FTC to Examine Generic Drug Shortages

February 15, 2024

Federal regulators have issued a request for information to better understand the generic drug shortages that have posed challenges in health care.

This week, the Federal Trade Commission (FTC) and the U.S. Department of Health and Human Services (HHS) issued a joint request to learn more about how group purchasing organizations (GPO) and drug wholesalers may be contributing to generic drug shortages.

The request comes after the U.S. Senate Finance Committee published a white paper last month about potential policy approaches to address the issue.

“For years Americans have faced acute shortages of critical drugs, from chemotherapy to antibiotics, endangering patients,” FTC Chair Lina M. Khan said in a statement. “Our inquiry requests information on the factors driving these shortages and scrutinizes the practices of opaque drug middlemen.”

Here’s what you need to know:

• The issue:  Federal regulators are interested in the ways intermediaries (GPOs and drug wholesalers) affect drug prices and market demand through their role negotiating deals for generic drugs and other medical supplies.
• Key concerns:  FTC and HHS officials said they want to learn more about how “market concentration among GPOs and drug wholesalers has impacted smaller health care providers and rural hospitals” and if compensation models related to rebates, chargebacks, and administrative fees have affected drug availability.
• Where to comment:  The public will have 60 days to comment online.
• Quotable:  “When you’re prescribed an important medication by your doctor and you learn the drug is out of stock, your heart sinks,” HHS Secretary Xavier Becerra said in a statement. “This devastating reality is the case for too many Americans who need generic drugs for ADHD, cancer, and other conditions.”

HAP continues to monitor the latest on the nation’s drug shortages and provide updates to members. The request for information is available online.