Obama to take executive action on drug shortages

Reuters News
Posted: Oct 31, 2011 4:03 PM
Obama to take executive action on drug shortages

WASHINGTON (Reuters) - President Barack Obama will sign an executive order on Monday to tackle an escalating shortage of life-saving medicines, including cancer treatments, according to a White House official.

Hospitals and doctors across the country have been postponing care or using second-best or more costly alternatives, meaning hundreds of thousands of patients may not get the full care they need.

A proposed law to address the shortage has stalled in Congress since February, despite bipartisan support. Struggling with weak poll numbers of around 44 percent that could jeopardize his hopes for re-election in 2012, Obama wants to show U.S. voters he is acting to help them even as a divided Congress is slow to pass new legislation.

"We can't wait to act. The shortage of prescription drugs drives up costs, leaves consumers vulnerable to price gouging and threatens our health and safety," the White House official said.

The official said the order would direct the U.S. Food and Drug Administration "to take action to help further reduce and prevent drug shortages, protect consumers and prevent price gouging."

There are over 200 scarce medicines this year alone, up from 56 in 2006, according to the FDA. Most of them are cheaper generic drugs that have been around for years, but yield low profit margins for their manufacturers.

Distributors in the so-called "gray market" are suspected of exploiting the situation to peddle the drugs at hundred-fold mark-ups, according to lawmakers investigating the situation.

Obama's executive order is likely to mirror what is already in the bill, which requires companies to give the FDA early notification of a looming shortage. Companies have also asked the agency to remove administrative hurdles that could help them change or ramp up production to address shortages.

However, the order is unlikely to address the underlying causes of the shortage, as regulators told Reuters they are still unable to identify why it is happening.

The signing of the order is scheduled for 12:20 p.m. EDT. Obama is also expected to give his support to legislation pending in the House of Representatives and Senate that would give the FDA new tools to prevent drug shortages.

The prescription drug order is the latest in a series of actions Obama is taking that do not require congressional approval. Obama, who is trying to pressure Republicans to drop their resistance to his $447 billion jobs package, has promised to take new executive actions on the economy each week.

(Reporting by Caren Bohan and Anna Yukhananov; Editing by Eric Walsh, Dave Zimmerman)