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This month, the U.S. Department of Health and Human Services (HHS) published a white paper titled, “Policy Considerations to Prevent Drug Shortages and Mitigate Supply Chain Vulnerabilities in the United States,” outlining the agency’s approach for addressing drug shortages and proposing potential actions for policymakers’ consideration.
In the white paper, HHS described the impacts of drug shortages on the U.S. health care system and pointed to a number of market conditions that have led to supply chain disruptions, such as lack of manufacturing transparency and low prices representing inadequate incentives for pharmaceutical companies to produce generic drugs. HHS emphasized the need for federal government action to strengthen the resilience of drug supply chains and mitigate shortages.
In addition to highlighting recent steps taken by HHS to mitigate shortages, the white paper proposed a public-private partnership to develop a Hospital Resilient Supply Program (HRSP) and a Manufacturing Resiliency Assessment Program (MRAP) – these programs would incentivize adherence to drug shortage prevention best practices for hospitals and manufacturers respectively.
HRSP is proposed as a system that would tie Medicare payments to drug supply actions related to inventory management and drug contracting practices. The white paper stated that HRSP could include both incentive payments and penalties at the hospital level. MRAP would hold manufacturers to yet-to-be-developed benchmarks and metrics for manufacturing resilience around elements such as redundancies and product quality management under the premise that recognition from HHS would provide a market advantage to participating companies.
Some of HHS’ key proposals, including HRSP and MRAP, would require authorization from Congress.
For more information, please see HHS’ press release and the full white paper.
Please contact the ASA Department of Quality and Regulatory Affairs at [email protected] with any questions.
Date of last update: April 15, 2024
