Schumer Unveils Three-Point Plan to Prevent Life-Saving Drug Shortages

Strategic Insights -

U.S. Senator Charles Schumer has announced a three-point plan to address the growing crisis of life-saving drug shortages. The plan aims to establish an early warning system to prevent shortages, make prescription drug price gouging a federal crime, and demand an investigation into "gray market" resellers that mark up life-saving medications at exorbitant prices. Schumer's plan comes as hospitals throughout Central New York report shortages of chemotherapy drugs, essential to patient care.

Key Takeaways:

  • Schumer's plan includes introducing the Preserving Access to Life-Saving Medications Act, which would require drug makers to immediately notify the FDA when a raw material shortage, manufacturing problem, or production decision is likely to cause a drug shortage.
  • The early notification would allow the FDA to work with other manufacturers to find new sources and ensure the supply chain is not interrupted.
  • Schumer is also introducing legislation to make prescription drug price gouging a federal crime, giving the U.S. Department of Justice the authority to prosecute price gougers and crack down on unscrupulous drug distributors.
  • The Protecting Patients and Hospitals From Price Gouging Act would impose penalties of up to $500 million per violation.
  • Schumer also calls for an investigation into "gray market" resellers that mark up life-saving medications in short supply and re-sell them to hospitals at outrageous prices.
  • The "gray market" is responsible for selling vital, life-saving medications at mark-ups of up to 335%, according to the Premier Health Alliance survey.
  • Schumer's plan comes as pharmacies and hospitals are forced to do work-arounds, substitutions, and even secure drugs from the "gray market" due to the short supply or complete unavailability from wholesalers.
  • The lack of a warning system has resulted in costly resources and time being spent to alleviate drug shortages, causing massive financial losses to Syracuse hospitals and hundreds of hours of manpower to find alternatives.
  • Doctors believe drug shortages can create longer stays in hospitals and slower recoveries.

Statistics:

  • Over 240 drugs were either in short supply or completely unavailable in 2010, with more than 400 generic equivalents backordered for greater than five days (Source: Premier Health Alliance).
  • The number of newly reported shortages rose from 166 in 2009 to 211 in 2010 (Source: Premier Health Alliance).
  • The increase in health care costs due to the need for substitutions in response to drug shortages could be as much as $200 million each year nationwide (Source: Analysis).
  • The "gray market" resellers have been known to mark up life-saving medications by as much as 335% (Source: Premier Health Alliance survey).

Sources:

  • Senator Charles Schumer's office
  • Premier Health Alliance
  • S. 296, the Preserving Access to Life-Saving Medications Act (introduced by Senator Amy Klobuchar)