Transcript: Rep. Trey Gowdy’s statement 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 opening statement by Rep. Trey Gowdy (R-S.C.):

Rep. Ted Gowdy (R-S.C.). IMAGE SOURCE: oversight.house.gov

“The drug shortages of America has all the makings of a national crisis. Doctors are frustrated, patients and loved ones are worried, lives are truly in the balance. Drugs are being rationed. Doctors are forced to sometimes look for less efficacious drugs. Clinical trials are being disrupted. And perhaps, unbelievably, doctors are sometimes asked to pick between patients as to who will receive the drug.

“For all those reasons and more, it is vital Congress conduct oversight of the drug shortage to understand why the problem exists and what can be done to remedy it.

“In order to find solutions, we must have a clear understanding as to why the drug shortages exist in the first instance.


“Over the last decade, there were around 70 new drug shortages identified each year between 2003 and 2006. And then the number of drugs and shortages began to dramatically increase. In both 2010 and 2011, there had been over 200 new drug shortages identified. Typically, these drugs are used to treat cancer, heart disease, and complicated infections.

“Dr. Michelle Hudspeth, testifying before us today, will discuss how the shortages affect the care plan she establishes for pediatric patients.

“The shortages will also affect clinical trials and whether or not the trials will go forward with participating patients. If there’s a drug shortage that prevents participation, there will still be a cost associated with the trial. Considering the importance of drug trials for research, this is another reason identifying the cause or causes of the drug shortages is so very vital.

“If the money has been approved for trials, it is important to ensure that needed drugs are available.

“Let me say that nearly at the outset if there is anything for which there is no shortage of in this town it is politics. And I suppose every issue can theoretically be turned into a political football if the notion strikes.

“One reason I enjoy this committee and the members on, it is that we are, from time to time, able to set aside politics and look for the root causes of an issue and have a good faith conversation about the remedy. When it comes to sick patients, when it comes to children, when it comes to research of the diseases that are or will impact nearly every family here, my hope is politics will go away, and we can earnestly and honestly identify the issues and suggest the remedies.

“Several explanations for this crisis have been offered, but a recent report issued by the Department of Health and Human Services highlights pricing problems that limit the supply of these drugs. Part of this problem could be changes made to the Medicare Modernization Act in 2007 regarding the reimbursement of injectable drugs. One of the provisions of this law sought to increase price transparency and reduce the profit that providers make from delivering intravenous drugs in their offices.

“In the New York Times recently, Dr. Ezekiel Emanuel, oncologist and professor of health policy at the University of Pennsylvania, discussed the issue thusly – and I’ll quote Dr. Emanuel – “In the first two or three years after a cancer drug goes generic, its price can drop by as much as 90% as manufacturers compete for market share. But if a shortage develops the drug’s price should be able to increase again to attract more manufacturers. Because of the 2003 act effectively limits drug price increases, it prevents this from happening. The low profit margins mean manufacturers face a hard choice: lose money producing a life-saving drug or switch limited production capacity to a more lucrative drug.”

“Another potential cause of the increasing number of shortages could be the expansion of the 340B program. The 340B rebate program is a pricing program that requires drug companies to provide rebates to hospitals and clinics serving indigent communities. Although the 340B program is essential for providers of indigent care, the 340B program could be affecting the ability of manufacturers and suppliers to provide required drugs because the rebates may reduce the price of drugs to well below the cost it takes to manufacture them.

“There have been proposals which would require drug manufacturers to alert the FDA of manufacturing problems or the discontinuation of a drug. Although this has superficial appeal perhaps, simply knowing that a shortage is coming does little to correct the situation. Merely having more time to worry about whether the drug your doctor wants to prescribe for your may or may not be available provides little comfort. Thus, it’s important to dig a little deeper into the actual causes of these shortages.

“Again, quoting Dr. Emanuel, “The FDA isn’t able to force manufacturers to produce a drug, and learning about impending shortages with little authority to alleviate them is of limited benefit.”

“Indeed, early warning could exacerbate the problem. The moment oncologists or cancer centers hear there’s going to be a shortage of a critical drug, their response could well be to start hoarding.

“In talking with folks like Dr. Hudspeth, and let me say at the outset, she is from South Carolina but I do not represent the district where she lives or works. Two of my colleagues, Tim Scott and Jim Clyburn, have been very active in Medical University of South Carolina and done many wonderful things there. But I had the privilege of visiting the Medical University recently, and I was struck by the passion with which Dr. Hudspeth laid out for me this crisis.

“So I want to make sure that we have a full understanding of what the challenges are and that we can equip ourselves with the tools. So perhaps we can do as the good book teaches and to take care of the sick, poor, and the children.

“I’m concerned to hear of the drug shortages affecting the care and ultimately the health of patients, especially pediatric cancer patients. If there’s anything that can get the attention of every member of this committee, it is to hear stories of children with medical needs. And I have heard colleagues on both sides of this committee speak with great eloquence and passion about issues involving children and their health.

“So I’ll look forward to having a clear understanding of the issues surrounding the drug shortages and what we can do to remedy it.”

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