What's causing the shortages?

Drug shortages are happening at an unprecedented rate. Just in the last 2 months, we have seen shortages of diazepam, methotrexate, leucovorin, naltrexone, oxymorphone, mitomycin, fentanyl, metoclopramide, pantoprazole, ondansetron, and dexamethasone among others. What is causing the shortages and is there any end in sight? Although it seems like a new problem, we have seen an increasing number of drug shortages going back to 2005. But while there were about 50 drug shortages in the mid 2000s, last year more than 260 drugs were in short supply, including many commonly used and clinically vital drugs. The cause of these shortages is multifactorial. Some sources in the industry blame price controls, especially for generic drugs. Medicare and Medicaid impose strict controls on most generics, squeezing pharmaceutical companies' ability to make a profit. Some companies have simply decided to drop out of the generic market altogether. Others blame fewer manufacturers. The Wall Street Journal reports that there were 26 vaccine makers in the United States in 1967, while currently there are only six. But even these issues do not explain the severe shortages we are seeing. Most experts agree the two major issues causing the current shortages are supply chain disruptions, especially disruptions in raw materials, and problems with manufacturing, especially safety issues, which force the FDA to shut down production of a product line or an entire factory. Safety shutdowns are the most common cause of shortages of sterile injectable drugs. But in other cases, companies limit production themselves when they either have an absolute shortage of raw materials or they decide to divert limited supplies of raw materials from less expensive generics to more expensive brand-name drugs. This is a current issue with some of the attention deficit hyperactivity disorder drugs that have been in short supply for several months. Last month, the FDA initiated a series of steps to increase the supply of critically needed cancer drugs, including allowing the importation of drugs in shortage from Europe and elsewhere. The agency is also fast tracking approval of new manufacturers for short-supply drugs like methotrexate. The FDA, as well as the Obama administration, is also requiring companies to give early warning of potential drug shortages. Finally, the Justice Department will aggressively pursue possible incidences of collusion or price gouging among drug distributors who may be taking advantage of shortages. Despite these steps, there will likely be no short-term easing in drug shortages.