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Drug shortages will be difficult to solve

I'm deep in the throes of writing my article for the next issue of Stanford Medicine, and this post at Science-Based Medicine caught my attention. I'm working on a comprehensive review of the state of cancer research and therapies in the country (yeah, not intimidating at all), and one issue I've been pondering is the shocking problem of how many oncology medications are in scarce supply - or even unavailable - in the United States. It's estimated that over 180 drugs are affected and the problem isn't going away. The numbers reached a high in the first part of 2011. Some of these medications aren't even being made available to new cancer patients at all, in order to increase the chances that current recipients will have what they need to finish their treatments.

I really had no idea.

The possible reasons for this problem are many, according to the post's author, pharmacist Scott Gavura. And the complex regulatory system in our country means there's no easy fix:

While there is no shortage of policy papers, summits and calls for greater (or reduced) regulation, there’s been very little concrete action taken to actually solve the problem. And that’s because no group, agency or even country has control and influence over the entire supply chain. And more importantly, no group or regulator has the responsibility for ensuring that shortages don’t occur.

Gavura's commentary was especially interesting to me because it builds on, and somewhat refutes, a recent opinion piece in the New York Times by former White House adviser Ezekiel Emanuel. In the Aug. 6 column, Emanuel concludes that the shortage is primarily due to dysfunctional reimbursement policies proscribed by the Medicare Prescription Drug, Improvement and Modernization Act of 2003:

It required Medicare to pay the physicians who prescribed the drugs based on a drug’s actual average selling price, plus 6 percent for handling. And indirectly — because of the time it takes drug companies to compile actual sales data and the government to revise the average selling price — it restricted the price from increasing by more than 6 percent every six months.

The act had an unintended consequence. In the first two or three years after a cancer drug goes generic, its price can drop by as much as 90 percent as manufacturers compete for market share. But if a shortage develops, the drug’s price should be able to increase again to attract more manufacturers. Because the 2003 act effectively limits drug price increases, it prevents this from happening. The low profit margins mean that manufacturers face a hard choice: lose money producing a lifesaving drug or switch limited production capacity to a more lucrative drug.

Gavura argues that, because drug shortages are occurring all over the world, it's incorrect to place all the blame on American drug reimbursement policies. He analysis is extensive, and well worth reading if you're interested in the topic (or looking to procrastinate writing that big, intimidating article). The comment thread is also quite lively. Enjoy!

Photo by Brian J. Matis (Thanks, Brian!)

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