There is no question that a drug shortage can create serious problems within the medical community for both patients and care providers. However, I would argue that trying to oversimplify the issue or narrow it down to a single cause is ignoring the factors contributing to the overall shortage. As such, there is no single solution but a need to change regulations to account for multiple contributing factors.
It is important to note that these shortages are most often related to low-cost, generic drugs critical for disease treatment. For example, the scarcity of injectable talc makes it difficult to treat pleural effusion. Injectable talc can relieve patients for months and comes at a low cost of just $120 per 30 grams (Loftus, 2017). However, drug shortages force doctors to seek more expensive but more readily available alternatives. Low-cost injectable drugs are often disrupted or involved in the drug shortage (Gottleib, 2011). As such, it is critical to understand the causes of these shortages.
First, there is the issue of the supply chain. Irregularity or disturbances in the supply chain can alter the production of drugs. For example, many manufacturers have reported, at various points, suffering from difficulties gaining enough raw materials to create certain drugs. This, in turn, reduces the amount of these drugs, especially generic low-cost drugs, that can be produced.
The second set of factors is regulatory factors, including price fixing, which create challenges in distributing and purchasing drugs. In essence, these regulations fail to allow for a consistent and competitive market to be established and instead create strange surges in demand, cause hospitals to buy up and hoard drugs, and discourage businesses from continuing to produce drugs for which profit margins are already low.
These regulations lead to a third set of factors influencing drug availability: business decision-making. The design of regulation and changing requirements, as they relate to regulation, are meant to make generic drugs safer by increasing oversight of how they are manufactured. However, they also force businesses to continuously upgrade their manufacturing equipment. This leads businesses to make hard business decisions, including not to manufacture generic drugs with low-profit margins when regulations change and upgrades are needed. In short, they determine that the upgrade cost is too high, based on the company’s ability to realize a profit from the drugs created on that line.
Thus, given that the bulk of the factors contributing to the drug shortage somehow tie back to regulation, the best solution is to remove regulation that prevents businesses from being profitable. This could include changing the way that Medicare approaches payment for these generic drugs, ensuring a competitive market, and reducing the need for businesses to upgrade their production lines in ways that lead to the businesses stopping production rather than upgrading.
References:
Gottleib, S. (2011, November 4). Solving the growing drug shortage. Wall Street Journal.
Loftus, P. (2017, July 1). Shortages of simple drugs thwart treatments. Wall Street Journal.