The Senate Finance Committee held a hearing on Dec. 5, entitled, “Drug Shortages: Examining Supply Challenges, Impacts, and Policy Solutions from a Federal Health Program Perspective.” Witnesses included academics, clinicians, and a representative of Civica Rx, a nonprofit organization founded by U.S. health systems and philanthropies to address drug shortages. The discussion focused on strategies to strengthen the supply chain for generic sterile injectable drugs, as well as incentivize hospitals and other providers to purchase these drugs from secure and reliable producers.
During the hearing, several witnesses recommended that the committee reevaluate certain rebate requirements for generic drug manufacturers under the Medicaid Drug Rebate Program (MDRP). Under the MDRP, generic drugs are subject to a rebate of 13% off the average manufacturer price and may be required to pay additional rebates if they raise the prices of their drugs faster than the rate of inflation. In her testimony, Marta Wosińska, PhD, senior fellow at the Brookings Institution, recommended that the committee consider exempting certain generic sterile injectable drugs from the MDRP. This recommendation mirrors a similar proposal included in House Energy and Commerce Committee Chair Cathy McMorris Rodgers’ (R-Wash.) July 28 discussion draft legislation, which would eliminate or cap inflationary penalties for certain generic drugs under the program. The AAMC opposed this proposal, citing concerns that such a policy would “result in significant drug price increases, which states, the federal government, and hospitals will ultimately be forced to shoulder” [refer to Washington Highlights, Aug. 31].