I am writing in response to Peter Pitts' recent commentary "Another View: Drug shortage policies still come up short." It would be helpful if Mr. Pitts had identified his longstanding connections to the pharmaceutical industry, which funds his organization. His piece offers a distorted and wholly self-serving explanation of drug shortages, including misplaced blame on the critically important drug discount program called 340B.
Let's be upfront: I represent a non-profit organization of more than 1,000 hospitals that participate in the 340B program. The program was created in 1992 with bipartisan congressional support and signed into law by George H.W. Bush. It was expanded to rural hospitals in 2010 thanks to the hard work of Republicans and Democrats willing to take on Big Pharma.
340B allows hospitals and community health centers that serve high percentages of needy patients to buy medicines at discounted prices. Health providers, in turn, use their savings to supply medications for free or at reduced cost to uninsured or underinsured outpatients. In addition, healthcare providers use savings achieved through 340B to provide more services to their vulnerable patients, such as funding dialysis, cancer and diabetes clinics.
After a discussion of Food and Drug Administration oversight practices, Mr. Pitts partially blames "artificially low prices" for driving drug shortages and singles out the 340B program for special criticism. He's got his facts conveniently wrong. In the government report that he cites, forty percent of shortages studied by the FDA were due to product quality problems and plant maintenance. The remainder was driven by capacity limitations, product discontinuations or an increase in demand. Neither the FDA nor any other impartial source has ever blamed price discounting for drug shortages.
So the author resorts to making false assumptions without any supporting evidence. In the case of drugs purchased through the 340B program, there is no evidence that discounts have led to shortages. In an attempt to force this connection, Mr. Pitts cites to a 2011 Health and Human Services report and suggests scarcities are price driven. But the pricing data this report relies on do not include any 340B sales. What's more, the program only accounts for two percent of the $325 billion American drug market – hardly enough to cause artificial distortions.
Following the logic of his argument, there should be massive drug shortages every day due to discounts afforded to Medicaid, the Department of Defense, and the Veterans Administration which accounts for over $36 billion in U.S. pharmaceutical spending, a much larger share of the drug market than the 340B program's $7.2 billion in drug spending. Yet, the number of new shortages is on the decline.
How is this possible? Because Mr. Pitts' arguments grossly mischaracterize the facts.
Ted Slafsky is president and chief executive Officer of Safety Net Hospitals for Pharmaceutical Access.