East Idaho Times

U.S. Senate Finance Committee Ranking Member Mike Crapo (R-Idaho) and Chair Ron Wyden (D-Oregon) have unveiled a legislative proposal aimed at addressing the persistent economic issues that are causing shortages of generic medicines in America's health care system, including chemotherapy drugs and ADHD medications.

"Prescription drug shortages are fueling high prices and limiting access to life-saving treatments and cures," Crapo stated. "Our bipartisan discussion draft would take meaningful strides toward mitigating and preventing prescription drug shortages, ensuring that patients can receive the care they need, when they need it. We look forward to working with other members, experts, and stakeholders on addressing these life-threatening challenges and promoting consistent, cost-effective health care for Americans nationwide."

Wyden echoed these sentiments, saying: "It is unacceptable that America is consistently running out of affordable and essential generic medicines. Once again, monopolistic middlemen have put market power and profit over families’ health care. This proposal builds on my work to tear down regulatory barriers that are preventing families from accessing critical drugs like those needed to combat ADHD."

The proposed legislation would establish a new program within Medicare for hospitals and physicians designed to incentivize transparent, reliable, and resilient purchasing practices across supply-chain participants. The goal is to drive health care providers, intermediaries such as group purchasing organizations (GPOs), and drug manufacturers to meet ambitious standards in securing a sustainable supply of essential medicines for all patients.

To participate in the program and receive targeted Medicare incentive payments, participants must meet several key requirements:

- Minimum three-year contracts with manufacturers for generic drugs that present high shortage risks

- Meaningful purchase volume commitments and stable pricing aimed at addressing market distortions that jeopardize patient access to life-saving treatments

- Requirements for contingency contracts with alternate manufacturers to shore up competition and prevent shortages stemming from supply-chain disruptions

- Prohibitions against anticompetitive practices within the program

- Transparency around manufacturer quality control issues to improve supply-chain visibility and preempt potential shortfalls.

The proposal also includes measures to enforce against participant violations of rules and requirements, including the potential for lockout from the new program for repeat or flagrant breaches.

Additionally, the proposal suggests a change to the Medicaid Drug Rebate Program (MDRP) enabling reductions or waivers to the inflation rebate for certain generic drugs in the event of shortage risk, modeled on current law under Medicare.

This month, the American Society of Health-System Pharmacists (ASHP) announced that drug shortages have reached an all-time high—with 323 medicines now in short supply. Generic drugs comprise the majority of medications in shortage at any given time, with a recent analysis finding that 56 percent of drugs in shortage in 2023 cost less than $1 per unit. Generic injectables have proven particularly vulnerable, representing an estimated 67 percent of shortages overall.

In December, Crapo and Wyden convened a hearing in the Finance Committee to examine the drug shortages challenge through the lens of the committee’s jurisdiction. They released a white paper outlining policy options in January.