FTC examining shortages of cancer treatments and other drugs

The Biden administration is seeking public comment on shortages of cancer treatments and other drugs related to the role that middlemen play in the pharmaceutical supply chain, the U.S. Federal Trade Commission said Wednesday.

In a joint request for information by the FTC and Department of Health and Human Services Wednesday, the federal government asked about shortages of generic drugs and whether groups that purchase quantities in bulk are contributing to the problem.

"Our inquiry requests information on the factors driving these shortages and scrutinizes the practices of opaque drug middlemen," FTC Chair Lina Khan said.

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The inquiry is targeting two types of middlemen. Group purchasing organizations like HCA Healthcare's HealthTrust, Premier and Vizient buy large quantities of drugs on behalf of hospitals and health systems. Pharmaceutical distributors or wholesalers like McKesson, Cardinal Health and Cencora, formerly known as Amerisourcebergen, buy drugs from pharmaceutical manufacturers and sell them on to pharmacies, nursing homes and health care providers.

Overall drug shortages have soared to a five-year peak as low profit margins discourage investment in generic manufacturing, allowing small disruptions to become dangerously magnified. While doctors devise workarounds, the White House has formed a task force focused on the issue and committees in the U.S. House and Senate are investigating.

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Last year, two American generic drug companies have filed for bankruptcy. Tel Aviv-based Teva Pharmaceutical Industries announced plans in May to stop producing some products that aren't making much money. 

Recently, the Biden administration tapped the Defense Production Act to enable some domestic investment in essential medicines, starting with $35 million for sterile injectable drugs.

The Wall Street Journal reported earlier on the agency's review.