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HDA Statement on Drug Shortages

December 05, 2023

Healthcare Distribution Alliance (HDA) President and CEO Chip Davis released the following statement in response to the Senate Finance Committee hearing entitled, “Drug Shortages: Examining Supply Challenges, Impacts, and Policy Solutions from a Federal Health Program Perspective.”

“Today’s Senate Finance Committee hearing continued the important dialogue taking place between policymakers, regulators and healthcare supply chain leaders about mitigating prescription drug shortages. As the Biden administration reiterated in a recent announcement around new executive actions to ensure supply chain resilience, robust supply chains are fundamental to our national security and a strong American economy.

“While it is essential to understand the multifaceted drivers of drug shortages and pillars of supply chain resilience, we cannot lose sight of the fact that patients and providers are the most acutely affected. Ensuring medicines are there for patients when needed — and building a stronger healthcare system for all — will require collaboration from every stakeholder working across the supply chain.

“At the most basic level, supply-driven shortages (in contrast to demand-driven disruptions) are most often caused by upstream disruptions due to manufacturing or the available supply of raw materials, leading to quality and market-access issues. Shortages tend to be in the generic (84 percent) and injectable drug (67 percent) classes. As the association representing the healthcare distribution industry, HDA believes it is important to provide additional context to this discussion.

“A number of proposed ideas aim to alleviate some of the current challenges in the generic marketplace, including incentivizing a greater commitment to quality manufacturing through FDA’s Quality Management Maturity program and recommendations that large-scale generic medicine purchases take manufacturing practices of generic manufacturers into account when securing purchasing contracts. The Department of Defense also has prioritized quality in its role as a purchaser of generic medicines.

“While it is necessary to recognize that each entity must make their own individual purchasing decisions, from a public policy perspective, ensuring that high-quality, safe and effective generic medications have an acceptable value in the market and within the supply chain is vitally important to ensure the sustainability of generic manufacturers.

“When shortages do occur, HDA-member distributors actively work to mitigate the impact. Our industry regularly monitors for spikes in demand or dips in availability for products and proactively communicates in real time with manufacturers, industry partners and regulators. When necessary, our members identify substitute products for customers to meet patient needs. We have also extensive experience using fair-share allocation programs to create safeguards on products in high demand, preventing overstocking product due to fear of market shortages.

“In my testimony before the House Energy and Commerce Committee on drug shortages in September 2023, I highlighted a broad set of recommendations including opportunities to further strengthen collaboration between the public and private sectors to prevent supply chain disruptions that threaten public health.

“The pharmaceutical distribution industry has a unique vantage point, given its 360-degree view of the supply chain. We are eager to provide our ongoing perspective and partner with legislators, regulators and leaders across the supply chain on real solutions to this complicated challenge. Leveraging our experience and capabilities, together we can build a strong and resilient pharmaceutical supply chain for patients.”

For additional information on HDA distributor members’ commitment to mitigating drug shortages, visit HDA.org.