RFI asks what impact GPOs and drug wholesalers have on generic medication shortages
WASHINGTON (February 14, 2024) — The Association for Accessible Medicines, the leading trade association for generic and biosimilar manufacturers, today commended the Federal Trade Commission and the U.S. Department of Health and Human Services in their efforts to understand generic drug shortages and the possible impact on shortages caused by group purchasing organizations and drug wholesalers. Earlier today, the FTC and HHS issued a request for information, “to help uncover the root causes and potential solutions to drug shortages.”
“AAM commends HHS and FTC for seeking input on the impact of group purchasing organizations and wholesale distributors on the sustainability of generic drug competition,” said David Gaugh, Interim President & CEO of AAM. “This year represents the 40th anniversary since the enactment of the landmark Drug Price Competition and Patent Restoration Act of 1984 (also known as the “Hatch-Waxman Act”). But the generic industry and the savings made possible through Hatch-Waxman, more than $408 billion last year alone, face unprecedented threats.”
AAM has released a white paper highlighting the sustainability challenges facing the industry, worked with IQVIA to establish the facts around drug shortages, and articulated the causes and solutions to drug shortages. We look forward to working with HHS and FTC in this effort.
Gaugh continued, “Generic prices are decreasing, drug purchasers are becoming more concentrated, new generics are not adopted as quickly, some generics are never launched due to limited commercial opportunities, and registered manufacturing sites are declining. As a result of all of this, the risk of drug shortages will only increase without action to bolster the long-term sustainability of generic manufacturing. GPOs and wholesalers are most definitely a part of the solution to drug shortages.”
From the FTC’s press release, the FTC and HHS are seeking public comment regarding market concentration among large health care GPOs and drug wholesalers, as well as information detailing their contracting practices. The joint RFI seeks to understand how both GPOs and drug wholesalers impact the overall generic pharmaceutical market, including how both entities may influence the pricing and availability of pharmaceutical drugs. The joint RFI is asking these questions to "help uncover the root causes and potential solutions to drug shortages."
2024 marks the 40th anniversary of Hatch-Waxman, which created a pathway for the introduction of lower-cost generic drugs. The results have yielded unparalleled savings successes over the last several decades: according to AAM’s most recent annual savings report, in the last ten years alone, the use of generic drugs has saved patients and the U.S. healthcare system almost $3 trillion dollars. But this track record of success—and the resulting increase in patient access to care—is currently at risk.
For media inquiries, contact the Communications department at media@accessiblemeds.org.
About AAM
The Association for Accessible Medicines, your generics and biosimilars industry, is driven by the belief that access to safe, quality, effective medicine has a tremendous impact on a person’s life and the world around them. Generic and biosimilar medicines improve people’s lives, improving society and the economy in turn. AAM represents the manufacturers of finished generic pharmaceuticals and biosimilars, manufacturers of bulk pharmaceutical chemicals, and suppliers of other goods and services to the generic industry. Generic pharmaceuticals are 90 percent of prescriptions dispensed in the U.S. but only 17.5 percent of total drug spending.
About the Biosimilars Council
The Biosimilars Council, a division of the Association for Accessible Medicines (AAM), works to ensure a positive environment for patient access to biosimilar medicines. The Biosimilars Council is a leading source for information about the safety and efficacy of more affordable alternatives to costly brand biologic medicines. Areas of focus include public and health expert education, strategic partnerships, government affairs, legal affairs and regulatory policy. More information is available at www.biosimilarscouncil.org.