What’s causing the growth in drug shortages?

Posted: October 4, 2024

Active drug shortages in the U.S  hit an all-time high in the first three months of 2024, with 323 drugs missing from pharmacy shelves. According to the American Society of Health-System Pharmacists (ASHP) and the University of Utah Drug Information Service data, today, there are more active drug shortages in the US than ever. However, there has been a slight decrease in active shortages since earlier in the year. “It’s long past time to put an end to drug shortages,” wrote Paul Abramowitz, chief executive officer of the ASHP, in a blog post last April.

He wrote that every class of drugs is susceptible to shortages, but some pose particular concern. Among these are generic sterile injectable medications, including chemotherapy drugs and emergency medications found in hospital crash carts and procedural areas. Antimicrobials, painkillers, and essential drugs for common medical conditions such as diabetes and rheumatoid arthritis are also in short supply.

The current issue is mostly the result of structural factors such as rising internationalization of the supply chain for crucial off-patent drugs and market consolidation. These changes, combined with external events such as natural disasters and, most recently, the pandemic, have made supplies of active medicinal ingredients particularly vulnerable.

What’s driving drug shortages?

Medication manufacturing happens in two steps. Step one is to prepare the active pharmaceutical ingredient (API). The second step, which often happens in a different facility, is to mix the API with other inactive chemicals, such as preservatives. The finished medication is then distributed across the world.

The US relies on Indian and Chinese factories for both stages of the manufacturing process because of cheaper costs. “The more you rely on a producer far away, the more vulnerable you are to drug shortages,” Mujaheed Shaikh, a professor of health governance at Berlin’s Hertie School, told the Financial Times last March.

The global reliance on a few geolocalized manufacturers means that any disruption—whether due to raw material shortages or logistical challenges—can have worldwide consequences. For example, when the COVID-19 pandemic locked down China and India, production lines shut for months.

Market dynamics also contribute significantly to drug shortages. Many generic drugs, which represent 91% of prescriptions in the US, have tight profit margins that discourage manufacturers from producing them in favor of innovative high-margin medicines.

What are possible solutions?

This multifactorial issue requires a multifaceted approach. Earlier this year, the U.S. Department of Health and Human Services released a white paper with potential solutions:

• Economic benefits, such as tax breaks or subsidies, could encourage more manufacturers to produce less profitable but essential medicines.
•  Investing in domestic production of essential medicines can reduce dependency on foreign manufacturers. For instance, last November, the Biden administration announced an investment of $35 million in the domestic manufacturing of generic sterile injectables.
• Streamlining regulatory compliance and fast-tracking approval for alternative suppliers or production sites can reduce timelines.
• A real-time centralized reporting system that tracks and forecasts shortages could alert hospitals, pharmacies, and healthcare professionals before a crisis occurs.

But solutions come with a high price. “There is no free lunch,” Marta Wosinska, a senior fellow at the Brookings Institution and a drug shortage expert, told Science Friday in July. “The reason why we have this problem is because we’re not willing to spend the money on resilience for our supply chains.”