InsideHealthPolicy.com's Daily Briefing - Powered by Dow Jones· US|January 26, 2024·12:36am The Senate Finance Committee is crafting bipartisan legislation to tackle drug shortages that it says may include Medicare payment changes, reforms to stabilize the supply of generic sterile injectables (GSIs), incentives for hospitals and pharmacies to procure generic drugs based on quality, reliability and sustainable contracts, and reforms to the Medicaid Drug Rebate Program.
A framework for the bipartisan legislation, unveiled Thursday (Jan. 25), includes revamping contracts between hospitals, group purchasing organizations and GSI manufacturers. The move comes after industry experts testified at a Finance hearing Dec. 5 and pushed the idea of changing hospital buying patterns through long-term contracts that include a pay-for-performance mechanism.
Finance Committee Chair Ron Wyden (D-OR) also addressed the role of three wholesalers controlling 90% of the pharmaceutical market at the hearing, saying highly consolidated middlemen like wholesalers and GPOs are contributing to the drug shortage crisis -- a concern that aligns with that of the generic drug lobby Association for Accessible Medicines (AAM).
A major problem of the current buying system for hospitals is that it frequently relies on GPOs and middlemen to help buy generics at the lowest price, Wyden said at the hearing, which ultimately creates a “race-to-bottom” situation and leads to generics exiting the market.
Wyden and Finance ranking Republican Mike Crapo (R-ID) on Thursday provided a snapshot of the committee’s possible solutions to combat drug shortages by reforming Medicare and Medicaid policies.
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