Congress can and must act to help alleviate unprecedented drug shortages

Acute drug shortages are threatening the health care of millions of Americans at an escalating rate. Roughly 300 medications are currently in short supply, mostly low-cost generics, which account for 90 percent of the drugs used by patients. Hospitals are facing severe and prolonged problems securing sterile injectable generic drugs, including older chemotherapy drugs used to treat, and sometimes cure, cancer. For some of these medications, there are no other options, leaving hospitals and clinicians to ration medication or even delay care.

Congress cannot stand by and let Americans suffer. These dangerous shortages are caused largely by extreme price competition in the generic drug manufacturing market. Congress already has the power to implement short- and long-term solutions to reduce and prevent shortages. It needs to enforce existing laws to put more transparency into the supply chain and use the government’s buying power to ensure critical products are made by more than one manufacturer.

The low profitability of generic drug manufacturing has caused companies to stop making certain less-profitable drugs and makes it difficult for other manufacturers to ramp up production. When generic manufacturers experience disruptions in supply, it often makes economic sense for them to shift manufacturing capacity to more profitable drugs rather than low-margin generics, even if that results in a shortage that disrupts patient care. This pricing dynamic discourages investment in generic drug manufacturing capacity, manufacturing quality, and supply chain reliability, particularly for sterile, injectable drugs.

In a recent survey, American Society of Health-System Pharmacists members said the situation has reached unprecedented and intolerable levels. Nearly every hospital in the country reported shortages of prescription drugs, and nearly two-thirds of hospital pharmacists said shortages of key cancer drugs were forcing them to ration, delay or cancel treatments. Constant changes required to provide alternatives put patients at increased risk for medication errors.

Congress must create meaningful penalties when manufacturers ignore existing laws requiring them to report information about shortages of medications and their ingredients, and to develop risk management plans to prevent disruptions. The FDA says more than 4,000 facilities — more than half of those registered — have failed to provide this crucial information.

Congress should also require FDA to make public its unredacted inspection reports and its manufacturing quality data. Without this information, it is difficult for hospitals and health care providers to ensure they are purchasing products from the most reliable manufacturers, rather than choosing based on price alone. 

But these are short-term stopgaps for a deeper systemic problem. In the longer-term, Congress needs to change the incentives for manufacturers to invest in generic manufacturing and reliable supply chains.

The Centers for Medicare & Medicaid Services should provide additional payments to hospitals that purchase critical medications through long-term contracts with manufacturers. In doing so, the manufacturers would guarantee a supply of medication during the term of contract and agree to maintain a stockpile of drugs.

Congress can direct the Department of Veterans Affairs, the Department of Defense, the Indian Health Service, the Bureau of Prisons, and the Administration for Preparedness and Response to use their purchasing power to ensure multiple manufacturers remain in the market for certain critical drugs at risk of shortage. They could do this by spreading federal purchasing of these drugs across at least three manufacturers. This would help ensure that if one manufacturer experiences a manufacturing disruption, other manufacturers of that drug would be available to help fill the gap in supply.

Finally, federal financing is needed to encourage private sector maintenance of buffer inventories of critical drugs and their ingredients.

Americans deserve a health care system that provides reliable access to vital treatments. By implementing these recommendations, Congress can prevent drug shortages, safeguard patient care, and protect the health and well-being of millions.

Tom Kraus is vice president of government relations at the American Society for Health-System Pharmacists and the former associate commissioner and chief of staff at the FDA.