On October 31st, 2011, President Obama signed an Executive Order directing the Food and Drug Administration (FDA) to take action to help further prevent and reduce prescription drug shortages, protect consumers and prevent price gouging. The President’s order directs FDA to broaden reporting of potential shortages of certain prescription drugs and to further expedite regulatory reviews that can help prevent or respond to shortages. Under the President’s order, FDA will also work with to the Department of Justice, which will examine whether potential shortages have led to illegal price gouging or stockpiling of life-saving medications.
In addition to signing the Executive Order, the White House announced the President’s support for bipartisan legislation (H.R. 2245 and S. 296) that will build on today’s actions to strengthen the FDA’s ability to prevent prescription drug shortages.
A small number of drugs in the U.S. experience a shortage in any given year, but the number of reported prescription drug shortages in the United States nearly tripled between 2005 and 2010. While FDA successfully prevented 137 drug shortages between January 1, 2010 and September 26, 2011, prescription drug shortages continue to threaten the health and safety of the American people.
These shortages could lead to price gouging, which has raised serious concerns. For example, the ranking member of the House Committee on Oversight and Government Reforms, when announcing his investigation into so-called gray markets, expressed concerns about a report that a leukemia drug whose typical contract price is about $12 per vial was being sold at $990 per vial – 80 times higher. A Premier healthcare alliance report released in August estimated that the typical gray market vendor marks up prices by an averaged 650 percent. At the extreme, a drug used to treat high blood pressure that was normally priced at $25.90 was being sold at $1,200 due to a drug shortage.
“The shortage of prescription drugs drives up costs, leaves consumers vulnerable to price gouging and threatens our health and safety,” said President Obama. “This is a problem we can’t wait to fix. That’s why today, I am directing my administration to take steps to protect consumers from drug shortages, and I’m committed to working with Congress and industry to keep tackling this problem going forward.”
Early notification of potential drug shortages can help prevent a shortage from becoming a crisis by allowing hospitals, doctors
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