The United States government will begin investigating the root cause behind ongoing generic drug shortages that are seriously ‘endangering’ patients’ lives.
The joint investigation by the Federal Trade Commission and the U.S. Department of Health and Human Services will aim to “understand how the practices of two types of pharmaceutical drug intermediaries – group purchasing organizations (GPOs) and drug wholesalers – may contribute to generic drug shortages . ‘
GPOs are organizations that negotiate drug prices between manufacturers and physicians or hospitals – they do not purchase products directly. The groups are working to lower drug prices and lower costs by increasing how much a health care provider will purchase.
Drug wholesalers purchase medications directly from manufacturers and sell them to providers. Their purpose is to guarantee that a certain amount of a manufacturer’s generic drugs will be distributed in an effort to lower drug prices.
The number of medicines in shortages has reached a record high, forcing patients with cancer and chronic diseases to choose between waiting more than a year for their life-saving drugs or paying thousands for alternatives.
Doctors have also said they have had to ration chemotherapy drugs and make life-and-death decisions in choosing which patients to prioritize to receive potentially curative therapy.
Shortages reached a five-year high at the end of 2022, with 295 active shortages
Experts have attributed the shortages to increased dependence on foreign manufacturers, production quality issues, supply chain issues due to lack of raw materials and natural disasters and the push for more branded (and more expensive) drugs over cheaper generic versions, creating a race. to-the-bottom effect on the pharmaceutical market.
The government cannot force a manufacturer to produce a generic drug, which is cheaper, available from multiple companies and makes up 90 percent of the drugs Americans use.
Instead, manufacturers often discontinue generics in favor of their own branded and patented versions, which will help them make a lot more money.
This allows the company to create a monopoly on the drug, forcing people to spend thousands of dollars because the drug is not available from other manufacturers.
The goal of the FTC and HHS investigation is to understand how GPOs and wholesalers influence the availability (and therefore the price) of some of the nation’s most popular drugs.
FTC Chair Lina Khan said: “For years, Americans have faced acute shortages of crucial medicines, from chemotherapy to antibiotics, putting patients at risk.
‘Our investigation calls for information on the factors causing these shortages and examines the practices of opaque drug intermediaries. We look forward to receiving public input as we assess how enforcers and policymakers can best address chronic drug shortages and promote a resilient drug supply chain.”
The number of medicines in short supply increased by nearly 30 percent in the US between 2021 and 2022, reaching a five-year high of 295, according to official government figures.
A Senate report last year found that more than 15 of these drugs have been in shortages for more than a decade, compared to the average shortage duration of a year and a half.
aand a recent American Cancer Society questionnaire found that one in ten patients suffer from shortages, forcing them to use substitute medications or delay treatment.
Most of the drugs in short supply are generics, meaning they cost the patient and insurer much less than brand-name versions.
Officials hope their efforts will promote competition in the pharmaceutical industry to keep prices low and increase access to lifesaving drugs.
As part of the agencies’ request, they are seeking public input and comment on several topics related to the generic drug markets and possible causes of the shortages.
Some of the topics include: the extent to which GPOs and wholesalers comply with their legal obligations; whether the market concentration of drugs among GPOs and wholesalers has impacted smaller healthcare providers and rural hospitals; and to what extent have the entities discouraged drug suppliers from competing in the generic market.
The drug shortage crisis – which affects America more than any other Western country – has captured the attention of American politicians.
In December, the US Senate Finance Committee held a session on the issue, with alarming testimony from doctors on the front lines of the crisis.
Dr. Jason Westin, director of the Lymphoma Clinical Research Program at MD Anderson Cancer Center in Houston, said, “The absence of generic and inexpensive drugs like fludarabine (used to treat blood cancer) can literally be the difference between life and death.”
Westin added that patients with aggressive blood cancers don’t have time to wait for drugs that are in short supply – because there is often a narrow window in which patients can receive life-saving drugs.
He said: ‘My colleagues have been forced to make impossible choices, including choosing which patients will be prioritized to receive potentially curative therapy.
‘We know how to treat cancer, but shortages force impossible choices. We have medicines that are life-saving and shortages that are life-threatening.”
Experts say the US is a major factor the government’s inability to regulate profit-seeking pharmaceutical companies – unlike in other countries.
The federal government does not monitor the raw materials in medicines and does not monitor production processes that may take place abroad.
This means Pharmaceutical companies may claim that supply chain problems are the cause of the shortages, when in reality they may have stopped making drugs because they are less profitable than others.
And the Food and Drug Administration (FDA) said shortages could result from companies discontinuing older, generic drugs that are no longer profitable in favor of brand-name drugs that will make more money.
The government states: ‘Shutdowns are another factor contributing to shortages.
“The FDA cannot require a company to continue making a drug it wants to discontinue. Sometimes these older drugs are discontinued by companies in favor of newer, more profitable drugs.”
Newer brand-name drugs tend to be more profitable than older, generic versions — which make up 90 percent of the medications Americans take.
This is because new, more expensive drugs have patents that last for years, meaning it can only be made by one company, at one price.
Older drugs have expired patents, meaning generic versions can be made by multiple companies, driving down the price.
Another factor causing the problem is the U.S. dependence on key materials from China and India to produce 95 percent of the drugs used in emergency rooms.
Foreign manufacturers registered with the FDA more than doubled between 2010 and 2015.
The FDA already has limited oversight of drug manufacturing, but transferring these responsibilities to foreign entities further complicates the process because the U.S. lacks visibility into the quality of foreign manufacturing or supply chain issues.
In an effort to increase access, the FDA last month granted Florida permission to become the first state to import cheaper drugs from Canada, in a major policy change that could give Americans access to cheaper versions of drugs costing thousands of dollars cost.
While people in the United States will be allowed to make direct purchases from Canada, the decision will make Florida the first state to be allowed to buy cheaper drugs in bulk from Canadian wholesalers.