HSP

President Barack Obama will announce his support for legislation aimed at helping the U.S. Food and Drug Administration address a shortage of chemotherapy and other critical care drugs, according to an administration official.

Obama will also sign an executive order Monday directing the FDA to take action "to help further reduce and prevent drug shortages," said the official, although it is not immediately clear the specific steps the agency is being asked to take.

Bills introduced in the House and Senate would require companies to notify the FDA when they have a problem that could result in a shortage. Current law requires companies to report to the FDA in cases when they are the only supplier of a drug and they plan to stop making it.

The Food and Drug Administration reported a record 178 drug shortages in 2010 and has said there is a greater number of shortages so far this year. Most of the shortages involve older, generic drugs administered by injection or intravenously. Along with cancer drugs they also include antibiotics to treat infections and nutritional drugs for patients who can't eat.

Most of the drugs are generic, not highly profitable and are now made by only one or two companies. Teva Pharmaceutical Industries Ltd. (TEVA) and Hospira Inc. (HSP) are two of the bigger producers of generic drugs.

The shortages are growing more severe, in part, because of industry consolidation and manufacturing problems in the past year. When one company runs into a manufacturing problem with a product or decides to stop making a drug, competing companies can't quickly fill the void.

Production at a Hospira plant in North Carolina has been slowed down in recent months as the company works to fix a variety of manufacturing problems. In April, Teva reopened a California plant that it had shut down voluntarily for about a year, in part to retool to meet FDA manufacturing guidelines.

-By Jennifer Corbett Dooren, Dow Jones Newswires; 202-862-9294; jennifer.corbett@dowjones.com

--Jared A. Favole contributed to this article.

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