This bill creates a new program to prevent shortages of affordable generic medicines that Americans rely on. Here's how it works: the federal government will pay certain drug wholesalers and distributors to keep extra supplies of generic drugs on hand—specifically drugs that have been in short supply recently and are made by only a few manufacturers. These companies would maintain a six-month supply of these critical medicines, ready to release into the market if shortages occur.

The program starts in 2024 and will focus on up to 50 different generic drugs that the government identifies as at-risk for shortages. Participating companies get paid monthly fees to manage these stockpiles, and the government will give them up to 10 percent of their contract value upfront to help them buy the initial inventory. The contracts last up to three years, and companies must keep the drugs fresh by regularly selling them through normal pharmacy channels and replacing them with new stock, so nothing sits unused and expires.

This affects patients and consumers by making sure essential generic medications stay available and affordable during supply disruptions. It also affects drug distributors and wholesalers who can participate in the program and earn money for maintaining these reserves. The government is setting aside $120 million over three years to fund the program, and an independent auditor will check annually to make sure it's working as intended and actually preventing shortages.

Essential Medicines Strategic Stockpile Act of 2023

Carter, Earl L. "Buddy"

Essential Medicines Strategic Stockpile Act of 2023 This bill requires the Department of Health and Human Services (HHS) to create a pilot program to test the effectiveness of acquiring, maintaining, managing, and distributing a stockpile of generic drugs at risk of shortage. To carry out the pilot program, HHS must enter into contracts for a term of up to three years with drug manufacturers, co-op or chain pharmacy warehouses, or other eligible entities to create a six-month stockpile of up to 50 types of such drugs. The bill establishes various program requirements, including annual evaluations by the Government Accountability Office.