WASHINGTON — Members of the Senate Finance Committee took their first steps today toward using Medicare payment policy to fix drug shortages.
Drug shortages are particularly vexing because they’re mostly caused by policies within the control of the government, as opposed to outside shocks such as natural disasters. Instead, it’s economic factors — the complicated way Medicare pays hospitals or the dominance of group purchasing organizations that buy hospital drugs — that force generic drug makers to operate on razor-thin profit margins that don’t allow for proper maintenance of facilities, resulting in shutdowns or companies exiting markets.
“Make no mistake,” said Allan Coukell, senior vice president of public policy for the nonprofit drug maker Civica Rx. “Shortages are not a passing storm.”