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Chairman Smith Opening Statement – Hearing on Chronic Drug Shortages

February 06, 2024

“It’s clear to me that we need to incentivize the development of higher quality drugs and improve purchasing dynamics without relying on mandates from Washington.” 

As prepared for delivery.

“Today, in the United States, there are over 250 medicines in short supply. These drugs treat everything from blood clots to asthma. Especially worrisome, some of these medications include those needed to treat and beat multiple kinds of cancer. Most of these are low-cost generics that make a real difference for patients struggling to pay both for medication and other health care expenses.

“Active drug shortages are at the highest levels since 2014. Over half of the medicines currently in short supply have been limited in availability for at least two years. Patients are living in fear that they may be unable to get the treatments they need when they need them.

“When a patient’s drug is out of stock, they don’t just worry about access. They also worry about how they’ll afford their medicine. It’s simple supply and demand that drives up prices. If you can get medication in shortage, you pay on average 15 percent more. Patients forced to switch to alternative therapies may be paying as much as three times more than their original medication. 

“While some temporary shortages might be caused by natural disasters or sharp demand increases, poor manufacturing quality is the leading driver of chronic shortages — and it’s the most preventable. Government policies and consolidation in the supply chain results in forcing manufacturers to close drug production because they can’t make the math work.

“Medicare’s reimbursement system ensures affordability and access for seniors, but should be reexamined to avoid making this situation worse. Everyone – drug manufacturers, wholesalers, group purchasing organizations, and medical providers – should be working together to ensure ready access and availability of medicine. We aim to learn more today about how these actors can prevent shortages and whether our federal regulations support that goal.

“Another concern of our supply chain is that many of the medications available to Americans are sourced from countries outside America. Over 80 percent of the essential ingredients used in medications taken by Americans are made in a foreign country. China, in particular, is a major supplier of pharmaceuticals and drug ingredients to the United States. 

“In 2021, China was the leading source of imported pharmaceutical products by weight to the United States. This – as with other aspects of our medical supply chain – can pose a serious risk to the American people if access to quality medications are subject to the whims of a hostile foreign power. Americans should have to rely on adversarial nations to stock their medicine cabinets.

“Fortunately, there are some innovative examples of private sector and local government solutions. One of our witnesses represents a private business who uses long-term contracts to support quality manufacturing. My good friend Governor Kristi Noem invested state funds in “buffer stocks” for South Dakota. But there is not a one-size-fits-all solution and many small, rural hospitals and communities may have a harder time procuring this medication for their patients or investing in long-term solutions.

“Washington has tried and failed to address drug shortages before. It’s clear to me that we need to incentivize the development of higher quality drugs and improve purchasing dynamics without relying on mandates from Washington. Our solutions should balance affordability with accessibility. We should be using health care, tax, and trade policy to make more medicine and their ingredients here in the United States. Congress should support access to the lifesaving therapies we do have and ensure America realizes the promise of innovative future cures to come. 

“I hope today’s hearing can help us zero in on bipartisan solutions that will get more, and better, medications into the hands of the patients who need them.”