Congress holds hearing on national drug shortage

WASHINGTON — The House Oversight Subcommittee on Health Care will hold a hearing tomorrow morning to examine the causes behind the shortages of more than 200 older generic drugs that are usually sold at slim profit margins.

The shortages have caused patients to miss or delay chemotherapy, as well as to receive inferior antibiotics, anesthetics and intravenous nutrition, according to Dr. Scott Gottlieb, a resident fellow at the American Enterprise Institute.

The drug shortages have also contributed to clinical mistakes when patients received medicines that prescribers were unaccustomed to using, according to an advance copy of Gottlieb’s testimony. And it’s led to hospitals rationing some medicines, and patients waiting on long lists for key drugs.

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Between 2005 and 2010, the number of prescription drug shortages nearly tripled in the United States, according to the written testimony of Dr. Michelle Hudspeth, the division director of pediatric hematology and oncology at the Medical University of South Carolina.

“The current situation is nothing short of a massive national emergency,’’ Hudspeth said.

Hudspeth and others who plan to testify tomorrow said they believe the shortage is linked to the 2003 Medicare Modernization Act that was supposed to create more transparency in pricing. But it also resulted in the changing of the reimbursement rate for drugs from a percentage of average wholesale price to average selling price, including all discounts. The current model makes it difficult for drug companies to raise prices more than 6 percent a year.

While on the surface, declining drug prices may be good for patients and others paying for the drugs, many generics have reached “severely low prices,’’ said Ted Okon, executive director of Community Oncology Alliance.

“Faced with the prospect of diminishing returns from low-priced, discounted, and rebated drugs, the incentive to stay in the market is reduced,’’ Okon said. “This has led to fewer manufacturers producing these products.’’

The only way to increase availability of these drugs is to make it profitable for firms to invest in the manufacturing that will result in a stable supply, said Gottlieb, former deputy commissioner of the Food and Drug Administration and senior adviser at the Centers for Medicare and Medicaid Services.

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“We need to reform the policies governing these markets if we’re going to lure investment back into these important areas,’’ Gottlieb said.

“Doctors, hospitals and health care providers have brought the looming drug shortage crisis to the public forefront,’’ said Rep. Trey Gowdy, a South Carolina Republican who is chairman of the Oversight Subcommittee on Health Care. “This hearing continues to highlight the crisis while seeking remedies from healthcare experts.’’

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