Drug price caps in Inflation Reduction Act exacerbating shortages, Gottlieb says

Former Food and Drug Administration (FDA) Commissioner Scott Gottlieb said on Sunday that drug price caps in the Inflation Reduction Act are exacerbating drug shortages.

“The features under the Inflation Reduction Act will exacerbate this problem, because it’ll prevent these generic manufacturers from being able to take price increases,” Gottlieb, who now serves on the board of Pfizer, told CBS’ “Face the Nation.” 

“For example, if they enter a market for the first time, or they spend a lot of money upgrading a facility to be compliant with state-of-the-art regulations, they’re not gonna be able to take a price increase to recoup some of those costs,” he added. “So, it’s going to come out of their own pocket.”

Gottlieb said that sterile injectable drugs are particularly susceptible to shortages, suggesting that they should be carved out of the Inflation Reduction Act. 

“The reimbursement for these drugs under government programs has been driven down very low, something above the marginal cost of manufacturing the drugs, and that’s fine when it comes to a pill form drug where there’s not a lot that can go wrong.”

“But when it comes to an injectable drug, you need to leave a margin in so people can reinvest in manufacturing facilities, make sure they’re high quality,” he added. “They haven’t done that, and things go wrong, and it results in shortages.”

A March report from the Senate Committee on Homeland Security and Governmental Affairs found that there were more than 295 active drug shortages at the end of 2022, marking a five-year high.