AAM commends HHS, FTC call for information, solutions on drug shortages

The Association for Accessible Medicines commended the Federal Trade Commission and the Department of Health and Human Services in their efforts to understand generic drug shortages and the possible impact on shortages caused by group purchasing organizations and drug wholesalers.

The FTC and HHS on Wednesday issued a Request For Information, “to help uncover the root causes and potential solutions to drug shortages.”

“AAM commends HHS and FTC for seeking input on the impact of group purchasing organizations and wholesale distributors on the sustainability of generic drug competition,” said David Gaugh, interim president and CEO of AAM. “This year represents the 40th anniversary since the enactment of the landmark Drug Price Competition and Patent Restoration Act of 1984 (also known as the “Hatch-Waxman Act”). But the generic industry and the savings made possible through Hatch-Waxman, more than $408 billion last year alone, face unprecedented threats.”

[Read more: Challenges continue, but generics companies see a bright future with biosimilars]

AAM has released a white paper highlighting the sustainability challenges facing the industry, worked with IQVIA to establish the facts around drug shortages and articulated the causes and solutions to drug shortages. "We look forward to working with HHS and FTC in this effort," AAM said.

Gaugh continued, “Generic prices are decreasing, drug purchasers are becoming more concentrated, new generics are not adopted as quickly, some generics are never launched due to limited commercial opportunities and registered manufacturing sites are declining. As a result of all of this, the risk of drug shortages will only increase without action to bolster the long-term sustainability of generic manufacturing. GPOs and wholesalers are most definitely a part of the solution to drug shortages.”

The FTC and HHS are seeking public comment regarding market concentration among large health care GPOs and drug wholesalers as well as information detailing their contracting practices. The joint RFI seeks to understand how both GPOs and drug wholesalers impact the overall generic pharmaceutical market, including how both entities may influence the pricing and availability of pharmaceutical drugs. The joint RFI is asking these questions to help uncover the root causes and potential solutions to drug shortages. 

[Read more: Senate committee moves FDA User Fee bill with 5 NACDS-backed provisions]

2024 marks the 40th anniversary of Hatch-Waxman, which created a pathway for the introduction of lower-cost generic drugs. The results have yielded unparalleled savings successes over the last several decades: according to AAM’s most recent annual savings report, in the last 10 years alone, the use of generic drugs has saved patients and the U.S. healthcare system almost $3 trillion dollars. But this track record of success—and the resulting increase in patient access to care—is currently at risk, AAM said.