Many U.S. hospitals and other treatment facilities are grappling with shortages of generic drugs, the cheaper alternatives to brand-name medicines. It’s a growing problem that, if left untreated, could force doctors into difficult decisions on prescriptions for ADHD treatments, antibiotics, children’s acetaminophen, and other medicines in short supply.
There are several reasons for shortages of generics and prescription drugs more broadly. Among them, fewer drug manufacturers in the United States are making generics — and profits are declining for those that do. Plus, an overly complicated global supply chain, a residue of the coronavirus pandemic, has further left some patients scrambling for lifesaving medications. Additionally, government policies designed to lower drug costs may be having the opposite effect.
SMALL BUSINESSES HELPLESS OVER SPIKE IN RETAIL THEFTS, SAY THEY FEEL ABANDONED BY LAWMAKERS
Shortages aren’t limited to widely used pharmaceuticals, such as the antibiotic amoxicillin. Also coming up short in supply are cancer drugs such as carboplatin, cisplatin, and doxorubicin.
A recent National Comprehensive Cancer Network survey found that over 9 in 10 cancer centers have struggled to find enough carboplatin, a chemotherapy drug that treats a variety of cancers, including ovarian, lung, and breast.
A page on the American Society of Health-System Pharmacists site lists over 240 drugs that are in short supply. A poll released by the group in August revealed that almost 1 in 3 hospitals are rationing or delaying the prescribing of prescription drugs. All but three of the 1,100 hospitals surveyed are struggling with a shortage to some degree.
Generic drugs are particularly vulnerable. According to the Food and Drug Administration, generic drugs account for over 70% of drug shortages.
“In some cases, there are no alternatives to the affected drugs, which puts patients at risk,” ASHP CEO Paul Abramowitz said in an Aug. 10 statement.
A recent study in the Journal of the American Medical Association found that a shortage of norepinephrine, a drug used to treat septic shock, resulted in an increase in patient deaths.
There is no precise definition of a shortage. The FDA states a shortage occurs “when the total supply of all versions of a commercially available product cannot meet the current demand.” Yet that does not take into account the length of time the drug is hard to come by. A drug that fell short of demand for a few days probably wouldn’t constitute a shortage.
“We’re not talking about a transitory thing. It’s a more extended [problem],” Geoffrey Joyce, director of health policy at the University of Southern California Schaeffer Center, said in an interview.
While drug shortages have been a problem for over a decade, many analysts agree that the problem was exacerbated by the pandemic.
“During the pandemic, China shut down factories, which are the biggest supplier of the basic ingredients for a lot of pharmaceuticals and generics,” Joyce said. “Then India, which manufactures a lot of generics, the government there said that [they] weren’t going to have any drug shortages domestically. So, they put controls on exports. It all got exaggerated.”
There are also quality problems. For example, in November 2022, the FDA found substantial quality violations at an Intas Pharmaceuticals plant in India. The Intas plant produces about 50% of the cisplatin supplied to the U.S. When the company shut down the plant to deal with the quality problems, the result was a dearth of the cancer drug in the U.S.
Joyce also argued that the problem stems from market failure. While newer drugs that are on patent often yield large profits, the margins for generic drugs are very thin, regardless of how important they are to treatment.
“Everyone from drug manufacturers to the supply chain, they are for-profit companies. They’re going to follow return on investment,” Joyce said. “Once a drug goes off patent, anyone can produce it and margins get really low.”
In response, California passed a law in 2020 that allows the state to partner with drug manufacturers to produce generic drugs. Earlier this year, California contracted with generic drug company Civica to produce insulin. Joyce said California expects the effort to be profitable but acknowledged that taxpayers could be on the hook.
Ed Haislmaier, senior research fellow at the Heritage Foundation, admitted that generic drugs have thin and volatile margins but pointed to government policies as a prime driver of shortages.
Federal law requires drugmakers to issue rebates for generic drugs purchased by Medicaid, the health program for the poor. Manufacturers must also give price discounts for generic drugs included on the Federal Supply Schedule.
“Particularly counterproductive was Congress’s decision in 2015 to apply to multisource generic drugs the requirement that manufacturers also rebate any difference between an increase in the average price of a drug and the general inflation rate, which had previously applied only to single-source drugs,” Haislmaier said. “Rather than imposing further price concessions on already low-priced generic drugs, Congress should eliminate these provisions.”
CLICK HERE TO READ MORE FROM THE WASHINGTON EXAMINER
Unfortunately, the problem appears likely to persist for the foreseeable future.
“We expect that reports of potential and actual drug shortages will continue to increase in the next months to years,” the FDA said.
David Hogberg is a contributor to the Washington Examiner.