Short on Competition Act
- Bill Number
- S. 2345
- Origin Chamber
- Senate
- Congress
- 119th Congress, Session 1
- Policy Area
- Health
- Status
- Introduced
- Latest Action
- 2025-07-17: Read twice and referred to the Committee on Health, Education, Labor, and Pensions.
- Last Updated
- 2026-04-24T16:38:14Z
AI-Generated Summary
Purpose
The "Short on Competition Act" (S. 2345) aims to address drug shortages and limited competition in the prescription drug market by enabling faster approval of generic drugs and allowing temporary importation of certain foreign drugs. This is intended to increase supply, promote competition, and potentially lower costs for consumers when U.S. markets have few options.
Key Provisions
- Temporary Importation for Drug Shortages (New Subsection 506C(h) of the FD&C Act):
- The Secretary of Health and Human Services (via the FDA) must authorize importation of a drug for up to 3 years if a shortage exists or is likely, based on notifications or other data.
- Eligible drugs must be prescription drugs (or combination products primarily acting as drugs), lawfully marketed in specified countries (e.g., Canada, EU nations), have the same active ingredient as the U.S. shortaged drug, and come from a manufacturer planning to seek U.S. generic approval.
- Importers must file a request attesting to these conditions and identifying the drug and foreign manufacturer.
- Authorization begins within 60 days of the request if conditions are met.
- The FDA can deny importation if the drug is deemed unsafe or ineffective, involves an unsafe device, or has had marketing approval withdrawn abroad due to safety concerns.
- Importation ends after 3 years or when the shortage resolves, whichever comes first.
- Treatment of Marginally Competitive Markets as Shortages (New Section 506C-2):
- A "marginally competitive market" is defined for drugs approved over 10 years ago with expired patents on active ingredients, where fewer than 5 approved versions (brand or generic) have been commercially available in the U.S. for at least 2 consecutive months.
- "Commercially available" excludes drugs discontinued by manufacturers, withdrawn from the market, or deemed not competitively relevant by the FDA. If one company holds multiple approvals for the same drug, only one counts toward the 5-drug threshold.
- Such markets are treated as drug shortages, triggering expedited FDA review of applications and inspections, and mandatory temporary importation as outlined above.
- Excludes radiopharmaceuticals (drugs using radioactive materials for diagnosis/treatment) or other products designated by the FDA.
- Enhanced Reporting Requirements:
- Annual FDA reports on drug shortages must now include the number of drugs authorized for temporary importation under the new provisions.
Significant Changes to Existing Law
- Expands Section 506C of the Federal Food, Drug, and Cosmetic Act (FD&C Act), which previously allowed limited importation only in declared emergencies, by adding routine temporary importation for shortages and low-competition scenarios without needing a formal emergency declaration.
- Introduces a new definition and trigger for "marginally competitive markets," treating them equivalently to shortages for expedited processes—previously, low competition alone did not automatically qualify for such measures.
- Adds reporting on importations to improve transparency on shortage responses, building on existing annual shortage reports.
- These changes do not apply to certain controlled substances or other excluded drugs under prior importation rules (e.g., Section 804).
Potential Impacts
- On Government Agencies: The FDA will face increased workload for reviews, inspections, and importation approvals, potentially straining resources but improving shortage monitoring and response times.
- On Citizens: Patients could benefit from quicker access to affordable generic alternatives during shortages or low-competition periods, reducing out-of-pocket costs and improving treatment availability, especially for essential medications.
- On International Relations: Facilitates trade in pharmaceuticals with approved countries (e.g., Canada, Australia), potentially strengthening ties but requiring coordination on safety standards to avoid disputes over drug quality.
- Overall, the bill could enhance drug supply chain resilience but might lead to short-term disruptions if importations reveal quality issues with foreign drugs.
Main Stakeholders Affected
- Patients and Consumers: Primary beneficiaries through increased access to lower-cost drugs.
- Drug Manufacturers: Brand-name companies may face more competition from generics and imports; generic manufacturers gain expedited pathways to market entry.
- Importers and Pharmacies: New opportunities to import and distribute drugs, but must comply with certification and filing requirements.
- Healthcare Providers: Easier sourcing of drugs during shortages, reducing treatment delays.
- FDA and Government: Responsible for determinations, approvals, and oversight, with added accountability via reporting.
Notable Legal, Constitutional, or Political Implications
- Legal: Strengthens FDA authority under the FD&C Act to intervene in market failures without new rulemaking, but includes safeguards (e.g., safety denials) to align with existing drug approval standards. Could face challenges if importations lead to adverse events, potentially invoking product liability laws.
- Constitutional: Supports the Commerce Clause by regulating interstate and international drug trade to protect public health, without apparent conflicts with federal preemption over drug safety.
- Political: Bipartisan sponsorship (e.g., Sens. Klobuchar, Lee, Durbin, Grassley) signals broad support for tackling high drug prices and shortages, a key public concern. May influence future pharma policy debates on competition vs. innovation incentives, but excludes biologics or certain drugs to avoid overreach.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Cosponsors (3)
Sen. Lee, Mike [R-UT], Sen. Durbin, Richard J. [D-IL], Sen. Grassley, Chuck [R-IA]
Recent Actions
- 2025-07-17: Read twice and referred to the Committee on Health, Education, Labor, and Pensions.
- 2025-07-17: Introduced in Senate
Bill Versions
- Short on Competition Act — issued 2025-07-17 — PDF (7 pages)