US agencies launch investigation into generic drug shortages

US agencies launch investigation into generic drug shortages

The Federal Trade Commission and the Department of Health and Human Services said Wednesday they will examine the causes of generic drug shortages and the practices of “power brokers” involved in the supply chain.

The investigation by federal agencies targets drug purchasing centers and distributors who have been in the spotlight in recent months as drug shortages have reached their highest level in 10 years. The agencies want to examine the companies’ influence on how drugs are sold to hospitals and other health care facilities, assessing whether middlemen exerted pricing and manufacturing pressures that led to outages.

During congressional hearings last year, oncology experts testified about the effects of the shortages, describing difficult decisions that forced them to ration key chemotherapy drugs. They detailed month to month, sometimes week to week, supply shortages that posed life-threatening risks for some patients.

“For years, Americans have faced severe shortages of essential medications, from chemotherapy to antibiotics, putting patients at risk,” FTC Chair Lina Khan said in a statement. “Our investigation seeks information on the factors causing these shortages and examines the practices of opaque drug middlemen. »

In previous interviews with The Times, generic drug industry executives had expressed growing concerns about their reliance on three large group purchasing organizations for contracts to sell drugs to hospital customers and health centers. Generics executives complained that their companies sometimes undercut market prices to win big contracts, a strategy that had eroded the industry’s stability, particularly among makers of sterile injectables often used in healthcare. surgical and against cancer.

Lawmakers echoed those concerns. Late last year, Sen. Ron Wyden, Democrat of Oregon and chairman of the Senate Finance Committee, criticized “high-powered health middlemen” in the generic drug industry. Last month, he and Sen. Mike Crapo, Republican of Idaho, describe ways to limit drug shortages, focusing in part on proposed changes to Medicare payments for sterile injectable drugs.

Dr. Robert Califf, commissioner of the Food and Drug Administration, testified before Congress last year about the limits of the agency’s ability to manage drug shortages, pointing to market dynamics — such as low prices and declining – in the generic drug industry.

Shortages of chemotherapy drugs are making headlines for lawmakers and the pharmaceutical industry. Cancer specialists were forced to develop treatment guidelines recommending giving low doses to patients who had a chance of cure – and withholding them from patients with metastatic disease who wanted to live longer.

The main chemotherapy drugs in shortage, cisplatin and carboplatin, are essential in the treatment of lung, breast, testicular, ovarian, and head and neck cancers. In recent years, prices for both drugs have fallen to around $15 to $20 per dose, even as Intas Pharmaceuticals, a drugmaker headquartered in India, has gained market share.

Intas halted manufacturing of those drugs due to quality concerns raised by a surprise FDA inspection in late 2022. That led to broader shortages, which generic drug industry executives have cited as an example of how whose lower prices and winner-take-all contracts have increased the use of fewer drugs. drug manufacturers.

The FTC investigation announced Wednesday aims to determine whether concentration among pharmaceutical industry intermediaries “has deterred suppliers from competing in generic drug markets.” The agency accepts public comments as part of its investigation into shortages.

The Association for Affordable Medicines, a generic drug industry trade group, praised the FTC for trying to resolve the problem. David Gaugh, the group’s acting president, said in a statement that it was important for the agency to address falling generic drug prices, the concentration of middleman companies and the decline of manufacturing sites.

“As a result of all of this, the risk of drug shortages will only increase if action is not taken to strengthen the long-term sustainability of generic manufacturing,” Mr. Gaugh said in a statement.

The federal investigation is expected to look into the three major group-purchasing organizations that contract with generic drugmakers to supply drugs to hundreds of customers. Todd Ebert, president of the Healthcare Supply Chain Association, which represents the purchasing groups, said the companies offer competitive pricing to hospitals and other health care providers, as well as a reliable supply of drugs.

“GPOs help stabilize the generic drug market by working with manufacturers on contracts that provide them with the certainty and predictable demand they need to stay in the market,” Ebert said in a statement. He added that the organization looks forward to sharing more with the FTC about the critical role of GPOs in combating the current drug shortage crisis.

The Healthcare Distributors Alliance, which represents large companies such as McKesson, Cardinal Health and AmerisourceBergen that assess fees charged to generic drugmakers for transporting their medications, also did not respond to requests for comment.

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Eric D. Eilerman

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