possible shortages would result in preventing disruption to critical patient care, said the GAO. The Preserving Access to Life-Saving Medications Act has been introduced in the House (H.R. 2245) and Senate (S. 296) and would grant the FDA the authority to require early notification from pharmaceutical companies.
The report also faults the FDA’s management for not identifying drug shortages as an area of importance, understaffing the office in charge of handling drug shortage issues and not developing “results-oriented performance methods" to address shortages. Further, the GAO advised the FDA to establish a database on drug shortages.
None of these recommendations were related to drug pricing or the 340B program. During the HELP Committee hearings, Senator Orrin Hatch (R-UT) asked U.S. Assistant Secretary for Planning and Evaluation Sherry Glied whether there is a link between the drug shortage problem and pharmaceutical pricing. Glied responded, “our analysis suggests that it is not a problem of reduction in price, prices are actually rising for those drugs that are in shortage. We’ve looked at information from the manufacturers as well as from public sources and those sources seem to suggest that these manufacturers see a robust market ahead of them and that price is not the issue." As the Monitor has reported, Senator Hatch, a senior member of the HELP Committee, is developing legislation that would reportedly exempt drugs in shortage from the Medicaid rebate program and 340B pricing. Hospital organizations and the National Association of Medicaid Directors have expressed concern about this proposal.
Given the recent hearings in both the House and the Senate on the topic, it is expected that further legislation intended to prevent drug shortages will be introduced in the new year.