Discussion Draft Considers Input from Broad Spectrum of Experts and Stakeholders

Washington, D.C. — House Energy and Commerce Committee Chair Cathy McMorris Rodgers (R-WA) today unveiled a discussion draft with policy proposals to address the drug shortages facing America. 

“America is the leader in developing innovative treatments and cures. Yet the economics of our convoluted health care system create shortages—particularly of low-cost and generic drugs—that harm patients in need. The responses to our RFI on addressing drug shortages overwhelmingly made clear that we need to address the root causes of shortages with a multifaceted approach. This discussion draft is part of our committee’s thoughtful, deliberative process to offer long-term solutions to these issues so that patients can access the drugs they need. I hope this draft will lead to bipartisan legislation, and I welcome feedback and collaboration from my colleagues across the aisle and chamber, stakeholders, and subject matter experts,” said Chair Rodgers. 

Key Details: 

• Provide Market Flexibility: Drug manufacturers that produce low-cost drugs and generics are often already operating on thin margins. Imposing restrictions in Medicaid and the 340B Program that hold the cost of these drugs at artificially low levels undermines the economic stability of these supply chains, driving many of these drugs into shortages. The discussion draft will give manufacturers of generic, sterile injectable drugs for serious diseases, such as cancer treatments, more flexibility to respond to market pressures, so they can invest in manufacturing and ramp up production when potential shortage situations arise. 
• Increase Transparency from Drug Middlemen: Increases disclosure requirements on group purchasing organizations that control bulk contracts between drug manufacturers and health care providers. Bringing these agreements to light may help cut down on arrangements where companies are incentivized not to produce drugs. 
• Hold the Food and Drug Administration Accountable and Support our Supply Chains: Requires the Food and Drug Administration (FDA) to exercise the reporting requirement authorities it already possesses, includes reporting on certain active pharmaceutical ingredient (API) metrics for generics, and establishes a pilot program for FDA to conduct preapproval inspections for new domestic sterile manufacturing facilities.
• Require More Information to Stop Shortages: Requires a government watchdog to examine how policies, like the 340B Program’s penny pricing policies and Medicaid’s generic drug inflationary rebate, interact with drugs that have experienced shortages within the past decade. Additional requirements include data analysis and recommendations from the Department of Health and Human Services related to how Medicare reimburses for certain drugs and how to protect against drug shortages, including the use of market-based pricing. 

Those who wish to submit comments or feedback can do so at drugshortages@mail.house.gov by August 25, 2023. 

CLICK HERE to read the discussion draft. 

CLICK HERE to read a section by section. 

BACKGROUND ON THE COMMITTEE’S DRUG SHORTAGE EFFORTS: 

July 18, 2023: E&C Republicans Press FDA Over Inadequate Inspection of Drug Manufacturing in India and China 

June 12, 2023: Chair Rodgers and Ranking Member Crapo sent an RFI to stakeholders and experts.  

May 11, 2023: Chair Rodgers and OI Subcommittee Chair Morgan Griffith (R-VA) convene subcommittee hearing titled “Examining the Root Causes of Drug Shortages: Challenges in Pharmaceutical Drug Supply Chains.”  

March 27, 2023: Chair Rodgers and Subcommittee Chair Griffith, and Subcommittee on Health Chair Brett Guthrie (R-KY) wrote to the FDA requesting information into how the agency is managing drug shortages.

• You can read the FDA’s response here, which notes that only 44 percent of companies are complying with existing requirements to report information on the volume of drugs made at each facility to the FDA.