As lawmakers and industry groups seek to get a handle on U.S. drug shortages, a new white paper from German market analytics firm QYOBO supports the thesis that disproportionately low prices for generic medicines can make it difficult for drugmakers to keep supplies afloat.
Chief among the insights from QYOBO’s research, the company discovered that net sales prices for drugs that have faced shortages in recent years have plummeted in many cases.
Of drugs that have fallen into short supply in recent years, 83% saw their net sales prices slip between 2020 and 2022, according to QYOBO. Conversely, 17% of shortage-affected drugs have seen net price increases during that stretch.
Price cuts have proven especially detrimental for liquid and semi-solid dosage forms like creams, gels and injectables, the analytics firm noted. Overall, creams saw the greatest price cuts, followed by gels, lotions, transdermal patches and injectables.
Taking a closer look at injectables, those with shortages saw average price decreases of 23% versus 12% for those not affected by shortages.
“The data strongly support the hypothesis that the relentless drive to lower prices in the generics industry adversely affects supply security,” QYOBO said in its white paper.
QYOBO generated its report by looking at the relationship between drug shortages and net sales prices for a clutch of products in the U.S. market. The group specifically looked at net sales figures from 400 products sold by a “large multi-national generics company.” The group also leveraged information from the FDA’s online drug shortage database.
Concerns about poor generic profitability and its ties to the current drug shortage conundrum aren't unique to QYOBO.
Back in February, ASCO’s chief medical officer Julie Gralow, M.D., told lawmakers in prepared testimony for a Congressional hearing that they should roll out incentives to boost U.S. manufacturing and consider alternative payment schemes to take the pressure off “artificially low” reimbursement rates on copycat drugs.
In early May, lawmakers from the Senate Finance Committee introduced a draft proposal for a new voluntary Medicare program that would do just that, seeking to bolster purchasing patterns by offering monetary incentives to hospitals and physicians if they strike deals that preserve supply.
The program would incentivize multi-year minimum contracts with generics manufacturers, It would also call for greater purchase volume commitments and contingency contracts with alternative suppliers.
U.S. drug shortages, which have been a persistent thorn in the healthcare system’s side for several years now, recently reached a new high, according to the American Society of Health-System Pharmacists (ASHP). More than 300 medicines were in shortage as of 2024’s first quarter—the highest amount recorded since ASHP started tracking shortage data in 2001.
ASHP’s findings solidified that generics comprise the majority of shortages, with copycat injectables especially vulnerable to supply chain snafus.