Generic Drug Shortage

Senate Finance leaders unveiled draft legislation intended to ease the generic drug shortages. The draft introduced by Sens. Wyden (D-OR) and Crapo (R-ID) would create a voluntary program within Medicare to change the way health care providers buy generic drugs. Its goal is to get providers and group purchasing organizations (GPOs) to set up contracts and purchasing practices that result in a healthy supply chain for generic drugs. GPOs, are middlemen that help hospitals and health care providers purchase drugs and other supplies, usually at the lowest cost possible. These organizations have been criticized for driving generic drug shortages through questionable contracting practices and limited competition. The bill would exempt some generic drugmakers participating in the Medicaid program from being penalized for increasing prices faster than the rate of inflation.