Gasp -- ASP!

  • by: |
  • 04/23/2012

When it comes to drug shortages, pounding Big Pharma isn’t the answer. Finally someone is focusing on the perverse economic incentives of Average Sales Price (ASP) as a key factor behind the problem.  And that someone is Senator Orrin Hatch (R, UT.)

Patient Access to Drugs in Shortage Act is out for comment through April 25, 2012. This proposed legislation is the only bill dealing with the economic causes of the shortages.

Some important codicils include:

* Price Stability — The draft would change the Medicare reimbursement rate for generic injectable products with 4 or fewer active manufacturers from Average Sales Price (ASP) + 6% to Wholesale Acquisition Cost (WAC) in order to achieve market price stability.

* Medicaid/340B Rebate Exemption — The draft exempts generic injectable products with 4 or fewer active manufacturers from Medicaid rebates and 340B discounts in order to achieve market price stability.

* Extended Exclusivity — Manufacturers who hold an approved application for a drug that would mitigate a shortage can extend by 5 years any period of exclusivity, even if the drug is eventually moved from drug shortage designation.

* Drug Shortage Database — The Secretary would establish a mechanism by which health care providers and other third-party organizations may report evidence of a drug shortage.

This last point may sound innocuous – but it’s crucial. There are many players in the drug shortage game – not just innovator pharmaceutical companies and the FDA. There are generics manufacturers, hospitals, Group Purchasing Organizations (GPOs), and physicians.  (For more on the GPO issue, see this new op-ed in today’s Washington Examiner).

As the Japanese say – don’t fix the blame; fix the problem.


Center for Medicine in the Public Interest is a nonprofit, non-partisan organization promoting innovative solutions that advance medical progress, reduce health disparities, extend life and make health care more affordable, preventive and patient-centered. CMPI also provides the public, policymakers and the media a reliable source of independent scientific analysis on issues ranging from personalized medicine, food and drug safety, health care reform and comparative effectiveness.

Blog Roll

Alliance for Patient Access Alternative Health Practice
Better Health
Biotech Blog
CA Medicine man
Cafe Pharma
Campaign for Modern Medicines
Carlat Psychiatry Blog
Clinical Psychology and Psychiatry: A Closer Look
Conservative's Forum
Club For Growth
Diabetes Mine
Disruptive Women
Doctors For Patient Care
Dr. Gov
Drug Channels
DTC Perspectives
Envisioning 2.0
FDA Law Blog
Fierce Pharma
Fresh Air Fund
Furious Seasons
Gel Health News
Hands Off My Health
Health Business Blog
Health Care BS
Health Care for All
Healthy Skepticism
Hooked: Ethics, Medicine, and Pharma
Hugh Hewitt
In the Pipeline
In Vivo
Internet Drug News
Jaz'd Healthcare
Jaz'd Pharmaceutical Industry
Jim Edwards' NRx
Kaus Files
Laffer Health Care Report
Little Green Footballs
Med Buzz
Media Research Center
More than Medicine
National Review
Neuroethics & Law
Nurses For Reform
Nurses For Reform Blog
Opinion Journal
Orange Book
Peter Rost
Pharm Aid
Pharma Blog Review
Pharma Blogsphere
Pharma Marketing Blog
Pharmacology Corner
Pharmaceutical Business Review
Piper Report
Prescription for a Cure
Public Plan Facts
Real Clear Politics
Shark Report
Shearlings Got Plowed
Taking Back America
Terra Sigillata
The Cycle
The Catalyst
The Lonely Conservative
Town Hall
Washington Monthly
World of DTC Marketing
WSJ Health Blog