WASHINGTON — The Senate Finance Committee has drafted a bipartisan bill to mitigate drug shortages by rewarding hospitals for business practices that ensure an adequate supply of drugs.
Drug shortages have been a persistent problem for years, and they’re worse than ever, according to a recent report by the American Society of Health-System Pharmacists. Shortages are primarily a problem for hospitals and doctors who regularly administer drugs, including oncologists who have been running out of common chemo drugs. Generic injectables account for 67% of shortages, and more than half of drugs in short supply cost less than $1 per unit, according to the Finance Committee.
Hospitals band together to negotiate drug prices by hiring group purchasing organizations. The biggest three GPOs are estimated to control about 90% of the market for drugs that hospitals buy. Finance Chair Ron Wyden (D-Ore.) said those GPOs can drive prices down so low that manufacturers stop making certain drugs or can’t afford to maintain their facilities, which then leads to manufacturing interruptions. Drugmakers also say GPOs can also be fickle, switching from one manufacturer to another over small savings, leaving drugmakers without the certainty they need to commit to making large volumes of product.
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