Obama targets prices of shortage drugs

He also supports a bill requiring drugmakers to notify the FDA six months before any interruptions in manufacturing.

By Doug Trapp — Posted Nov. 14, 2011

Print  |   Email  |   Respond  |   Reprints  |   Like Facebook  |   Share Twitter  |   Tweet Linkedin

President Obama on Oct. 31 issued an executive order aimed at reducing drug shortages that asks the Dept. of Justice to examine price increases for shortage drugs to see if such increases violate any law.

In addition, the order directs the Food and Drug Administration to require drug manufacturers to report drug discontinuances in advance. Obama also ordered the FDA to help increase the supply of drugs by expediting reviews of drug suppliers and manufacturing processes.

"This is a problem we can't wait to fix," Obama said on Oct. 31. "The shortage of prescription drugs drives up costs, leaves consumers vulnerable to price gouging, and threatens our health and safety."

The number of drugs in shortage tripled between 2005 and 2010 to reach 178. The FDA prevented at least 99 drug shortages in 2011 by encouraging other pharmaceutical companies to take over or boost their production of shortage drugs, helping manufacturers to solve contamination or quality issues, and extending the drugs' expiration dates.

Still, more than 200 drugs remained in shortage as of Sept. 30, according to the FDA. Many are older, sterile injectable drugs, including anesthetics, cancer drugs and intravenous nutrition drugs.

Obama announced his support for a bill that in part would require drug manufacturers to notify the FDA six months in advance, if possible, about any drug manufacturing interruptions. The American Medical Association also supports the Preserving Access to Life-Saving Medications Act of 2011, which is sponsored by Rep. Diana DeGette (D, Colo.) and Sen. Amy Klobuchar (D, Minn.).

Reaction to the Obama executive order was mostly supportive.

"Addressing the issue of national drug shortages is multifaceted and complex, but the changes announced by the administration are a step in the right direction," said AMA President Peter W. Carmel, MD.

The American Academy of Pediatrics said the White House order parallels recommendations submitted by the AAP at a Sept. 26 FDA workshop on drug shortages.

Rep. Elijah Cummings (D, Md.) welcomed Obama's focus on price increases for shortage drugs. He released documents on Oct. 5 showing that five drug distributors have charged between seven and 80 times the normal prices for certain drugs in shortage.

"The idea that some companies may be taking advantage of cancer patients and others in such vulnerable positions is criminal, and we are taking action to get to the bottom of this," said Cummings, the highest-ranking Democrat on the House Oversight and Government Reform Committee.

However, House Energy and Commerce health subcommittee chair Joe Pitts (R, Pa.) said he was surprised by the timing of Obama's executive order. The subcommittee held a hearing on drug shortages on Sept. 23 during which committee members of both major parties pledged to work together. Pitts said he was waiting for recommendations from Howard K. Koh, MD, MPH, the Dept. of Health and Human Services assistant secretary for health, before proceeding further.

"I am disappointed that the administration has spent more time strategizing a press rollout to politicize this deadly issue than working with Congress to resolve the problem," he said.

If Congress does not address drug shortages through legislation this year, it might do so in 2012. The Prescription Drug User Fee Act, enacted in 1992, is due for reauthorization by Sept. 30, 2012, and could be a vehicle for related legislation. The act authorizes the FDA to collect fees from certain human drug and biological products to support the agency's approval process.

Physician practices and insurers in the meantime can help prevent future drug shortages by paying higher prices for drugs in exchange for stronger contract provisions that penalize manufacturers for not delivering sufficient drug supplies, according to an Oct. 31 report by the HHS Office of the Assistant Secretary for Planning and Evaluation, which was released as part of the Obama administration's effort on drug shortages.

The FDA announced on Nov. 3 that the agency has been expediting new drug approvals. Of the 35 new drugs the FDA approved in fiscal year 2011, which ended on Sept. 30, nearly half were handled under the agency's priority review program. The program aims to approve drugs within six months if those drugs offer major advances in treatment.

Of the 35 approved drugs, nearly half are expected to significantly advance treatments for heart attack, stroke and kidney transplant rejection. Ten approved drugs are for rare diseases such as hereditary angioedema, and an additional seven drugs are cancer therapies.

Back to top


White House plan for drug shortages

President Obama on Oct. 31 issued an executive order to address the growing problem of prescription drug shortages. The order requires the Food and Drug Administration to:

  • Require drug manufacturers to provide advance notice when they discontinue producing drugs that support or sustain life, or that prevent debilitating disease.
  • Expedite regulatory reviews of new drug suppliers, manufacturing sites and manufacturing changes when these actions would help mitigate or prevent drug shortages. The FDA should consider when implementing these expedited reviews both the severity of the shortages and the importance of the drugs for public health.
  • Submit to the Dept. of Justice any findings that shortages led drug distributors to stockpile affected drugs and charge exorbitant prices for the supply. The Justice Dept. would determine if these activities violate law and undertake any necessary further action.

Source: Executive Order: Reducing Prescription Drug Shortages, White House, Oct. 31 (link)

Back to top



Read story

Confronting bias against obese patients

Medical educators are starting to raise awareness about how weight-related stigma can impair patient-physician communication and the treatment of obesity. Read story

Read story


American Medical News is ceasing publication after 55 years of serving physicians by keeping them informed of their rapidly changing profession. Read story

Read story

Policing medical practice employees after work

Doctors can try to regulate staff actions outside the office, but they must watch what they try to stamp out and how they do it. Read story

Read story

Diabetes prevention: Set on a course for lifestyle change

The YMCA's evidence-based program is helping prediabetic patients eat right, get active and lose weight. Read story

Read story

Medicaid's muddled preventive care picture

The health system reform law promises no-cost coverage of a lengthy list of screenings and other prevention services, but some beneficiaries still might miss out. Read story

Read story

How to get tax breaks for your medical practice

Federal, state and local governments offer doctors incentives because practices are recognized as economic engines. But physicians must know how and where to find them. Read story

Read story

Advance pay ACOs: A down payment on Medicare's future

Accountable care organizations that pay doctors up-front bring practice improvements, but it's unclear yet if program actuaries will see a return on investment. Read story

Read story

Physician liability: Your team, your legal risk

When health care team members drop the ball, it's often doctors who end up in court. How can physicians improve such care and avoid risks? Read story

  • Stay informed
  • Twitter
  • Facebook
  • RSS
  • LinkedIn