Transcript of Q&A by Rep. Trey Gowdy on the drug shortage crisis

House Oversight and Government Reform Committee 

“Drug Shortage Crisis: Lives are in the Balance” hearing held on Nov. 30, 2011 by the Subcommittee on Health Care, District of Columbia, Census, and the National Archives

Transcript of Q&A by Rep. Trey Gowdy (R-S.C.):

Rep. Trey Gowdy (R-S.C.):

“Dr. Hudspeth, what percentage of drugs used to treat childhood cancer are generic?”


Dr. Michelle Hudspeth, Division of Pediatric Hematology/Oncology of Medical University of South Carolina:

“Over 90% of the drugs that we use to treat and cure childhood cancer are generics. And I understand that we have to be good stewards, just like you all, of the budget, and I can imagine your concerns. We’re talking about our concerns about prices and increasing costs. But you have to understand that if you look at generic injectable cancer drugs, they represent  only 2% of the entire budget spent each year on cancer chemotherapy drugs. So even by improving this, you’re only looking at a very small overall increase. They make up 0.5% of the total cost spent for cancer care each year.

“I’ve got a young man, who’s an honors college student, whose leukemia has relapsed. He needs a drug to start tomorrow. But we have an adult in our institution who’s also due to start a regimen that needs the same drug. I don’t know who we’re going to be able to treat tomorrow, and that’s real – that’s me getting off the plane yesterday calling, emailing back with my home institution. So this is real.”


Rep. Trey Gowdy (R-S.C.):

“Are there particular types of incentives that would encourage manufacturers to enter the market and stay in the market?”


Dr. Michelle Hudspeth: 

“Absolutely. There have to be incentives, I believe, for production capacity. If you noticed, the drugs primarily in shortage are injectable drugs. They’re typically more complex to produce than a pill. Typically in a company they have to dedicate an entire production line to save that one drug. So there are some real things about injectables that are different, and so I think there’s going to have to at the end of the day be some form of incentives for the companies to be able to run 24/7 production lines, have a contingency plan. That’s a current problem. They really do not have contingency plans, and there’s some measures in H.R. 2245 that do recommend that the FDA do require contingency plans for single-makers of critical drugs.”


Rep. Trey Gowdy (R-S.C.):

“Dr. Hudspeth, you were good enough this morning and again in your response to a question to mention the untenable choice that a physician would have to pick among patients. Without violating the confidences of any of your patients, has the drug shortage caused you to change the way you practice medicine and in any other regards?”


Dr. Michelle Hudspeth:

“Yes. We have had to start chemotherapy regimens sooner than normal. Typically, we require that a patient recover from their prior chemotherapy regimen to a certain level to be safe enough to start the next cycle. We’ve started patients sooner than normal just out of fear that if we wait another week there’s simply won’t be drug available.

“This has come up – Cytarabine has been mentioned a lot in the press. There’s absolutely no substitution for Cytarabine. It’s in every single regimen in order to cure AML [acute myeloid leukemia].

“The other issue is medical errors. A cardinal rule of pharmacy safety is you stock one concentration of a drug. That way everybody who mix that drug day in and day out, they understand this is what we’re working with. Now people are scrambling. We’re just happy to have a drug. So you’ve got five different concentrations. People are unfamiliar. You’re going to absolutely increase the amount of errors.”


Rep. Trey Gowdy (R-S.C.):

“If the pricing problems are not remedied, what do you see the future of drug crises being? Drug shortages?”


Dr. Michelle Hudspeth:

“Right now, it feels like practicing medicine in a Third World country. I never dreamed of a day where I have to spend hours on end that I should be at the bedside talking to the families or with the kids. But then I’m on the phone with pharmacists and the other oncologists trying to figure out alternative treatment plans and who gets what. It’s taking up time that could be used in so many other ways. And at the end of the day, if it’s your family member that’s being treated for cancer, you want me worrying about if you got drug or not or you want me thinking about taking care of you?

“The other drug shortages that are mentioned are antibiotics, antivirals, nutrition solutions. My patients all need those too, right? So one of the consequences of chemotherapy is you can’t eat and you get a heck of a lot of infections. So we’ve had significant issues too where we simply haven’t even had the supportive care drugs to treat them, to support them through the therapy when they do have the therapy.”


Rep. Trey Gowdy (R-S.C.):

“I want to ask a question – and I’ll give the other four gentlemen a chance to answer – with respect to negatively impacting clinical trials. I’ve only got 30 seconds so if you could give a quick response if this is an area where you feel comfortable talking about. Dr. Hudspeth already told us in the actual practice. With respect to research the drug shortage how is it impacting clinical trials?”


Ted Okon, Executive Director of Community Oncology Alliance:

“Mr. Chairman, I can just say that hearing from oncologists all across the country, it’s a real problem. Because the problem is, the trials in many cases – and I understand in talking to some of the manufacturers – trials have actually had to be stopped because of the unavailability of a particular drug.”


Second Round of Questioning: 


Rep. Trey Gowdy (R-S.C.):

“If we were looking at this like a trial, I would say you’ve proven beyond a reasonable doubt that there is a drug shortage. You have proven beyond a reasonable doubt that it’s a crisis. You have proven by clear and convincing evidence that there are a number of causes.

“So I want to do this: Dr. Hudspeth, I’d asked you this morning and I want you to do this again. I want you to assume that you made the grades I made in college and not the ones that you made, and you weren’t in medical school but you found yourself in a legislative body. What’s next? There’s no need to continue to have hearings on whether or not it’s an issue. You can beat a dead horse; it doesn’t hurt the horse but it doesn’t do any good. So what’s next? Who should we be asking questions of? And what questions would you ask if you were sitting here?”


Dr. Michelle Hudspeth: 

“Sure. I think there’s got to be strategy groups that look at pricing and pricing options. I’m not an economist so that’s going to require all those folks to be involved looking at pricing strategies and how you deal with that.

“The second fold to that yes, we’re going to need to give incentives; yes, we’re going to need to make it profitable to make generics. But they can’t cry wolf over and over again, okay? So they cannot have continuing manufacturing problems. So there’s going to have to be some sort of three strikes you’re out policy. The incentives and those things are only so good as long as you can prove you can keep up with GMP.

“And then, I think the second thing is contingency planning. I mean, that’s what we all have to do. In school, you have to have a fire escape plan. Here we have life-saving drugs with no contingency plan in a single manufacturer. I think some solid planning for A through Z – what you do when you go offline and how do we fill that in.”


Rep. Trey Gowdy (R-S.C.):

“Mr. Kalmans.”


Walter Kalmans, President of Lontra Ventures:

“Well, there has been stockpiling of medicines for defense in the past. It could be an idea to look at providing incentives to stockpile a generic injectable drug stockpile. Just coming up with ideas, potential solutions. That’s one area I’d look at.

“But this is an issue that’s going to stick around. It will grow for a period of time. I think it may over time, which we don’t have by the way. We don’t have the benefit of time. But over time, there’s been an unprecedented number of branded drugs that have gone off patent. There’s not as many drugs coming off patent in the future in the generic injectable’s base. So I think the capacity will come back into line. But unfortunately, the bottom line is we don’t have the benefit of time. So the sooner we figure out a solution together, the better off we all are.”


Rep. Trey Gowdy (R-S.C.):

“Mr. Okon?”


Ted Okon: 

“Mr. Chairman, I think we have to draw a line down in the paper. I think that what we have to do and put in place is a solution that basically provides proper incentives on the manufacturing side, realizing that this is a regulated market. It’s regulated both in terms of the price, and it’s regulated in terms of manufacturing. We have to accept that. So I think we have to put the incentives on the manufacturing side, and I think we basically have to do something on the reimbursement piece.

“The other side of the paper is more immediate, because even when we do that it’s not going to take care of Dr. Hudspeth’s patient that basically she has to find the drug.

“I think this is a crisis. It’s a national crisis. We need to come together, put all politics aside, and say how can we get these drugs safely, distributed through the proper channels? How can we get them immediately so that we can basically get the drugs in the patient’s hands that needs them?

“I think that with all that we have to do and we should do on the legislation side to put the proper incentives in place and basically take care of both on the manufacturing and the provider side, I think we have to do something more immediate and I think it has to be drastic.”


Rep. Trey Gowdy (R-S.C.):

“Dr. Gottlieb?”


Dr. Scott Gottlieb, Resident Fellow at the American Enterprise Institute:

“Well, unfortunately I think it’s going to get worse before it gets better. There are things we can do both immediate and long-term.

“For the immediate, I would urge the committee to send a letter to the top five manufacturers and ask them how much of their manufacturing capacity is currently offline because it’s undergoing remediation and make sure that as that manufacturing capacity gets remediated in consultation with the FDA it’s done in as efficient a fashion as possible with the regulatory authorities. The reality is we have more manufacturing in this country, but the industry has consolidated, so more of that manufacturing capacity is sort of consolidated at a handful of large facilities. So when you take Tabuk’s Irvine facility offline or Hospira’s facility offline, you’ve just taken off 15% of the entire market.

“Longer term, I think we need to find ways to allow these prices to float to justify long-term investments. It could take as long as seven years to stand up a new manufacturing facility for parenteral drugs, so the companies need to know that they can take and sustain price increases for some of these drugs if they’re going to make the long-term investments. That would be sort of a long-term policy fix, if you will.”


Rep. Trey Gowdy (R-S.C.):

“Dr. Thompson?”


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

“Step one: pass the current legislation that’s been in Congress. That’s S. 296 and H.R. 2245. Confidential reporting to the FDA isn’t going to solve drug shortages but there’s evidence to say that in 101 cases the FDA has been able to prevent a shortage when a manufacturer confidentially report it to them. That’s what this legislation does. Now, there’s 240 shortages on the list now, so you can imagine that if the reporting occurred across the spectrum that number would be higher than 101. So I would say step one, pass that legislation now that requires confidential reporting, and it is confidential reporting to the FDA; it’s not public reporting.

“The second would be to explore all these other factors. I think there’s a little more time to do those sorts of things – not a lot of time – but look at the economic factors, really have a deep discussion with the manufacturers and other members of the supply chain to get a very thorough understanding of really what these drivers are and then go to that next step.”

“I think the legislation pending in Congress now needs to move.”


Rep. Trey Gowdy (R-S.C.):

“Well, on behalf of all of us, thank you for loaning us your expertise, your time.”



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