3 Ways Congress Can Cut Drug Shortages: Duke-Margolis
The Duke-Margolis Institute for Health Policy says there are three steps Congress could take to reduce chronic drug shortages. In a 2/5 letter to the House Ways and Means Committee, the institute says many drug shortages are caused by manufacturing quality issues. “Ultimately,” it says, “this poor performance in manufacturing reflects problems in healthcare purchasing and payment. Payers and providers lack insights into manufacturers’ supply chains and quality management practices and generally have not invested enough on their own into gaining further insights. Drug purchasers choose suppliers based primarily on price, not reliability.”
The letter says that many of the most important and effective policy solutions that can help to address the economic root causes of drug shortages are within the purview of this House committee and the Senate Finance Committee. It recommends consideration of these potential policy solutions:
- enable demand-side reforms for reliability, including a “reliable drug supply payment adjustment” that would adjust Medicare payments to hospitals based on whether they engage in reliable drug purchasing practices when buying certain essential generic medicines;
- improve quality management and supply chain practices; and
- advance federal coordination.