Transcripts For CSPAN Pharmaceutical 20240703

Killed by the house commerce subcommittee on health with representatives from the pharmaceutical industry and policy stakeholders. This is three hours. [inaudible conversations] [inaudible conversations] we will come to order. The committee will come to order and the chair will recognize himself for an opening statement. Todays hearing is focus on the critical topic of finding longterm solutions to prevent future drug shortages of key drugs for patients. For months, Cancer Patients including pediatric Cancer Patients, have had to scramble to find the drugs recommended or use alternatives because of instability in the markets and supply chains. In 2022 alone there were over, there were 301 drugs enacted shortages according to the university of utah. For over a decade professions and a medical and Regulatory Community has sounded the alarm on the underlying economic causes of drug shortages. Unforeseen circumstances like a tornado hitting a pharmaceutical warehouse in North Carolina, or a manufacturing facility in india shutting down due to public quality concerns get a supply chain out of whack and potentially the shortage of what i regard. To ensure we are prepared to respond appropriate to these issues we must encourage strong investment to ensure that there are multiple means to develop, store and distribute drugs. Thats why the Energy Commerce committee is continuing extensive work to identify the drivers of why cause of the supply chain can be unstable and leaked to the shortages weve seen over the last decade. It is congress alone we an oversight hearing, artest will shortages at a hearing. The chair did a request for proposals all leading to the hearing today on potential solution to spend numerous federal agencies and players. Through this work a keeping a merge comes the economics of the generic drug market specifically Sterile Injectable Drugs must be reformed. If you want a more stable pipeline of drugs including sustained investment in domestic manufacturing. Earlier this year the New York Times wrote an article diving into the complex supply chain for generic drugs that quote there is a high cost to low prices unquote. From there the article dives into the frailty of supply chains operate at low cost with these lowcost oftentimes being driven by artificially deflated price of from Government Programs like certain medicare and medicaid policies. Even commissioner kayla agrees economics are the main driver witchy publication before this committee during a previous hearing. Thats why today will be considering a discussion draft from chair rodgers that aims to improve the systematic market failures of our truck supply chain. This discussion draft includes proposals to reinformed reimbursement rates for lowcost drugs and include new ideas to ensure that fda is a properly prioritizing using greater discretion to get more lowcost generics to the markets sooner. It also is important to note that this is only a discussion draft, and i sort expected to be a healthy discussion among all members today on this draft and other proposals to address the issue of supply chains and shortages. We are also continue actively solicit Stakeholder Feedback given the complexities of the supply chain. It is my hope, nonetheless, that after weve had our robust discussion that we will be able to find commonsense Bipartisan Solutions to shore up our generic drug market. Doing so will keep americas healthy and protect our National Security by making us less dependent on address relations for medical needs in the event of future unforeseen natural disasters. I look forward to the discussion today and our continued work to advance longterm policies designed to address this critical issue. Thank you and i yield back. The chair now recognizes the gentlelady from california the right member of the subcommittee, Ranking Member eshoo for five minutes on opening statement. Thank you, mr. Chairman, and good morning, colleagues. And witnesses. Today is an important day. After months of pleading by the democratic members of the subcommittee, we are finally having a legislative hearing on drug shortages in our country. In july, cancer drug shortages delivered get punched the patients unsure if their survival odds will be undercut. The fda repor over half of the y impactful. Longterm structural factors caused drug shortages including high concentration among manufacturers swings in consumer demand, complex Manufacturing Processes mismatch pricing. Today we will discuss i proposals that attempt to address this crisis. First, my drug origin Transparency Act addresses manufacturer concentration by providing the fda with the information they had repeatedly said they need to identify where critical drugs and active pharmaceutical ingredients are made to prevent shortages. Second, the bipartisan drug shortage prevention act by representative jacobs of california requires manufacturers to inform the fda if there is a sustained increase in demand for a drug or ingredient. Next, the ensuring access to lifesaving drugs by representative slot can of michigan at and the patient s to urgent use pharmacy compounding act like representative Morgan Griffith of virginia attempt to mitigate shortages by allowing drugs to be safely used after the Expiration Date or through pharmacy compounding. Pilot were considering chairwoman rodgers longawaited proposal to stop drug shortages act. The subcommittee delayed action on the drug shortage crisis during the spring and summer with the promise of legislation that comprehensively addresses the issue. But i believe this proposal mostly studies a problem with more reports. Where the proposal is actionable policy, i think its a grab bag of talking points. It weakens the 340b program and chips away at the Inflation Reduction Act by excluding certain manufacturers from the inflation rebate. The proposed inflation rebate policy is understands the market failure that caused drug shortages. Many of the chemotherapy shortages were caused by manufacturers choosing to drop their prices in it and sustainable attempt to gain market share. So ill get forward to working with my colleagues to ensure that any final package to address drug shortages contains policies like my pediatric cancer drug supply act of 2023, which i will introduce in the coming days. This bill establishes a program at hhs to create a longterm contract for the manufacturing of essential pediatric cancer drugs to ensure there is a consistent sixmonth supply available. I i look forward to finding a bipartisan weight to create a pool crack a proposal that thoroughly addresses the threat that drug shortages posed to our nation and its patients. And with that, mr. Chairman, ideal expert the gentlelady yields back. The chair to recognizes the chair of the full Committee Chair rodgers for five minutes for her opening statement. Good morning, everyone. Good morning and colleagues. Thank you, everyone for being here to address Bipartisan Solutions to a longterm decades long challenge around drug shortage there weve all heard the heartbreaking stories about children and others that are struggling to get the medication that they need as a result of drug shortages. I visited Providence Sacred Heart Medical Center including pediatric oncology in their Childrens Hospital over the August Reagan heard firsthand how shortages resulting a difficult decision to conserve and prioritize supply, reevaluate treatment plans for some patients and identify alternative therapeutics when possible. The task before us today is to examine the drug supply chain and try to better understand the root causes of drug shortages so our Healthcare Providers and the patients that rely on them are not having to change recommended treatment due to a lack of supply. I appreciate the witnesses from across the drug supply chain being here today to help us better understand the problem and provide feedback on the proposed solutions, in the new ideas the committee should consider. Over the last year energy and commerce has committed itself to examining drug shortages that hit a ten year high earlier this year. May 11 of this year the oversight and investigations subcommittee held a hearing were a panel of expert witnesses testified to the underlying market failures that make it harder for patients and Healthcare Providers to get essential medicine. In june of this year i issued a request for information alongside senator crapo two additional stakeholders regarding drug shortages. The robust comments we received highlighted the complex challenges facing lowcost generic drugs, which make up more than 90 of the drugs dispensed in this country. Stakeholders submitted comments regarding the consequences of consolidation in the drug supply chain and how belowmarket federal reimbursements for such drugs can make it difficult, a difficult market even worse, leading to a lack of investment in manufacturing and supply chain. Less than a month later i released a discussion draft to try to put specific Solutions Forward to address these broad concerns. Our goal today is to pursue multifaceted and longterm solution that address the root causes of the shortages. Again where hearing from people from across the supply chain to examine this issue. According to fda commissioner caliph, quote, the economics of this are not favorable were fixing the problem the way it is currently working. This committee has a chance improve the economics for these drugs, potential for something more on showing and making sure patients have access to the drugs that they need. The challenge is how to appropriately target the incentives and relief from existing government price controls. I hope there will be a robust discussion on a best to do that. The discussion draft focuses primarily on generic sterile and injectable drugs for a serious disease or condition in getting these drugs out from under mandatory 340b rebates and deflation penalties. We require cms to launch a a l that test market base pricing policy for these drugs in medicare as well. A discussion draft also look into how we can bring transparency to current contracting practices through new 340b guidance and disclosure reporting for Group Purchasing organizations. Fda plays a role as provisions in the discussion draft and of the bills noticed today indicate. However, i do not believe fda authorities would solve these issues, and in some cases i think fda may play a role in worsening a shortage through unclear communication. Im also concerned fda may not look domestically for production before turning outside the u. S. During a drug shortage. I look forward to a robust, constructive dialogue about the policies noted today and a potential unintended consequences, any additional ideas, and im hopeful we can Work Together in this committee to come together on a number of discrete proposals to tackle and turn the tide against these drug shortages. Its clear that each shortage is unique and is not one solution that will address all issues. Thank you. I yield back. Thank you. The chair yields back and the chair will recognize the regimen of the full committee, mr. Pallone for five minutes for Opening Statements for thank you, mr. Chairman. I am pleased that after months of refusing to work with democrats to address the drug shortage crisis, the republican majority has finally called a hearing to discuss legislative proposals to address this serious ongoing problem for patients. Democrats put forward three of the bills notice for discussion in hearing today or in consideration of the all hazardous for curtis act, or pahpa. We want to meet of the act because experts including doctors providing care on the front line told us drug shortages are an ongoing emergency for the patients and a threat to National Security. They also told us the democratic bills could up help address e crisis patients are facing i i providing to authorities to the fda. Unfortunately republicans refused to work with us to include these policies in the pop up reauthorization and instead have pursued republican only built that slashed Health Preparedness funding and a difficulty passing the house before pahpa expires at the end of this month. After nation was unprepared of worst pandemic in a century, its inexcusable that republicans have failed to learn the lessons of covid19 and have refused to properly invest in public Health Preparedness. This family is putting american lives at risk, and then just after gaveling out of session for the august recess, republicans finally put forward ideas to address drug shortages. Unfortunately many of the proposal in the republican discussion draft that actually be two more drug shortages and increased profits for the pharmaceutical industry while raising costs for consumers. I opposed many of the policies in the republican discussion draft because i simply do not believe they will help in the drug shortage crisis. In fact, i think it will make it worse. Thats not the approach democrats want to take. Over the last month weve been highlighting our efforts to expand the middle class including by making drugs more affordable under the Inflation Reduction Act. For the first on the Inflation Reduction Act allows medicare to negotiate the prices of drugs for seniors get is a 2 2000 2000 cap on outofpocket cost for drugs in Medicare Part d and prevent huge price increases by requiring Drug Companies to pay a rebate back to the government as the rays drug prices faster than the rate of inflation. Every republican vote against lowering drug prices, and now theyre trying to eat away at the Consumer Protections that democrats created. The republican discussion draft would about some Drug Companies to raise prices on consumers faster than the rate of inflation without paying a penalty to medicare or medicaid. I am deeply concerned this proposal could unintentionally provide an incentive for Drug Companies to keep drugs in shortage or near shortage longer periods of time in order to raise drug prices on the american people. While its true Market Conditions affect manufacturing and supply issues, two major causes of the drug shortage crisis, the republican proposal to simply allow drug copies to raise prices is not the answer to the problem. In stark contrast to some of the misguided policies in the republican discussion draft, the democratic bills before us today our common sense and take significant steps to better secure our supply chain pier we should know where our drugs and the critical ingredients are being made so when a drug shortage or other supply interruption happens, fda and manufactures can react properly. Ranking member eshoo legislation the drug origin Transparency Act would require Drug Companies to report the sources of active pharmaceutical ingredients to fda and include the source of api on a drug label. We should be ensuring fda knows the earliest possible time when a surge in demand for drug is likely to cause a shortage, and that is exactly what the bipartisan bill introduced by representative jacobs and meals will do, and we should make sure were not needlessly throwing away safe and effective drugs that could be used past the shelflife date. The ensuring access to lifesaving drugs act will help address that by requiring manufacturers to report the fda on the longest possible shelflife of the drug. Im interested in more from our panel and am hopeful that we can find a bipartisan path forward on these drug shortage policies as patients and providers are facing life altering consequences if we dont do more to address this critical problem. With that, mr. Chairman, i yield back. Thank you. The gentleman yields back that we will now move to witnesses opening save us. I will introduce each witness and they will call on your individual. Ill introduce the witnesses as a panel at the first before us is Michael Ganio consumed correct the pharmacy practice and called for the American Society of Pharmacy Professionals. Mr. Todd ebert presidency of Healthcare Supply Chain association. Mr. Chip davis president and ceo of Healthcare Distribution Alliance. Doctor melissa barber, postdoctoral fellow at the yale school of medicine, yale law school, ngo collaboration for regulatory rigor integrity and transparency. Mr. Allen koegel, Senior Vice President of Public Policy civica, and dr. David gaugh, interim president and ceo the association for accessible medicines. As each of you will have five minutes for your opening statement. I think you come some have testified before but you will have a yellow light and you get close to the end of the formers and a yellow light and then when the red light we would ask you to wrap up if you havent finished to get to final thoughts and they will get to questions and will have some discussion and talk. We appreciate it and first i will recognize dr. Ganio for five minutes for your opening statement. Thank you, chair guthrie, Ranking Member eshoo and distinguish member of the h. E. L. P. Subcommittee. Thank you for the invitation to join todays hearing that the American Society of Health System pharmacists alleges association of Pharmacy Professionals in the United States. Our 60,000 members, pharmacist, student pharmacists and pharmacy technicians on the frontlines managing drug shortages in hospitals, angular clinics, commencing from his and other Healthcare Settings. Ashp has garnered National Drug shortages for over two decades. We click public reports of drug shortages from clinicians, patients and caregivers. Through a partnership with universe of utah drug information service, ashp maintains a good shortage that includes both active and resolve Prescription Drug shortages. Shortages are added to our database on after the team at the University Utah has thoroughly investigated the shortage and confirm details with manufacturers. We provide practitioner focus resources to help the Health Care Committee managed truck shortages. As of july 2023, ashp and University Utah were tracking 300 active ongoing drug shortages, the highest number in the attack it. Most of these medications are lowcost generics and many are still still interactive products use in clinical settings. We conducted a survey of face hp members of the 99 of our responders are struggling with drug shortages every day in hospitals and Health Systems. 57 reporting rationing chemotherapy drugs or canceling or delaying Cancer Treatment. In recent years the drug shortage, has escalated into a crisis that threatens our nations healthcare security. Clinicians with less than 20 years of practice rates have never known a world where drug shortages did not exist. Basic critical medications like sterile water sailing and other electrolytes are chronically in short supply. Clinical data show worse outcomes when patients were switched alternative treatments that are less effective have or have more side effects than the preferred drug. Medication errors attribute during shortages resulting patient harm and even death. Shortages can also force clinicians make heartbreaking decision to which patients receive prioritize potential lifesaving treatments in which she received an alternative. The burden of managing shortages is not only on clinicians and patients a a face frustrating shortages of Prescription Drugs like epipens, amoxicillin and Blood Pressure medications. Currently patients who depend on adhd medicine are up in their life monthly is look for the next prescription for the following month. The causes of truck shortages can range from Raw Material Availability to natural disasters disrupting infrastructure. Most often however shortages are caused by manufacturing delay or declines in manufacturing quality and the root causes behind these declines come from a lack of incentive to produce older generic drugs was slim Profit Margins and from a lack of Market Recognition of manufacturers who invested more reliable supply chains and better quality systems. The current shortage is caused by deficiencies of protein manufacturing at an overseas facility. However, these problems are not limited to foreign manufacturing sites. In 2018 manufacturing deficiencies at a domestic facility resulted in severe shortage of injectable opiate medications that were used in hospital to treat pain and to save, sedate patients in intensive care unit. The Current System of fda approval and pastel inspections does not provide purchasers with any distinction among drug products other than price. This overly emphasizes the cost of drugs in purchasing decision to contribute to the race to the bottom generic drug prices. Because purchasers do not have way to identify manufacturers with strong quality systems, there is no financial incentive for manufacturers to invest in quality management. Providing transparency through reporting of critical information while not purchasers to select from reliable sources of generic drugs. Ashp supports efforts to expand domestic manufacturing but this will not reduce shortages if it comes at the expense of reliable foreign suppliers. Manufacturing diversity and redundancy are needed to strengthen our supply chain and prevent drug shortages. Without the president of production at destruction either domestically or abroad can result in severe shortages. Weve seen recently with hurricane marias impact on puerto rico in 2017, and most recently a tornado the recently had pfizers North Carolina facility damaging 40,000 pallets of finished materials. Ashp has developed and published detailed recommendations to reduce drug shortages that would be submitted for the record. The current status of drug shortages is untenable and we look forward to working with the subcommittee and congress and of the policymakers on if limiting solutions to solve the problem. Thank you. Thank you. We thank you for testimony. The chair now recognize as mr. Ebert for for your opening statement. Good morning, chairman guthrie, Ranking Member eshoo, and distinguished members of this subcommittee. Thank you for the opportunity to discuss the Important Role of traditional healthcare Group Purchasing organizations in bithynia mitigating truck shortages. We appreciate your efforts to examine this pressing problem, and we look forward to continuing to work with congress and all stakeholders to preserve Patient Access to highquality care. I have 44 years of experience as a registered pharmacist and i seen firsthand the impact of drug shortages on patients, and their families. As a former ceo of a national gpo and now as the head of the Healthcare Supply Chain association, i have also witnessed the great work that healthcare gpo is due to mitigate and prevent drug shortages so for the patiente timely and reliable access to a trip to the medication may. We serve as a source at contracting partners to hospitals and longterm care facilities, surgery centers, clinics and other Healthcare Providers throughout the country. Gpos lower cost per patients, providers, medicare, medicaid and taxpayers gpo does not have to provide a position to focus on their core mission which is providing firstclass patient care. They are voluntary, flexible and clinically driven. And partly, gpo stick a copy his approach to sourcing and contracting that not only counts for the Competitive Price offered by supplies but also the quality, reliability and the stability of supply. We recognize that Market Conditions change. When they do gpos work with suppliers to adjust contracts. Gpos all the work to overall number of suppliers including encouraging new manufactures to enter the market. Gpos create a vigorous competitive market both among gpos and suppliers. Many Healthcare Providers maintain membership with more than one gpo at a time and can shift the purchased from one gpo contract portfolio to another. Purchase outside a gpo contract altogether. We appreciate the subcommittees interest in increasing transparency across the supply chain. Gpo is already adhere to robust transparency and reporting requirements by gpos to the members and upon request to the government. As the community has noted drug charges placed advocate restraint on hospitals, Health Systems Healthcare Providers and their patients. The fda identifies manufacturing Quality Control issues as the primary cause of truck shortages. Along with production delays, lack of Raw Materials and supplier Business Decisions to discontinue product. Drug shortages are antithetical to the gpo business model. Without sufficient product or suppliers, gpos are unable to provide the services. We are committed to collaborate with Healthcare Providers and suppliers to bolster the resilience of the Healthcare Supply Chain and to ensure that patients and providers have reliable access to the drugs, products and services they need. Hsca and a member gpos appreciate the full Committee Chair recognition of the Important Role of 503b 503b compounders facilities which are crucial for acute and nonacute care providers that we can support increasing flexibility for 503 become pounders to mitigate and prevent drug shortages. We are concerned about section 305 and for one of the stop drug shortages act discussion traffic these provisions will add significant Administrative Burden facing americas Healthcare Providers and exacerbate access challenges for crucial medicines, particularly among small and rural hospitals without addressing the drug shortage crisis. In addition we are concerned section 307 will change the asp definition and discourages suppliers for merger with gpo does it we respectfully ask that these three provisions be removed. Solving the drug shortage crisis is a complex task. We have submitted a number of substantive recommendations that will help prevent and mitigate drug shortages, several of which build upon existing congressional authorities. Those recommendations are included in our written testimony. We appreciate the opportunity to provide our comments and appreciate the subcommittees willingness to learn about e gpo industry and how we work and how we work to prevent and mitigate drug shortages. We look forward to continuing to serve as a resource to congress and all stakeholders and i look forward to answering any questions that you may have. Thank you. Thank you. The gentleman geodes back e chair now recognizes mr. Davis for five minutes for opening statement. Good morning, chairman, Ranking Member eshoo, as well as all st members of the committee for my name is chip davis, im the president seal of the Healthcare Distribution Alliance and dont have hd and a members we think the opportunity to show the pharmaceutical to should be shot industrys perspective on this important issue of drug shortages. Let me begin by applauding the efforts of this committee to examine this issue. Do we great drug shortages deserve attention the support changes that allow us to preserve the strength and efficiency of the pharmaceutical supply chain while simultaneously tackling this issue. As a result of that our comments today will focus in the following areas. First, the role and belly of the pharmaceutical description industry. Second, the world distributed in mitigating and managing drug shortages. And third, our take away from the committees discussion draft that has been referenced that was shared last month. The straightest road are the backbone of the pharmaceutical supply chain we handle approximately 94 of the medicines that are dispensed in the United States. Our members find the safest and the most efficient ways to get products to work patients need to. Our members work every day to connect approximately 1400 manufacturers to over 300,000 sites of care on a daily basis, and sometimes multiple times per day. Our members are logistics experts that deliver over 11 million products on a daily basis and they do it while maintaining a 0. 6 net profit margin after taxes. Distributors demonstrated the full capability during the covid19 been driven by distributing vaccines and therapeutics as was expanding capacity to support specialist requests and partnering with our critical partners and farms in hospital customers as a prioritize patient need. All distributors stepped up to serve patients our communities and her country by working collaboratively to ensure the safe and efficient distribution of critical medicines and supplies. Simply put, drug shortages occur because the available supply does not meet demand. We are vying with the fdas definition of drug shortage. We know that multiple definitions out there which the fda defines as a time when the demand or projected demand of all versions of the commercial available drug exceeds the supply. Due to our unique Vantage Point in the supply chain with upstream partners and dembski partner providers we see the issue of drug shortages as highly nuanced. Categorized by both supply driven and demand driven shortages. Unfortunately there is no single solution that will resolve or prevent truck shortages. Supply driven shortages occur to the extreme disruptions while the man driven shortages are caused by a sudden medical searches in which demand outpaces supply. Distributors support overall supply chain resiliency as a strategy to manage supply chain shocks without significant disruption to patient care. When considering a supplier, distributors consider supplier reliability, quality, historical patterns, and Business Practices in addition to cost. When shortages occur distributors employ multiple system to mitigate the disruption and equitably distribute products to demand forecasting and constant monitoring of supply help our members maintain inventory to meet demand. When prolonged shortages occur, distributors look for alternative sources and if demand outpaces supply, distributors employ what we were to as their share allocation programs to ensure that all downstream customers have equitable access to whatever product is available. While drug shortages continue to strain the supply chain theres also a countervailing pressure as his commandos to constantly reduce cost. The discussion draft includes a thoughtful policies to address supply chain shortages. We support recommendations that encourage competition and supply chain continuity and to avoid the potential to worsen existing shortages. We support the proposed medicaid rebate kaffir specify generic drugs and we encourage cms to give preferred formulary position to new generics and biosimilars when they enter the market. We also support the proposal to enhance Domestic Production and provide incentive for u. S. Based manufacturers to address challenges such as continuing manufacturing. There are multiple positive policy recommendations in the discussion draft. There is a provision regarding the neighboring Bona Fide Services fees that mr. Ebert refer to that we also believe would have unintended consequences and could actually unintentionally exacerbated existing shortages. The Bona Fide Service Fees that manufactures a distributors underwrite the physical movement through the supply chain of the product. These fees Cover Services such as as a safe and secure storage and handling products, costs associate with cold unit ultracold chain storage, angela become automated Inventory Management systems to process orders, and select an package shipments to document report requirements for regulatory agencies such as the fda, the cost of transporting more than 11 byproducts every day. Our members take a significant risk on behalf of manufacturers and that he structure allows them to perform these activities. We applaud the committee for the admiral efforts to address drug shortages and a loop 40 to answering your questions today. Thank you. Thank you. The gentleman just back in the chair now recognizes dr. Barber for five minutes for your opening statement. [inaudible] good morning. Thats a bit better. Chairman guthrie, Ranking Member eshoo and members of the subcommittee can , think that invitation to testify today. I liked reflect my own views and neither does my Employer Organizations with whom i work. Drug shortages are symptom of a deeper problem of adult drug market. Injectables, im sure more often than others. Shortage not every shortage is equal targets for some products having compensated, the study found one third of pharmaceutical ingredients and reduced in u. S. Government by single facility and remain by this facility. Theres things we dont know. First, we dont know what is recorded as 59 the database did not have this cost and manufacturing not obligated by detailed information in order they audit. When we have data and secondly dont know how many there are for a given they are and how much they have is critical to understand examples and focus on my Research Global pandemic like covid19 reached an interruption will supply chain. Given what we know about shortages and humility on what we dont know, i urge the subcommittee to address root causes and shortages. This increases drugs and shortage. Theres little evidence this will be impacted. And those companies that have not made investments to improve qualities nevertheless this inflation. More targeted measures should be more effective. Exemptions where there is clear evidence for external event outside of this control rather than underinvestment or financial incentives and conditions reimbursement. Finally, theres no single addressing or shortages. The first step the agency drives shortages cost launched by the fda to be reconvened as a single place of possibility and coordinate efforts. The court is an understanding it is industrial policy. United states is no stranger to targeting this policy especially for industries for National Security or the economy. 39 billion to adapt research and manufacturing. Stabilizing prices this policy only policies and say its too important to prevail with them and to solve that. And manufacturing. Congress must pass comprehensive measures to address the market. Thank you for your testimony. You are now recognized for ten minutes. Members of the committee, thank you for the opportunity to speak with you on the present issue on policies. My name is alan and Public Policy and specifically to address the shortages nonprofit and ended more than a decade and shortages recognizing the market is not complementing a different approach is required. The mission is to deliver affordable supply of essential medicine. And offers five years custom membership is growing in more than 80, 140 million and we have completed construction at the stateoftheart manufacturing facility in virginia. They were chosen by hospitals because they are in shortage or at risk of shortage in the old low cost used in every hospital everyday. Its a different approach from the traditional generic supply chain. Supply contracts that add stability to market and target and maintain six months of inventory of every just to ensure continuity in the u. S. First whenever possible. It was every one of those. Reviewed analysis and the resilience of this approach and federal policy changes to help and shortages and they must be understood as a Building Permit outcome deterrent system without change going to get worse in the years ahead. The immediate cause for every one of those drugs mes than a cup of coffee. This produces ability for manufacturers to invest quality and newer facilities and pushing production offshore and lowwage orchids and proliferate and it is less consistent. Pharmaceutical production ramps up, one leading to market shortages likely even if there are other manufacturers. Policy responses to reduce shortage includes measures for inventory and in short generic injectable drugs and we need to create markets and manufacturers less likely to have quality problems and domestic manufacturing. Written testimony domestic range of policies in detail how Like Congress should have targeted investment to ensure highquality u. S. Manufacturers already developed and approved by the fda ready to go into production as soon as production starts. As discussed in more detail and costeffective mechanism to create u. S. Manufacturing. Thank you again for the topic an opportunity to be here and i welcome your questions. Appreciate your testimony. Thank you Ranking Member. I want to protest going today and pharmaceutical products and Patient Access to effective generic medicine. Medicines make more than nine out of every ten prescriptions and provide enormous cost savings and 408 billion in 2022 alone. These savings of of his. The ability of manufacturing. Portfolios and resources to counter and the supply chain consolidation. This Price Inflation has been driven by consolidation generic organizations need and across the United States. The fda approvals, every approval. 60 of those approved never take it in the market. The downward pressure created by harmful favored nation and i purchased can result in unrealistically low prices. If unchecked, consolidation and integration created unstable market for the lowest cost medicines onesided terms of maximum pricing pressures but no certainty on the price or volume you will get. To help ensure sustainability we believe congress, fda and update the generic drug and medicaid to allow inflation penalty and the Inflation Reduction Act. The exemption for inflation and the formulation information from the fda. In short the drug plans encounter and encourage the use of new generic similars. In the program to exempt his generics for the ceiling price of generics. The shortage staff to engage Regulatory Affairs office of compliance during the inspection planning and debrief process. Improved transparency regarding application for inspections and enhance expedited inspection resolution pathway, review shelf life Extension Programs for products in critical supply or shortage in streamlined regulatory process to expedite this. Like to say ive seen this issue that nearly every stage. Im a registered pharmacist and Hospital System director pharmacy, a gpo director of conduct and lead a business for the generic manufacturing. I am aware of the multifaceted plant and was rooting for many the supply chain. Remains committed to working with policymakers and patients and the committee and Healthcare Professionals and provide effective challenges required to improve sustainability and ensure patients and access. Thank you very much and ill be happy to answer any questions. Thank you, that concludes witness testimony and we will now begin questioning. I recognize myself questioning and thank you for your testimony. My good friend Ranking Member and we are not here, we all want a cheaper drug and access to the drugs needed supply and demand that leads to rationing and my friend talked about his friends in the medical Community Choosing child Cancer Treatment, this is serious for us to be here and we are not to one of china, to an answer on how we solve this problem. We have provisions of the bill has other things moving forward and we wouldnt be here if the system was working. This is not just North Carolina, weve had hurricanes in puerto rico but this is a systemic problem failing to address the problem and we need to address the government involved in this greening lower price so we talked about drug shortage to better understand this and government reimbursement challenges, could you talk about how the average calculations affect the shortage . America, get question with a long answer so if you look at the entire spectrum with you are talking about the distributor or gpo or retail structure, it different in each one so when i ask is that i can come back to this committee, this drive through all of these issues out the because not one pricing issue, you cant fix all pricing issues with one, this is not one out there. Thank you for that and we look forward to your response. We seen a lot of people leaving the marketplace and the supply chain in the automotive world. Contacted oem or automotive producer to get the product, i got to my product and my product are not obligated on this. Im obligated to deliver the product. It seems like we are having people contracting deliver products based on negotiated price, thats just from the supply chain factor. I know with the wholesalers weve had feedback already in the bona fide service fee, can you clarify about concerns you have with the provisional . This is a discussion we are trying to solve a problem and we are interested in your concern moving forward. I will be brief. I would say we respect the fact that this committee and others over the last several years have focused a lot more on the entire supply chain. They have begun to question about the channel by different stakeholders. As ive said, they are legitimate fees and i reinforced that because i distinguish access fees. They are charged by significant High Percentage list that impact decisions either in the Insurance Market or hospital setting. We charge for legitimate fees required in has to be fair market value, regulatory buying the fair market value and a nominal percentage of the risk price of the product. Our concern about shipping flat rate would be again, we dont know what would be in the manufactured every single one of our contracts. If i am in automotive supplier negotiate that to love i put it in and i cant deliver but im held accountable for that, is that one of your contracts. Our contracting process is an open and fair competitive process. When contracts are developed, the entire process is one in which manufacturer is included in the entire process the final contract would be part of the entire process where they understand the deliverable and at the same time the expectations for our customers. Is not ready, my time has expired but hopefully we will have a chance. My time has expired and i recognize gentle lady from. Thank you to each one of you. I found your testimony to be highly instructive. I think your model is fascinating. I think the first in the country, the model youve established, in the coming days im going to introduce the pediatric cancer drug supply act. It will establish a program to create a sixmonth stock of the schedule pediatric oncology is included as part of any plan or package to help address drug shortages so i want to ask, do you support this proposal . Yes, pediatrics are available population and they are off label. There are already your options but i would that provision and expand that to the Central Medicine we have seen heartbreaking shortage. Its been months mimic the heartbreaking part of these are durable and would save my. Exactly. Thank you for that question. We have all learned drugs to the sort of this and what we have found is the has to be so the worst case would be all the product outdated and expired editing absolutely it would be valuable. What is the policy that should be part of this . Needs to be tied to purchase commitment for the drug. How would longterm all contracts and the generics and the deductibles market. Not just nonprofit manufacturers but you can imagine predictable demands and ability to invest in these facilities and you know you are in long run but you dont know you will have market share next year, you cant build that up and invest in quality. In advising our committee, what are the top three things you believe should be included in legislation to address what we are raising, placing so many patients in our country who are high risk . Specific to pediatric cancer . Yes. Ensuring an effective inventory to your following the older stock that has to be tied directly to demand so it doesnt expire. Then he carefully, a pediatric cancer drug or adult cancers and how we navigate that. Then thinking about how we do it as the government needs to pay as a way to make a market for that inventory. Doctor barbara, what is your research into generic injectables while the relationship between price and potential for drug and shortage very much. It is a competent story. My research particular looks at markets for upstream ingredients for which it is important and low prices seen are in part two a race to consolidation. What research shows, i will show you what the fda has been and they found for drugs and shortage price increases after and the prices are not less likely. Price is a factor. My time has expired and i will yield back with my things to all of the witnesses. An important hearing in the work we do, the words we write walk right into peoples lives. We have to get this right. Thank you, mr. Chairman. The chair of the full committee on. Thinking to all of the witnesses being here this morning on this important issue. I want to ask about reimbursement issues we see with inflation rebate and the impact on the drug market. The drug is in the and the price was up to a dollar. Thats over 10 increase. Penalizes country for any increase in prices for inflation. Do we really want to penalize that manufacture for nominal increase . Think of the question and the easy answer is no, we do not want to so we go back several years and look at the intent behind the rebate system around brand products, generic products that so if you look at a brand product that sells for 1000 and 9 , 10 increase is significant. If you talk about something going for a dollar or less and youre looking at a 10cent increase as a penalty, it continues lower and lower. Do you believe exempting drugs with multiple manufacturers for medicaid and inflation for the lectures . Yes. Thank you. Is the inflation penalty condition going to target this class of drug . Are there other drugs necessary was still subject to inflation penalties . Thank you for that question. The definition in the draft now may leave out the important drugs among local anesthetics and it probably would qualify for the threshold. Also look at lowcost drugs, some have rebates between ten to 80 and you can imagine its hard to have a margin prices at that level so setting that threshold rebates and penalties would be helpful. Another question, the rebate exemption is similarly targeted you talk about 340 feet and how they affect the market drugs often and shortage. We participate in that like any other manufacturer and as i said for lowcost drugs, that can be significant erosion of margin which makes it that much harder to deliver product so when we look at generic spending is healthcare spending, 1 in total so reducing the rate unnoticeable within the context of this program. If one of your members have a contract, a new entrance manufacturing outside at half the price, do they lose the contract or is there certainty of the direction of contract . Contracts are typically three year contracts at a set price and estimated volume day one you signed, that is good for day one. Volume estimated so you you are never guaranteed and if the new price comes forward, typically 48 hours to match that price or you lose the contract. If they lose the contract and likely continue to make the drug . Depending on how many contracts are out there. It is a limited number of contracts to go to so most often they will jump inventory and move on to another product. I visited a generic manufacturer in my district and a lot of red tape to navigate including state licenses and building facilities that help. There is a provision and expedite inspections in advance of the application filed a moment the application is approved it can go forward. My time has expired but i will follow up with more questions regarding the process of trying to get manufacturing plants permitted in the u. S. The chair yields back. As i said in my opening statement, im concerned the puzzle focuses on raising prices for drugs without doing anything to require drug manufacturers to take action to address drug shortage so what effect would allowing Drug Companies to raise prices for inflation preventing or addressing drug shortage . Thank you for your question. Using the rebate exceptions for new manufacturers because they are not incentivized to invest in voting and building resilience for the supply chain. In two cost and margins and increased are not well targeted for the aim of supply chain investments. That is a lot of contextualized of the Government Accountability office for dozens of drugs for more than one 100 so yes, it is important to ensure prices and are sustainable healthy margins but we need to be aware prices are increasing. I have two more questions and i think you kind of answered. Basically no lower drug prices is not an increasing shortage so maybe explain a little more how you came to that conclusion. Could you see a scenario where they may have the incentive to keep it in order to raise prices without penalty . What it has to do with. How did you come to the conclusion drug prices are not associated with an increase in shortage . New york going to be very careful with the words associated, its not strongly associated. These are not my conclusions a piece of findings by the Accountability Office in a place to the root cause of shortages and there is manufacturing issues existed so they can be oracle weight around and encourage a subcommittee to ensure in terms of extra payments make sure they are tied in outoftheway. The answer to your second question asking whether or not the companies have their shortage as an economist, i have to insert. I wish i lived in a world where this was unimaginable but theres evidence given the Opportunity Companies will create artificial shortages for their benefit. For example in italy, competition in 2016 asked him to intentionally under supply to strengthen negotiations by creating artificial shortage. The courts ruled conclusively there were not a result of shortage and they plan to destroy the didnt get the higher price for demanded. Im trying to get one more question here. There seems to be in agreement there is a problem with api. Both republican discussion where that api is a product where its coming from. One key different it requires companies rely on one manufacture for 50 of other supply chains so what steps should we take improve the overall drug supply chain . Can you tell us whether it makes sense to require certain drugs to report on that api . It doesnt make sense and the thing we should focus on for drugs but when we think about the drugs we need, or are they . Theres no systematic modern, we dont know. The most essential question, how the factors are there . And cannot be answered. I hope one understanding of the urgent need for this production to your monitor these and compel manufacturers to share detailed information manufacturing issues. It is a global problem and i urge vigilance not allowing to can help. Its a problem if there is only one antibiotic whether its in the United States, china or india. On the scale of these populations, we need more. Thank you. Thank you. The gentleman yields back. Thank you, mr. Chairman. Price controls have come up the other areas of economics, the pricing can reduce availability, is that something you have encountered . Thanks for the question and you do find instances where that has occurred, absolutely. It comes up because i went to a Community Clinic and talked to a doctor take care of primarily uninsured, lowincome, uninsured nations and concern was there will be less availability and lower cost products because they are going to be eliminated. His concern . Belongs to International Group called International Generic medicines in the conference we had last week that statement similar to what youre making was made and that is prices are down very low but the drugs are not available when they get to the lower level. And that is a concern because we see more reliance i dont mean for this to be political but more of a lion reliance on Administration Design we are going to limit your expense on this. All good until there is no more about product and the is a serious problem. Let me ask you about, we had some complaints earlier before this hearing that we were not tackling these problems, does sca have existing authority to prevent shortages . Thank you for the question, this gives me the opportunity to commend the work of the shortage, they can from a nominal work. There may be our deficiencies the cares act in 2020 what we are talking about today, there is no Enforcement Authority in the fda doesnt have the authority to recall on their own and they are voluntary. So let me get back to what seems to always occur with me, has there been internal analysis of the fda what they have right or wrong and how do we avoid mistakes from the past . The only way i can get into that was an inner agency for police the number settings lack of quality whether there is internal role i can answer. And 2019 for the prepandemic, Gennadi Gerasimov share any sense about will be a separate issue we can work on another day. How is the fda working to ensure the drugs and quality standards and what can be done to further improve transparency to ensure providers have the tools they need to ensure their patients . Thats the root cause talking about, how we can sure they have the information to know they are buying from reliable supply chain. There are other third parties that have proposed this and i know the pos are looking at the we need to find a way support manufacturers this is the only information we have access to, it reinforces that and we are buying the cheapest product we can because of calculations that these are not payable so of course they are incentivized because there is no recognition for the. Let me ask another question, i will ask to respond, the written question, i do reference in your opening remarks, we have trained consumers for several years you can find something, you go online and get it. There is a risk going online to buy adderall because could come from someplace youve never heard of and it may not be here out of all it could be placed with fentanyl and thats a real fist. Absolutely, anything online is a discussion we can have for supply chain vulnerabilities. I thought it was important to underscore that so think youll. The doctor yields back you are recognized for five minutes of questioning. Thank you so very much for holding this hearing and i want to thank the witnesses for your insight and your opinion today. Ive said in this committee before feeling to provide a clear picture of pharmaceutical supply chains dire consequences quickly to address the problem our hands tied behind our back, republican colleagues on the other hand brought forth a proposal that clears the way for unchecked price increases to raise costs for consumers and nothing to alleviate shortage. Not only is this an appropriate solution to the problem, it will limit access even more. In a previous hearing i asked set of the medical oncology what would be the most helpful to avoid and mitigate shortages . The responses clear, expanding the ability to know where they have active pharmaceutical ingredients is critical. This has been affirmed by experts stating issues and delays in sourcing, largely to blame for the current shortage. Drug shortage issues are obligated Market Forces at play but lets build consensus around proper reporting and information structures to allow monitor and anticipate these shortages. Most important, lets not forget why this matters and whats at stake. We are talking about the lives of every american. Almost a third of pharmacists say they have had to ration or delay treatment because of the shortages. This means victims are ill Cancer Patients who cant wait let alone weeks or months to get treatment. This can be increased sickness for over 30 common cancers. We need to intervene quickly playing with price points of drugs is not the answer. To consider when making these decisions. Dusan of that . Yes, we rely on these important proponents, one who have identified number two is quality, we are keen analyzing the aspects of the person pharmaceutical companies. Information is better as it helps us make better decisions to we encourage fda projects programs discussed or others that give more information and we work with members relative to their input and it is extremely important more information is better and the final piece is the supply, thats important as well and we are using personal aspects to develop stronger contracts for suppliers to work with customers. The Group Purchasing organizations distributed and how might having the ability support shortages avoid similar situations in the future . The visibility we have pretty limited to get as much as we can and we will see if they are out there but a lot of that is redacted. The good thing is we have members with a lot of experience and let us know issues with their products they use and you to look at your supplier and both with quality. We are looking and seeking more information and that is very important to us. Developing a strong supply chain line is important to us. What kind of notification process is in place so Healthcare Settings can anticipate shortages and providers can put out guidance and why is it important to fill these systems . Is critical to build the systems and we dont get a lot of notice of shortage and you often find out when it doesnt come in with your order. You order again if it doesnt come in, then we hear of a shortage and then we investigate. Information we are discussing is critical in anticipating shortages difficult but there are predictive exercises being done. For example, looking at old ability and that can be improved with more transparency and post are things we can use as providers to develop a plan. Thank you very much, my time has expired. Thank you to our witnesses for being here today. In the United States we should be not facing shortage crisis. Tools and manufactures and resources in Rural Communities in my district patients and Hospital Leaders have spoken with take matters into their own hands and use creative ways to overcome these shortages. There is not a Silver Bullet to address these issues. Dear companies as part of the application, yes or no . Yes. And they inspect the facility, yes or no . Yes. I know these programs are concerned and reviewed by this committee, does this program influence the drug market . If so, what can be done to address the impact . It does influence the market. Every hospital has the purchase power to buy under these contracting so prices and Price Reductions occur on the contract process and its continued lowering price of the product. So what can we do to address this impact . Theres a couple things, number one, we look at the pricing and there is 14 reduction under that. The 14 reduction could be removed in areas of drug shortage that require facility your general for an additional 14 off it could raise the ceiling on the generic drug prices. Thank you. Recently working on reauthorization drug use including speeding up the generic drug. The fda process influencing the drug market, the potential to impact manufacturing ability to bring it to market . In our third iteration and in both cases we have had major advances in each section and found that a ten year clock on the approval process and tight metrics and in general they are making that mark so we get approval or complete response letter that we can turn around and respond to, additional months for review and approval. Contracted manufacturers in have had a large impact, is it typical for commercial wholesalers contract with multiple manufacturers to ensure Business Impact and character an issue with these product . The answer is yes, if you look for this, i know the focus is on generics but also recognizing our members perspective and negotiations look very different but if you look at the balance of our system and the branded side consider safety, efficacy and cost to get on the generic side, safety has essentially been removed historically back to the mid 80s so the reality, our members are forced to negotiate with manufacturers simultaneously to building resiliency to protect against shutting down. To your members briefly who were contractors for generic medicine . The reality is particularly an era of increased shortages looking at well beyond historical reliability and ordering patterns for existing relationships have been insured in certain areas and they are looking at the length of time recognizing greater stability. Mr. Chairman, i yield back. As we have heard from experts, a critical shortage of medication we need to action. Emergency medicine physician, its always been my top priority to improve Patient Access to highquality affordable healthcare. We have made strides for the school but these efforts are believed if we cannot ensure supplies of medication patients desperately need. In the emergency room ive witnessed firsthand patients medications have on patients. Patients suffering from infection and trauma or fighting against cancer or needing to be debated, its a matter of life and death. One factor we have identified thats contributed our manufacturing shortages. These issues stem from drug manufacturers in the United States and little regulation reporting to the fda. We need to target efforts addressing these problems which are the source of supply problems to better prevent shortages. Current shortages are vital due to these manufacturing challenges and the urgency. We must increase transparency and manufacturing and increase responsiveness to prevent further shortages in the future. We need to expand manufacturing and put reporting mechanisms in place for transparency to ensure safe medication to secure Patient Access for Affordable Care they need. As we saw with the recent baby formula shortage, lack of transparency and limited manufacturing capacity leads to negative outcome. One of the most effective medications made to bolster domestic supply and production of medication . To increase . Culture supply and production and medication. Its all about the expense. We have what we call a blueprint and in that blueprint we talked about bringing reduction back or expanding production and that will look at we are now up against if you will, foreign entities that are lower cost but competing for a higher price when you look at the contract so it looks at potential release if you will, of grant and also on the backend of price points in the actual contracting in the u. S. Because you are still competing with Companies Offshore in not process. Thank you for addressing these solutions. Going to urge my colleagues to support especially the drug shortage prevention act addresses concerns from today when they experience periods of increased demand to the fda can step in and respond prevent a looming drug shortage so thank you and i yield back the rest of my time. The gentleman yields back. I will now recognize Richard Johnson from ohio for five minutes. Thank you, mr. Chairman in the morning to our panelists. Today we are looking at how congress can address an issue impacting every single corner our society from oncology drugs and formula to adhd and generic medications it in the current drug shortage restricting care doctors can provide in reducing quality of patient care nationwide. All this reduces the quality of life for all americans. Some cases parents are concerned about sending the children off to start another school year without medication they need and doctors are substituting Cancer Treatment because they are unable to access preferred treatment. Any first world country, especially United States wholly unacceptable. Im sure each member and tell a story of someone they represent not being able to get the prescription filled or having to change Cancer Treatments to go around and shortage of a particular drug thats why the hearing today is so important. We need to fix this and we need to fix it now so many of our drug shortages are caused by quality problems. Why do your members unable to invest in more manufacturing facilities less likely to have quality issues . Thank you for the question and that question and the process around it, we dont believe is a totally true statement. Weve heard the fda say that as well. We do fully invest in facilities and add new equipment and lines, building new parts of facilities so it is a combination of fda inspection processes and the actual facility so as i said in my opening statement, we think there should be an important process for drug shortage staff in the fda works with office of Regulatory Affairs and compliance as we go through to make sure it is an object not subject process. Today contact gpo contracting processes play a role the stability of the generic market . They do. All right. I heard he mentioned that fda does not know where api made for generic drugs. Do Generic Companies tell fda who their players are as part of drug generic process . They do. Can fda inspect those suppliers . They can do. Okay great. Mr. Davis, what do your members do when there is a shortage and they dont have enough inventory on hand to fill their customers orders . , they decide how much each customer gets and how do you mitigate and manage drug shortage . I would answer in two ways, the first thing is they want to define the scope of severity of the shortage and they do that through regular communication, active medication with manufacturing process and providers. Often times we have to define whether or not it is supply driven and it often does look different. The biggest thing is once confirmed, they will put their providers in the call allocation and soften the algorithmic formula to make sure everybody gets a portion of what they like some known cause without. Continuing, it seems distributors are in a unique way because of the interaction the supply and demand side so disturbed communicate when they see a potential for shortage coming . Is the fda leaning forward reaching out to you when they see potential shortage . Access to therapy in the august recess i had those who met with a number of doctors to discuss these ongoing shortages and what was particular to me was fda saying we got a drug shortage for the hospital themselves, a drug shortage of 500 drugs simple things like lidocaine and steroids and people that cant you do Something Else . A baby in intensive care dropped whats needed and what is available, the larger amount will kill them. People are dying because of this. My michigan colleague is leading the insurance access to lifesaving drug access which i believe would be a meaningful step forward, legislation would empower the fda for drug manufacturers to extend drugs and shortage based on sound data to ensure we are not the next discarding products. Can you share how extending the longest supported Expiration Date could help address future shortages . I had a hard time hearing, extending the Expiration Date . Share how extending the longest supported Expiration Date could help address future shortage. Thank you very much. The Shelf Life Extension Program does exist, it was established in 1986 by the u. S. Department of defense by the fda and has the beat of the importance of these programs demonstrated the value ensuring access to medicines, it would be one example for this is obvious as this one in terms of shelflife, they are not incentivized a maximum safety and the only reason we know insulin is stable for longer than we realize is because of the aftermath drug company says actually heres data, its seybert to use for a longer period of time and that was further expounded on by a Nonprofit Organization so that change of history benefited many people knowing they can use their drug safely so we have less waste and more access. Unlike this nature, 3793 empowering the fda to work directly with drug manufacturers, republican discussion includes a onemonth extension exclusivity for a drug the extension is conducted. Granting an additional month of exclusivity for shelf life extension study a productive way to mitigate the effects of drug shortage . Absolutely not. Added cost would be significant and extending by a month and revenue for analysis at six months the benefit of 134 million receiving this exclusivity. One month would suggest average 21 million so it is reported its only about 360,000 so thats maximum, its not addressing shortages and theres a better used to target these. I will have questions about compounding and submit for the record, ive only got a minute left. I will ask you, your members do and there is a shortage and they dont have enough inventory on hand to fill the customers order . How did they decide how much each customer gets . How do distributors use allocation to manage shortages . Thank you for the question. They do use fair share allocation with the goal being to make sure everyone of the customers gets some percentage of what their order would have been otherwise informed by a number of things. Obviously realtime communication between the Prophetic Community and jupiter and also historical ordering pattern as well as forecasting when a shortage might come, it will become offline. People are getting the medicine they need. In a fair share allocation, providers marketing fully what they requested but instead of making sure some get all and some getman, they allocate best they can. Im out of time so i will submit questions for the record but going to reinforce the obligation to address this crisis because its real and people are dying. The gentle lady yields back in the chair recognizes a group of five minutes. I am pleased to see my bipartisan bill Patient Access to urgent use compounding act is included in todays list the same efficient pathway for Patient Access and compounded medication when there is urgency or drug shortage. The bill has support for many members, especially my friend who is herself compounding part. 2020 fda guidance to allow pharmacies and other approved entities to compound mitigation to respond urgent use and drug shortage. During this guidance there was zero adverse drugs from 503 a and this would create permanent path for pharmacies and expands political approach to be included not just fda shortage, since, more local or regional and it is important. Expanding shortage definition to include drug shortage identified will help capture a wider group of drugs facing shortage. This is much more nimble than the fda shortage list. It is not only important but timely do to a plan and North Carolina. The cost drugs to go on shortage and it would help mitigate some of the shortages. Let me address questions people have not yet verbalized that i know are there. How do we protect against the compound Company Problem . This was a criminal after producing medication, sterile injectables and they created the process of being lax, their own form of fungal meningitis and killed dozens of people in my district. As part of that, as a result of that, this committee did oversight work and conduct the fda has not done their job. Not getting proper oversight as state or federal, we change laws and more scrutiny. We can never completely protect society from the criminal connector and thats why we need our agencies to be prepared to step in. Particularly problematic because they said we must up. Fda continues to think they didnt do anything wrong but they did. The state of ohio and colorado informed that there was a problem and they wanted a nice case to bring action all presented with a box and a bow. That is not the way it works. Sometimes you have to take the chance and this is what our agencies need to do and each witness i think what agreed, if you see somebody creating a problem, warnings from the state of colorado, you probably ought to take action even in you end up not getting afflictions but you save lives. I give an example you see somebody who swerves in the road may not a dui. And they did not stop that and they looked like they were doing something wrong. And you find out the person is just not paying attention, maybe you move on but if you find the problem before it happened. I believe this bill will help us with drug shortage and believe we have taken without prior passing to prevent another but for those who want the world to be perfect, i cannot promise that we will have this doctrine cannot promise the state agencies were charged with medications brought into their state to do their job and cannot promise you the fda will not act negligently but it is a good bill and i hope we pass it. I yield back. The gentleman yields back in the chair recognizes you for five minutes. Thank you and im glad this committee is dedicating time to ensure patients can access the medications they need. I am disappointed we did not include policies to respond to drug shortages in the context of pandemic preparedness but i hope the committee will get to the on another day. I want to thank our witnesses for testimony as you explained drug shortages are driven by multiple factors and require. And 340b is a program with any relationship with drug shortages does not skyrocket drug use or prescription. A very real factor contributed to the drug shortage and manufactures off this crisis. We can and must pursue a better approach and mismatch between supply and demand. And making up around 90 of prescriptions in the u. S. They also make up two thirds of drug shortage at any given time. Thats why i was proud to introduce Bipartisan Legislation to increase transparency for manufacturers to bring it faster. I am introducing Bipartisan Legislation represented for the lower cost medicine act which would ensure generic Medicare Part d formula are available for seniors. Can you describe how these proposals addressed generic drug shortages . Yes, you are trying to expand the access so that is another Customer Base if you look at that from a manufacturing view. The problem still the contracting process between the manufacturer and patient. So there is that in between that still needs to be addressed. Thank you. Are there additional policies the committee should consider to specifically support lower cost similar drugs . And mike testimony and talk about sustainability and i will go back to what i just said, the in between so between the manufacturer and patient and the selling of product talked about earlier but as a patient i go to my pharmacy counter and no i have to pay a copay 10 for that. There is more behind the insurance that my manufacturer got and that needs to be researched further. The minute and a half i have left, is anyone else who has anything on how we can lower the cost . Anyone want to comment . No . Thank you very much, thats very important. When drugs come up, they have cost by 99 is 95 . Two low so the two things, we are talking about a lot of numbers. Isabella 50 okay . We should know the cost so we can then build appropriate margins. The second thing terms of this, i think there have been many actions recently in terms of competition. In generic suppliers so i think competition regulation is an important element, thank you. Great. Thank you. Thank you for your leadership on this, the modern framework of the balance in the ecosystem, the lowestcost generics review, if we dont have a system where one competition comes to market, it is less expensive for the patient and you can rigidly ask why to begin with so we are supportive of making sure is it comes to market, there put in positions to ensure that level. Thank you, my time is up and i yield back. You are recognized for five minutes connect thank you for the panels testimony today. I have concerns about the shelf life extension act today, it seems anytime for any reason for manufacturers to conduct studies to lengthen the shelf life of a product and turn the studies over to the fda is civil or criminal penalties. My understanding is manufacturers are ready collaborate with fda to discuss Expiration Date of. In last years package, guidance on how to conduct shelf life extension studies supported but we have yet to see a draft from this administration. Could you comment on how stability data is currently generated and whether extending would reduce drug shortages . Requiring these indicate shortages, what our current for extended shelf life . Injectable drug typically comes to market with the shelf life of two or three years. Much beyond that, you start to get concerns you will get breakdowns so going beyond that is not desirable. Manufacturers do the study prior to first making the commission and they continue to conduct studies on an ongoing basis as they go forward. So if the market is working well and the two or three year shelf life, its not expiring on the shelf. It is not the driver of the problem we are discussing today so if the government is looking beyond three years on a product, probably what they should do is by the drug and do their own study but otherwise the shelf life really well right now. Thank you very much. Next question, can you provide specific examples of products where it could go into shortage based on other price and why . We have had reference to that for drug selling for 88 cents of file. Its doosan surgery and seizures and it sells for less than a dollar of file. Its been in shortage, on the shortage list for 15 years and its pretty hard to buy an empty file for under a dollar. I think that illustrates stability in the market for a complex product that level. There are other drugs for nausea and cancer going for well under a dollar. Its not in shortage now but a price like that, there will be some they probably so it is relatively easy in one sense to predict shortage, the best predictor in the future is whether the drug shortage has been in the past so looking at the portfolio, which ones are low cost and which have been shortage in the past and a strong priority but we need to invest. Thank you for the answer, appreciate it. One more minute. How has the generic drug market changed over the last five years. And you speak to generic drugs getting approved and marketed as well as recent bankruptcy announcements by companies . If you believe drug shortages are approving or getting worse over the next year or so. Thank you for the question. To address all about at once, its getting worse and will get a lot worse so foreclosures, we know a company that closed in march and had to recall 75 products. Six solesource products and if you look at the number of manufactures between 250 and 350, thats what we are able to value but its more like 3150 companies. Of those, the approval process, 60 of those approved never make it to market because there is no market to go to. So they would typically dump the product and launch another product that can lead to a shortage. Thank you for the direct answers. Thank you for holding todays critically important hearing. Providers and patients have the most recent wave of shortages. Providers and hospitals from the effects of covid19 pandemic and several financial burden and back strain around our attempt to fulfill the patient needs. Many patients received the treatment regimen or delayed treatment altogether to impact motility and mobility. New vaccinations to attend i despite lack of transparency about drug supply and drug manufacturers has a critical factor. A lot of the focus today has been on generic injectable drugs, is there any reason we should limit demand notification to only genetic injectables or should this apply to all . Thank you very much for this question. Talk about generic drugs because they are the drugs that are more likely to be in shortage than other drugs. Id like to encounter this on the one side some of said we dont have access data but on the other side, it is reported. The issue is reporting the source of api, we dont necessarily know the original source. For example, i may any lecture a drug in my api from a company that can buy it from another company so you may have a situation where companies are manufacturing a product and im from the same two companies in the same single fauci so if you look at the mapping, we be there some companies that we dont actually know that and for drugs, we found they are oftentimes only a Single Source so wanted to clarify that so thank you. Thank you. Some of the testimony today, the fda is getting data on drug shortages under current law, no garment for shortages or spikes and demands. Today hr 3008 preventing drug shortages act would change that. How can notification help address drug shortages . Right now the fda is receiving reports but as we saw an increase in demand for other antibiotics, that increase in demand for the Drug Shortage Team will will the signal it would be beneficial they have supply issues and does not refer to fda and an increase in demand to get the fda work notice that something is out of balance maybe there is a supply issue somewhere. And in addition the program is rolled marginalized the Broader Community they do not otherwise have it financially sustainable. I have facilities in my district in illinois to provide quality healthcare to those in area. The program contributes to shortages, did you see any evidence of this . We are unable to to find this program or drug shortage. I can tell you injectables are about 7 overall purchase volume and if you look specifically at drugs and drug supply, they make up for some of the of price savings. Where michael panelist said the 1 would go unnoticed and they provide care for underserved patients. Thank you so much, thank you for your response. The gentle lady yields back. The chair recognizes doctor joyce for five minutes of discussion. Thank you for appearing here on an important topic. Over the august break, i heard from Healthcare Providers in my district as large as you pfc smallest individual practices about the acute shortages of both classrooms. We all recognize this issue with the potential to cause delays and care for patients which are ultimately detrimental to the outcomes specifically when it comes to treating cancer. It is important today in this hearing that we are working on both shortterm and longterm solutions to these issues. As i fear, they will not be going away anytime soon. I like to thank my colleagues representative griffiths, carter for their work on the use of pharmacy compounding to help solve some of these issues nearterm. These shortages are not a new phenomena and calls for decades of poor policy decisions that have all about generic manufacturing capacities. One of these occurred in 2015 with bipartisan budget act applied a rebate, inflation penalty to generic drugs. A significant difference while the penalty was originally established in price increases for branded medications in the market have exclusivity improperly also applied to genetics. As you have seen in the press as of late we talked about one Company Going bankrupt. Other companies talking about reducing their Portfolio Products so they can write size their business and that is what you are seeing happening because of that. Companies have decreased their portfolios and unfortunately, some others have ultimately become bankrupt. Correct. Other factors included, but, yes , that is part of it. Over 90 of the drugs they are paying the penalty on did not receive a price increase and they are even paying the penalty on drugs when the price was lowered. Can you walk us through how that would occur . Difficult for him to walk through two minutes and 13 seconds that i have left. Yes, that can happen. You did not increase your price. The overall price of that particular product category came down and yours appeared to go up it does not make financial sense. Or even maintain keeping the lights on. Finally, can you please explain how the inflationary rebates included in the Inflation Reduction Act could further erode manufacturers ability to invest in manufacturing improvements or even simply in keeping the facilities up. Thanks for the question. Those rebates are just added expenses, if you will, tim a manufacturing company. Everything else you are doing, the api, the finish dose production process, keeping the lights on, if you will and then when you go to get your contract and the additional inflation reduction is another penalty added into that. Do you feel that the Inflation Reduction Act harmed the responsibility for manufacturers to continue supplying the needed generic drugs . It can in the future because we are not quite there yet as we should be implemented, yes. I think all of our witnesses for testifying here today. Mr. Chairman, i yield. Thank you. The chair now recognizes the next for five minutes of questions. Thank you very much. Thank you all. Before this life i was a healthcare attorney and i represented different times of Prescription Drug manufacturers. Drug manufacturers, pharmacy benefit managers, hospitals, physician groups, pharmacy. As a result of that, i gave up a long time ago thinking i would ever be able to understand drug pricing. And that situation gets worse by the day. A number of you have commented on the lack of transparency, the need to get more data at our collective fingerprint tips. The agencies need to have that data in order for us to get better results. A whole variety of things including managing drug shortages. Doctor barber, who benefits from lack of transparency . Right now . The most . In this last chain that is being described here today . Thank you for that interesting question. I do not really want to scribe intentions when we are talking about markets and how it is the first step. If you look at it objectively, governments need to negotiate when patients have the access drugs and cannot afford them. One party is blindfolded. They do not know how much drugs cost to be manufactured. They do not know how much margins would be necessary. They do not know what profit margin is fair, in terms of incentivizing market entries, but not resulting in wastage or expenditures. One side knows the other the other side does not. A lack of transparency benefit in the industry. I think the fact that we still have so, that it is still so paid there so many black foxes in the system, even though the interest in this area is as high and as intense as it is, is evidence on its face that somebody is trying to hide the ball which makes it difficult for government acting on behalf of the public and our constituencies to get the right solutions here. You talked about the fact that raising prices alone certainly is not going to solve the manufacturing shortage on the generic side and without other strategies, it will not solve the problem of quality and reliability. Can you talk about that a little bit more and how you would structure, lets call it investment, not just pricing, but investment to ensure that the dollars flow towards quality and reliability and that the system can be further gained at that stage. So that you still have manufacturers contributing to these shortages because of the quality and reliability deficit. Thank you very much. A very important point. Prices, the prices are too low and manufacturers cannot compete you raise a very important point it is importance we get value from money. Rather than just wholesale allowing higher prices. So, the things that i proposed in my written testimony im happy to follow up later. They are ideas. I would recommend pilots. For example, enough money by the supply chain and then that rating to be incorporated by payers to adjust reimbursement and a similar way of the value based modifier to provide the services provided. Another option is we could have them required data around supply chain quality and resiliency. And then adjust reimbursement to that. The cmi should be given flexibility witho from congress and provide public evaluations to such approaches towards longterm implementation to effectively address drug shortages. Thank you. Should there be more Companies Like yours . We are not trying to replace the traditional industry, but i think theres a role for our model to help solve problems. Thank you. I yield back. Recognizing mr. Carter for five minutes for questions. An extremely important hearing. I would be remiss if i did not thank you for the opportunity to speak to your Group Earlier this week. Thank you for that and thank you for being in our district. Appreciate that. Folks, we all know what is going on. 240 drugs in shortage. Cancer drug to tylenol. This is something that has got to be addressed. I do not think it is any coincidence. It is been mentioned numerous times during this hearing. The coincidence that we have a sharp rise in consolidation in our Healthcare Industry with a shortage of essential medications. I think that that is more than just coincidence. In fact, i think it is one of the reasons why, as you know and all of you know, 80 of the market right now is controlled by three pbm spirit three benefit managers control 80 of the market. That, to me, is a big problem. We need more competition in that area. Weve also seen an increase in hospital consolidation. We have seen them merge since 1998 and 2021. As a result of that we have 2000 fewer hospitals than we did at that time. Consolidation is concerned. When we look at the gpo and the distributors, we see just three companies controlling almost 90 of the market. In markets like this, this consolidation is posing significant problems. Especially when according to some reports, and you have seen just like i have, that for every 100 spent on a generic drug, 44 go to a middleman. Goes to a pbm. Can you comment on the consolidation within your respective industry and what impact it has had . Thank you for the question. There has been consolidation in the industry. If you take a look at the database that is out there, it does identify that there are a number of opportunities for pharmaceutical manufacturers to participate. That identifies over 150 entities in the gpo, if you will , market space. National gpos as well as other regional cooperatives that participate in that arena. Those include a number of organizations that work for gpo s, but they do their own contracting. It is quite flexible for them to contract on their own and at the same time, there are opportunities within the gpo contracts for them to buy on their own. Opportunities, but im not sure it is that easy to do. Well, there are appeared opportunities and they are relatively, you have to work at it, there is no doubt about it, but at the same time other organizations such as the department of defense, large Hospital Systems are contract. Other organizations such as pharmaceutical distributor source lines programs. Right. Oncology gpo spewed a number of opportunities to do so that they should be able to access. Okay. Mr. Davis, i will ask you the same thing in your industry. What kind of impact has consolidation had on the availability of essential medicines . Thank you for your question, congressman. We are in an industry that has experienced consolidation but in the last 16 years only aware of one significant level of consolidation within our membership. We do as you know have three very large scale members. What we would refer to as regional distributors. I would like to just address one thing specifically. We have heard in the policy debate a business debate someone said if you dont get a contract with one of the three largest distributors, it really compromises you. I can assure you many of whom are either predominantly exclusively focused on Drug Distribution that there is a distributor market that is waiting for you and if any generic manufacturer needs information on they can call me and i will put them in touch. What do you think about consolidation among purchasers of generic drugs. Has that led to any unsustainable low prices for manufacturers which in turn leads to drug shortages . From our phone viewpoint, yes, absolutely. 60 is approved by the fda and they dont make it to the market because there is not an outlet to go to. Right. I hope all of you saw the article in the wall street journal earlier this week about generic drugs should be cheap but insurers are charging thousands of dollars for them. I dispensed a bunch when i was practicing pharmacy about the price of it being almost 6600 yet now you can buy it as cheap as 55. The pbms are charging 6600. They are gangsters. This is robbery. Thank you, mr. Chairman. I will yell back. Thank you. Recognizing the doctor for five minutes of questions. Thank you, mr. Chairman. Thank you to the witnesses. I really enjoyed listening and learning firm the conversation today. A reference i am a pediatrician. I have gotten notifications about drug shortages for years. I will tell you, this year, it is a first where ive been getting stopped at supermarket, on the street, at the gym with people telling me that they cannot get their chemotherapy drugs. They are getting 80 of the dose parents telling me they cannot get their childs adhd medication. That is pretty disastrous. Both academically and if you have a young driver appeared these are important medications. The Cancer Center is in the greater seattle area. They are having to delay stem cell transplant. These are not expensive drugs, but they are necessary precursor to a transplant. We have heard today from all of you about relieved the nuance and complexity of drug shortages and what is at the root of them. I think, though, we can all agree in this room that it is really never going to pencil out economically for American Companies to invest millions in manufacturing medicines like amoxicillin, lidocaine, saline, sterile water. And, yet, they are indispensable and used every single day and doctors offices and hospitals. I want to just float an idea out this is inspired by operation work speed. On top of a beautiful collaboration between federal government and industry. It the risks the procedure. If you are successful we will contract to buy a certain amount of this medication. I just wonder if there is a role in manufacturing medications. What i am imagining, i will have some of you comment on this, could the federal government stand up and sort of a generic manufacturing facility . It is open to any manufacturer who is willing to make whatever drug is in shortage at that time the university of washington at Something Like this for scientific innovations. Very expensive machinery is here you can come in rented and reserve it and do your research and then taken back to your private company. I am just thinking that this may be a way. It is funded by philanthropist which makes me, on the broader scale a little nervous to depend on charitable contributions. I think the federal government could have a role here. We incentivize in some way the manufacturing of these medications. And companies can turn a profit without having to make major investments. I am just going to for fun start he has had some experience here. Go to doctor barber if possible. Mr. Goff, for your comments. Pace yourselves, two minutes left. Thank you for that question. One point of clarification. The capital came from philanthropies and hospitals. The organization is self sustaining. I want to clarify that about the model. To your point, where could the capital come from to start an enterprise like that . I think government can absolutely be a part of the solution. In particular look at categories of drugs we dont make in the United States anymore. Penicillin and other antibiotics , for example. Many of which are on shortage. Todays prices, no commercial enterprise that could invest the capital to create a new manufacturing facility for those drugs in the u. S. If we want them here for supply Chain Security or National Security, it will take some kind of partnership. Using lowlevel antibiotics, we have got to have amoxicillin. Okay. Next doctor barbara. Thank you very much for this great question. We have immense resources and 400 scientists on staff that include, that are working to improve manufacturing to make them more efficient. The u. S. Has capacity to manufacturing critical trials. The capacity as they are. I do support a robust public auction. I have a long history in the United States. A state owned company, the great state of michigan, manufacturing for decades. I believe no members on the subcommittee but the new York State Health department display area antitoxin. The state of california is exploring public manufacturers insulin. It is not a future dream that we can have public manufacturing. It should be expanded. Thank you. I have to yell back because of time but i would love to answer. Thank you. Yielding back. The chair recognizing for five minutes for questions. Thank you. It is a pleasure to see pharmacists on the panel today. Now you know i am a pharmacist. We have had drug shortages for as long as i have been in practice. That is over three decades. It is critical that Congress Work with stakeholders and federal agencies to find solutions to the problems. That is where i have stepped in many times over my career as a compounder to deliver those strikes and we had shortages. Whether it was to facilities or to physicians, patients, whatever. There has been a lot of talk about the sourcing api. The fda were cresting from congress new authorities mandate that drug manufacturers and re packagers include information regarding the original manufacturer. Unique facility identifier and on the label assessment. But, it is also my understanding that the fda already has access to this information as a result of various regulations and reporting requirements. I recently sent a letter to the fda commissioner posing a number of questions to better understand the fda legislative proposal so that we can Work Together on a potential workable solution. Mr. Chairman, i have unanimous consent to submit into the record a copy of this letter. Okay. Thank you. I think it is in a particularly important point that the discussion grant and especially hr 167 which is Patient Access to urgent used pharmacy compounding act. Many people do not know what compounders view appeared for the fda, we have been divided into two different facilities. 503 a for traditional, 503 d for outsourcing facilities and some 2 of prescriptions compounding and these are customized medications. Patient specific needs. Written by a prescriber. We use all different modalities to fill that gap in healthcare. 5038 compounding pharmacies which are traditional provide individual physicians prescribed drug products designated for patients. And they are primarily regulated by state boards. 503 b drug products produce outsourcing facilities and they are produced and are readily available for ambulatory hospitals and other Healthcare Systems. And they are regulated by the fda. Our main discussion today includes flexibilities 4503 b outsourcing facilities to help fill that gap and also adding flexibilities with guardrails for 503 a facilities to provide urgent use of drug shortages to these patients. You know, you tell me if you agree because lack of access is a Patient Safety issue. Do you agree . Shake your head yes or no. Do you also agree that a delay in providing a medication can cause patient harm. It does. It does. So, that is why i support this bill. And everything that we are doing on this committee. Mr. Conkle, you are talking about your facility and petersburg is at a 503 b facility . No, maam. It is a facility that will approve manufacture fda approved drugs. Okay. You have to go through the whole process and all that. Okay. In your view, what should be our National Strategies for the ability to predict and prevent drug shortages . Thank you for that question. I think that we can look at a variety of data in terms of market consolidation, quality history and so on. The strongest predictor is a past shortage. If we go down the list of essential drugs and look at which ones have been in shortage over the past decade or so, that gives us a pretty strong risk indication of whether risk is going forward. I said providing 80 drugs today. On the drug shortage list right now. Quite possible to predict the ones that risk. They have more complete list of drug shortages and even the fda does. You know as well as i do being a pharmacist, we have seen drugs on and off list for 1015 years and someone said earlier. Why is that . Do you know approximately how many drugs are currently in shortage over the past five years manufactured or source through api primarily from china and india . I do not know that number. We know overall a substantial share of the world supply of api comes from those countries. Over 90 . I know my time is up. So i yield back. The chair lady yields back. Recognizing miss stringham for massachusetts. Thank you, chair. Thank you to the ranking number as well for holding this timely hearing. I am pleased that there are some bipartisan bills to address drug shortages included. I am disappointed in the approach from my colleagues discussion and hope they work with democrats to introduce a package that takes a more sustaining approach towards addressing drug shortages. Many of us heard the police back home for us to address this issue. We have heard from parents whose kids cannot take their adderall prescriptions to help them focus we have heard from constituents mothers and fathers cannot access the appropriate chemo drug for them causing unnecessary side effects. Shortages have disrupted the lives of too many americans. Instead of passing legislation to help these families, my republican policies may end up incentivizing prolonged drug shortages. No question that drug manufacturers are not fans of the program. There is no clear data that the driver of drug shortages. The provisions in todays discussion draft may incentivize manufacturers to prolong shortages if it means that they do not have to participate in the program. This is not the right approach. We must take a more rigorous and thoughtful approach immediately. As a cofounder and cochair of the congressional pandemic preparedness caucus, i am particularly interested in what we need to know to prepare for future pandemic. What are some of the main supply chain on abilities that you discovered during the peak of the covid pandemic . Could you share those Lessons Learned particularly as we look to address drug shortages . Thank you for the question. During the pandemic, there was a lot identified relative to these issues. Many times a function of what information you need or what information is available. Group purchasing organizations work very closely with the federal government and others relative to where supplies were throughout the country and distributing those supplies throughout the rest of the country needed throughout the pandemic and as we go forward. Information about where products are is extremely important. Also information relative to the best treatments and best treatment protocols are important for us as well. We have been actively engaged with trying to work with the manufacturers relative to information regarding their products and where they are sourced at so we can better predict what is needed going forward. Thank you for that. I will switch gears. A study found that managing drug shortages cost hospitals and Healthcare Systems an estimated 359 million per year and labor not including the impacts on patients from delayed and canceled procedures caused by shortages of drugs and essential supplies. In addition on average, hospitals dedicate more than a. 6 million hours of additional labor time annually to manage drug shortages. These figures are particularly concerning as we think about the Work Force Shortage that we have seen across the healthcare sector. In the event of a drug shortage, despite getting hospitals access to the product itself, what are some of the Additional Needs of hospitals that congress should consider . The Biggest Issue is a quality and stable supply. That is what they are looking for and that is what we hear on a routine basis. Hospitals recognize and depend on gpo to do the evaluations relative to quality and quality products that they serve. The other key thing is open line of communication. Products may be into manufacturers. They are wellversed and have great partnerships with all manufacturers to identify where issues are and how they can potentially help us. And then many gpo also have buffer stocks as we have heard about discussion today. So therefore critical medications those buffer stocks are available. Not just one particular gpo they can be used for Many Organizations that may not belong to one gpo but they are available for those that need that product for use. Thank you. You discuss in your testimony the potential for the government to take action to assist to ensure that they meet the standards set by the da and are prepared to produce essential medications as soon as the shortage begins. Could you just describe the program and why that would be a good investment for us to make . Thank you for that question. Let me start by saying once a drug shortage starts, it is really hard to stop. If we are looking for a manufacturer to enter the market with the new fda approved drug, that is a timeline of several years. That clearly is not a quick solution for drug shortages. But if we had been, and we talked earlier about drugs that are so low in price that you cannot competitively make them right now in the United States. So, manufacturer is unlikely to have that drug ready to go if and when it goes into shortage. But if the government were to fund some targeted development with the manufacturer going through the fda process and had that they are in reserve, when that drug goes into shortage, we could predict which drugs will go into shortage with reasonable accuracy. He would be ready to start production right away. That program would cost is less than what we would pay today to end, you know, just one highprofile drug shortage. Thank you. Thank you. Yielding back. The chair recognizes doctor dunn doctor dunn for five minutes. Thank you very much, chairman i am very glad that our subcommittee is addressing the topic of generic shortages today i appreciate the chairs discussion draft and look forward to supporting the generic drug shortages on the supply side. The drug shortage now takes important steps. Innovation and correct distorted markets. It seeks to examine how existing fda authorities address shortages and will also speed the inspections of the fda had there are many players in the generic drug supply chain. I appreciate all of our witnesses who represent those entities here today. Thank you. Some before us today seek to increase regulation or give the fda additional authorities. Related to reporting requirements and Data Collection however, i think that we have seen a failure of the fda firsthand. Just look at the baby formula crisis. I think that it is clear that empowering three letter agencies is not going to solve our problem. We need to empower compounders who can nimbly address shortages and to do that we have to cut that. Answering the call to shortages when they occur and these shortages are constant and chronic, the same drugs shortly now were the same as when i came in but theres no surprise here. I am proud to cosponsor 167 enables 503 a compound facilities to produce drugs and circumstances and we need to remove the red tape along the industry to give more red tape. I do have serious concerns with hr 3608 which would compel manufacturers additional requirements regarding construction to supply highly descriptive lockdown many scriptures it may not be indicative of a shortage. For example, this bill requires increased demand for six weeks and more in other decrease in demand while sometimes caused by all kinds of reasons so i have a few questions. I use contractors back in the day and in many cases i lean on your industry and i do so for good reason. I practice that is in, tell me how they have evolved, walk me through this. Thank you for the question. Over the years they have invested tremendous amount of time and expense to enhance services and that could include anywhere from significant Data Analytics to help customers and providers understand opportunities to save money based on operations and procedures and have spent a lot of time benchmarking and you see the data they collect. One of the key things they are able to work with their membership to share and identify best practices not only materials management or supply chain but also certain component of the Healthcare Supply Chain to a number of things we dont and great contact and opportunity to work with manufacturers and may not be able to solve them but have them reduce shortage as much as we can. I would know that gpos have conspiracy requirements set them apart from supply chains. The fda already requires interaction manufactured the agency recommends that companies notify the expected lichen demand does is. Thank you for the question, we believe especially under the cares act data they need, we are reporting data on an annual basis that gives the api source and usage and all the information they currently. Thank you very much. The chair recognizes you for five minutes. I think our witnesses testifying before the committee today. Im a former nurse also director of the i would department of Public Health when you were not in a pandemic. The impact of one cannot be overstated. There was going on to spend the year before shortage and we have alluded to production and volume of generic drugs was larger with 37. 6 compared to brandname drugs expressing shortages for 34. 4 . It hardly recent drug shortages and critical access to hospitals. The cause is multifaceted, general agreement of economic challenges especially in the generics market because manufacturers can be, at some time the result on this investment. A price get too low, multiple manufacturers might leave particular market or single api cant make the market changed to fit with lack of api and contamination etc. , there is a resulting shortage. Is there a correlation of and reimbursement for it to thrust the healthcare medicare and medicaid to force reimbursement to low we get. Just go down the line, is there any relation, yes, no or you dont know . Think the question can you believe there is a correlation earlier in the hearing became a new opportunity as you go start to finish and we will send back document that maps that will. Numerous reports examined root causes of drug shortages and they conclude drugs are part of the problem not as a programs or creating the problems but the margins are not helpful. I agree theres no evidence creating it but we have a syste thank you very much. Is a complicated one but we agreed. It is complicated however, many times down to the source after he woke up and system status for market incentives and we make sure their investments. Its not to throw money at the problem, it is to make the correlation between dont exist. We have the same for the bill to subsidize chip manufacturing and are we doing the same to other industries my concern is because we are underpaid would it cost to make a generic drug, what it costs to stay in business, even a Small Business owner and paid property taxes which private businesses pay, we will then subsidize another type of industry and pay more than we would and thats what im saying. You highlight how prevalent and generic medications are over 90 dont so using generic and you highlight how drug shortages impact it differently. It will be a correlation or effect of the ira whether there are factors for generic shortages. Thanks for the question and reimbursement lead to a shortage so look today, we understand its been resolved but still an ongoing issue not, there were seven Companies Want to only three when the drug shortage occurred so the other four were not able to come back in one company is the market goes up, you cant get it passed in the. Thank you and i look back. Chair recognizes you for five minutes. Thank you so much and thank you to our witnesses for this hearing on whats an extremely important topic for the august break what i have met with my advisor report that includes representatives from both hospitals in my district and shortage of certain drugs with the number one issue for most of them. In ascetics and chemotherapy drugs with a lot of hospitals but also the notion that surprised me may let me know when no Uncertain Terms how this problem is to them and read Something Interesting in your testimony and wanted to follow up on. One recommendation unit is a finalized metrics and required to support those metrics and in doing so that would create information publicly available to allow purchasers to prioritize purchasers from manufacturers less likely to expand for just drugs in the future and it piqued my curiosity because as someone who is a fan of limited government and vasquez solution and that would be right, his idea more transparency and exchange of information would solve the problem. I have to be skeptical because it ignores complications of drugs where there is full source and ignores situations where unpredictable demand causing shortage rather than forecasting on the side of the manufacturer so could you give hope that that would be a possible solution . Established Quality Manufacturing and shortages and 50 of the market but when you read back, if it doesnt terrify you that i dont know what would. If they knew what they were witnessing and, as they continue for that company for what they have bought another company . For the program is, it looks at cultural quality and maybe not the best at this time. Is there already a mechanism for that . And more robust supply chain, couldnt you think that potential. The price competition comes back to where it should be but without that, its not a level Playing Field and simply buying the cheapest product available. I would think of the was to be had, there is incentive but we will continue to explore because of this idea of transparency is attractive but we must fix the problem and everyone on this, it is loud and clear so thank you for being here and for your service. The gentleman fields back. All members of the subcommittee present and we have a good friend from florida. Thank you for allowing me to wait on because this is such an important matter and you got my attention, 309 drugs you are identifying and the folks are really struggling, you call it a crisis. Exactly what from neighbors at home, scrambling to find workarounds to give people access to the medications they need. I did a roundtable with patients, doctors and pharmacists and providers and some of what they said children can get their chemo drugs or iv medical nutrition they need to contact pharmacists to seek stock so he knows what will the pediatrician was hired an employee handbook pharmacy act so everyone is struggling to keep up with cascading impact of the shortage will, a waste of money and not certain was being proposed will have a majority to get the. One of the folks focused on brainstorming solutions from tampa bay, a volunteer support nonprofit that works to minors with drugs they need so about that model. They give a small grant 503b many of the in the coming ticket purchasing commitments or who can produce this drug before the shortage begins so no is project Predictive Modeling you select the most vulnerable drugs, are there ways we can run apply change for accurate Predictive Modeling and early warnings drug shortage . Yes, shes very passionate and has been good work this is one of could be scaled and heard my colleague here talk about and at the ready which is a similar model for commercial manufacturers but the predictive part is identifying whats most at risk using multiple data points talking about transparency and understanding where we rely on a Single Source is in the only hope to get these further and get more tools for decisionmaking and identifying projects or even talking about buffers or allocations, we dont need to convert every single medication, just where is the most vulnerable so increased modeling opens opportunity for public and private should and gives an idea of where the vulnerabilities are to show off. This tracks the recommendations, publicprivate partnerships and Predictive Modeling, what you think . Thank you question. Modeling only works with data i go comments made that we need to improve and need to know where the problem is. The most critical supply chain . Yes, modeling will get is only so far but we need systemic investments and not just the justice. I hope the majority would take this to heart. Gentle lady goes back and concludes for everybody. This is what im hearing back home so that should shape policy so you will get a list and submit the record. You have ten business day to submit questions and i know some require it in writing and submit questions by september . Without further adjourned. [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] which should in rescissions. [inaudible conversations] [inaudible conversations] c, discuss the latest issues in government, politics and Public Policy. From washington, d. C. And across the country, coming saturday morning, the Washington Examiner on the Biden Administration response to the recent migrant surge at the u. S. Mexico border. Then enter spotlight on podcast segment, the podcast, amicus. 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