With legislative efforts to combat drug shortages picking up and amid a record high number of U.S. shortages, a new report from U.S. Pharmacopeia (USP) offers more insight into the economic issues at play.
Through its Medicine Supply Map, USP pinpointed (PDF) four contributing factors that can make medicines more susceptible to supply issues. Low prices, manufacturing complexity, geographic concentration of production and quality issues can each raise the risk of a shortage, either alone or in tandem with one another.
Cheaper meds are more likely to face supply constraints due to the tight profit margins that can prompt manufacturers to quit making the drugs altogether. Between 2022 and 2023, pharmaceutical product discontinuations increased by 40%, USP found, with over half of the discontinued solid oral meds carrying a price tag less than $4.
This profitability concern was the subject of a recent Senate proposal that suggests offering incentive payments to companies in exchange for their pledges to maintain sufficient supplies. By opting into manufacturer reliability agreements, participating companies would be eligible for quarterly lump sum payments, plus potential bonuses, in exchange for producing meds at a higher shortage risk, according to a draft proposal.
"Economic pressures, especially the very low prices that generics manufacturers recover for many medicines, along with contracts that are frequently broken, have left our generic medicine supply chain fragile,” USP’s senior vice president of global external affairs Anthony Lakavage explained in a press release. “Unexpected shocks can break the system and disrupt the supply of quality medicines.”
Quality concerns, meanwhile, can also lead to a shortage when a facility gets shut down by the FDA. USP cited the case of the generic chemotherapy cisplatin as an example of this. The med has been in perpetual shortage ever since the FDA flagged safety and quality issues at the plant that was linked to at least half of all cisplatin supply for the U.S.
Not only have shortages been a more frequent occurrence, with 2023 marking the highest number of them in the last decade, but the supply issues are lasting longer, too. Only four drug shortages began and ended in 2023, according to USP. The average duration of the shortages that year was more than three years,
Without major intervention, the current shortage trends will “likely continue or worsen,” according to the report.
In January, USP joined several organizations including the American Society of Clinical Oncology and the American Society of Health-System Pharmacists in a “drug shortage task force” that together co-signed a call to action seeking a “fundamental shift” in the cheap generics market. The plea asks for moves to address short-term and long-term needs, which could include risk mitigation strategies, investment and partnerships, payment reforms and policy changes.
USP is a 200-year old nonprofit that publishes product quality, purity, strength and identity standards and guidelines that are enforced by the FDA and followed by manufacturers. Its Medicine Supply Map looks to shed light on a supply chain often marred by a lack of transparency with predictive analytics that can spot areas of risk or weaknesses, the group said in its release.