Transcript: Drug shortages Q&A by Sen. John Thune

Senate Committee on Finance hearing on “Drug Shortages: Why They Happen and What They Mean” held on Dec. 7, 2011

Transcript of Q&A by Sen. John Thune (R-SD):

Sen. John Thune (R-SD) IMAGE SOURCE: finance.senate.gov

Sen. John Thune (R-SD):

“Thank you, Mr. Chairman. I do appreciate you being – your contributions to this important subject. I want to thank you, Chairman Baucus, for holding this hearing.

“Dr. [Kasey] Thompson, I have constituents that are health system pharmacists and belong to your organization. Many of these constituents also work for systems that participate in the 340B program. There are folks who have asserted that the 340B program is a source of the problem in drug shortages, and yet the 340B program, I believe, only accounts for about 2% of the total U.S. drug spending. I guess my question is have you seen any evidence that indicates that the 340B program contributes to drug shortages?”

 


Dr. Kasey Thompson, Vice President of Policy, Planning and Communications for the American Society of Health-System Pharmacists (ASHP):

“No, Senator. We have seen no evidence that the 340B program is a contributing factor at all to the drug shortages for the same reasons you note. We speculate that it’s about 2% of national drug purchases in the United States. It just seems like a very unlikely factor in the brooder scope of drug shortages.”

 

Sen. John Thune (R-SD):

“Anybody else want to comment?”

 

Dr. Rena Conti, Assistant Professor of Health Policy and Economics at the University of Chicago: 


“Yes, I would like to.

“It is clear that prices for some therapies are very low because of the 340B program. Essentially, what this does is act to transfer money from the manufacturers to physicians and hospitals by producing very low discounted drugs.

“Eliminating the program or reducing the program would potentially, again, transfer more money to the firms so that would potentially produce increased money for them to make more of these drugs.

“But it also may aggravate shortages in the short-term as more disadvantaged or vulnerable hospitals will be forced to purchase these drugs through other contract mechanisms that can potentially face increased prices.

“The key question with the 340B program is how important is the 340B program to the overall purchasing of these sterile injectable drugs? Secondly, what alternative options are there for safety net providers to be able to purchase these drugs at prices that they can afford?”

 

Sen. John Thune (R-SD):

“Thanks. Dr. Thompson, your organization maintains a list of shortage drugs. How do you determine which drugs are in short supply? Is there any interface or communication with the FDA and your organization about drugs that are deemed in short supply?”

 

Dr. Kasey Thompson, Vice President of Policy, Planning and Communications for the American Society of Health-System Pharmacists (ASHP):

“Yes, sir. There is. There is daily communication between the FDA and the University of Utah Drug Information Program, which we collaborate with on this. What we do with the University of Utah is conduct a root cause analysis as soon as we get notification from usually a pharmacist in a hospital that a shortage is happening. We begin a process of contacting manufacturers and contacting other components of this supply chain to find out, to determine, whether the shortage actually exists. As soon as we’ve identified that it has, we immediately transfer that information to the FDA drug shortages program.”

 

Sen. John Thune (R-SD):

“Let me just ask a question. This is kind of – this is a contentious issue around and has been for a long time. But is there any reason to believe that reimportation of drugs might help assist with the drug shortage problem? Do you see any connections there between drugs that might be reimported if that were permissible?”

 

Dr. Kasey Thompson, Vice President of Policy, Planning and Communications for the American Society of Health-System Pharmacists (ASHP):

“We don’t believe that it’s a solution to the problem. We believe that it raises a lot of other potential risks associated with patient safety that concern us – you know, unfamiliar products, different formulations, labeling differences.

“There have been cases with Propofol in the past few years where there was an absolute necessity to find a solution because it didn’t exist and it was needed in the OR suite and there was drug imported through an FDA process to do that. But we don’t think there should be a lot of time and effort should be spent focusing on reimportation as a solution to drug shortages.”

 

Dr. Patrick Cobb, Frontier Cancer Center and Blood Institute:

“I would agree with that. We’re the end users of these drugs. When they come from an American firm and American distributors, we know what the pedigree is; we know that the FDA has inspected the manufacturing process. We have full confidence in the potency and safety of those drugs. For drugs that come from other places, we’re not as sure about those things.”

 

Dr. Rena Conti, Assistant Professor of Health Policy and Economics at the University of Chicago: 

“This is a global business for generic manufacturers. So there’s a limited supply of the drugs that they’re producing across the entire world. I think importing is not going to solve the problem in the long-term because, again, it will not increase the supply of these therapies over the entire world. It will just redistribute drugs from us to other places or from other places to us. Secondly, the more you increase demand for these therapies in the short-term through these types of redistributions, the more the prices are going to rise.”

 

Sen. John Thune (R-SD):

“Okay. Dr. Cobb, some of the experts on the panel have indicated that both Medicare reimbursements and oncology practitioners favor the use of new drugs versus generics. One, do you believe that to be true? Two, if so, how much of that decision on a practitioner’s level is based upon the concern of supply shortages or limited quantities of perhaps older generic drugs?”

 

Dr. Patrick Cobb, Frontier Cancer Center and Blood Institute:

“Certainly, the reimbursement situation that was put forward by the Medicare Modernization Act of 2003 has changed the practice dynamic significantly. That being said, there are not that many A versus B substitutions that can be made. A lot of the generic drugs that are out – there are no substitutions for a brand name. The example that I gave of the patient with colon cancer where you can substitute Fusilev for Leucovorin – that’s more of the exception rather than the rule. Same thing goes for brand name drugs. Often times, there are no substitutions for this. For instance, for Herceptin, there aren’t any generic forms of Herceptin or anything that works like that.

“So the economics do play a role. I run a small business. I hire and employ 65 people in Montana and Wyoming. It does factor into it. There’s no question. But the decision comes up less than you would think.”

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