New FDA report claims low prices contribute to drug shortages

A report from the FDA’s Drug Shortages Task Force claims one of the root causes of drug shortages is the low price of older generic medications. The task force, which is made up of members several federal agencies, released the report October 29. It examined 163 different drugs which experienced shortages. The overall conclusion of the report is that, due to medications not following generally accepted rules of supply and demand, any time there is a quality issue with a drug the manufacturers have trouble replacing the flawed stock due to economic factors. The price of these older generic drugs was listed in the report as the first root cause of drug shortages which have led to 56 percent of hospitals reporting they had changed a patient’s treatment as a result of a shortage. Low prices, the report claims, limit a manufacturer’s profitability and makes them less motivated to stay in or enter the market for these older generic drugs and invest in manufacturing quality and redundancy. The report also identifies the lack of available information on which facilities produce drugs thus inhibiting the market from rewarding quality producers as another root cause. This leads manufacturers to limit their investment in manufacturing quality. The last root cause the report identifies is that after a supply disruption, sometimes caused by lax quality management, logistical and regulatory challenges make it difficult for the market to recover.

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