Drug Shortages Mostly Involve Low-Cost Generics
/By Pat Anson, PNN Editor
Drug shortages in the United States are primarily being driven by low profit margins – not supply chain problems – according to a new analysis that found 84% of medicines currently in shortage are low-cost generics. Prices for some generic medicines are so low that manufacturers have stopped making the drugs.
The study by the IQVIA Institute, a healthcare data tracking firm, identified 132 medications in shortage as of June 2023, with pain/anesthesia drugs as the therapy area with the greatest number (21) of shortages. The shortages are so acute that elective procedures requiring anesthesia are being cancelled or postponed.
“Anesthesia medicines, including general, local, and muscle relaxants, are foundational to inpatient and outpatient surgical procedures, and shortages in these medicines can result in delays for patients receiving procedures and hospitals making prioritization decisions based on available supply,” the IQVIA said.
“Shortages across these medicines complicate scheduling of a wide range of procedures and surgeries, which may be part of a broad-based reduction observed in elective procedures in post-pandemic periods.”
One weakness of the IQVIA report is that it relies solely on drug shortage data from the Food and Drug Administration. The American Society of Health-System Pharmacists (ASHP) currently lists 242 medicines in short supply, nearly twice the number listed by the FDA.
Three generic opioid medications commonly taken for pain, immediate-release oxycodone, oxycodone-acetaminophen, and hydrocodone-acetaminophen tablets have been on the ASHP shortage list for months, but have yet to appear on the FDA’s shortage list.
Pain patients are feeling the impact of short supplies. In recent months, many have complained about problems or delays getting their opioid prescriptions filled at U.S. pharmacies.
“It has been a month since I had my last refill and no pharmacy can give me an answer as to when they may be back in stock. In the meantime, I just live in misery,” one patient told us.
“Mobile, Alabama seems to be almost completely out of pain medication, specifically the most widely used mg of oxycodone-acetaminophen and hydrocodone. I was supposed to get my refill from Walgreens… and they are not only out but cannot order more,” another patient said. “This is such a serious issue with a lot of people probably going through withdrawals in our county and nobody seems to care.”
‘Prices May Be Too Low’
Teva Pharmaceuticals, a large generic drug maker, has informed the FDA that it is discontinuing production of immediate-release oxycodone tablets. The move appears to be in line with Teva's announcement that it would reduce its production of generics from 80% of its drug portfolio to 60% over the next few years.
“The drugs we’re pulling out of are drugs which are low-margin,” Teva CEO Richard Francis recently told Bloomberg.
The IQVIA found that over half (56%) the medicines in short supply are low-cost generics priced at less than $1 per unit. In many cases, that’s below the manufacturer’s cost of production and distribution. Because the generic drug industry is highly concentrated with few suppliers, any disruption or discontinuation of a generic can have an outsized impact.
“Generic medicines are much lower cost than brands and some observers have begun to suggest that some generic prices may be too low to support sustainable markets,” IQVIA found. “Prices driven below the cost of manufacturing and distributing can result in some competitors discontinuing production of molecules (medicines), reducing necessary maintenance activities and generally contributing to less resilience in manufacturing supply of those medicines.”
Other highlights of the IQVIA report:
120 of the 132 drug shortages listed by FDA involve generics. Only 12 drugs are brand name
75% of current drug shortages have been active for over a year and 58% have lasted at least two years
Three times as many new drug shortages have been reported than have been resolved in recent years
67% of shortages involve injectable drugs
Shortages of antibacterial medication “are a significant concern affecting multiple aspects of healthcare delivery”
Shortages of cancer treatment drugs have forced some oncology providers to suspend or delay treatments
Federal agencies appear to have inadvertently contributed to some of the shortages. The IQVIA said FDA inspections of drug manufacturing plants have triggered shutdowns of some sites due to safety or sanitation issues. Those shortages “are difficult for their peers to resolve,” according to IQVIA, because few other companies can pick up the slack.
A generic manufacturer of oxycodone, hydrocodone and ADHD medication recently sued the DEA after the agency suspended its drug production license over record-keeping issues. The lawsuit by Ascent Pharmaceuticals accused the DEA of incompetence and heavy-handed regulation of the nation’s drug supply.
In the past year, under the DEA’s ironically named “Operation Bottleneck” initiative, the agency has taken administrative actions against 143 DEA-registered doctors, pharmacies, drug makers and drug distributors, largely over allegations of poor record-keeping and inadequate controls to prevent the diversion and theft of opioids and other controlled substances.
“These companies have a legal obligation to account for every dose and every pill to protect the safety and health of the American people,” said DEA Administrator Anne Milgram. “DEA will continue using every available tool to prevent the diversion and misuse of opioids and other highly addictive controlled substances.”
DEA recently announced plans to further reduce the supply of opioid pain medication in 2024 -- which would be the eighth consecutive year the agency has reduced opioid production quotas for drug manufacturers. DEA said it was acting on the advice of the FDA, which estimates that medical need for Schedule II opioids will decline on average 7.9 percent from 2023 levels.
