Us drug shortages hit a new high: supply chain disruptions to blame

Recently, the United States is facing a drug shortage crisis of unprecedented scale. According to data released by the American Society of Health System Pharmacists (ASHP) and the Utah Drug Information Service, there were 323 drug shortages nationwide in the first three months of 2024, the highest number since 2001 and surpassing the previous record of 320 drug shortages in 2014.

The shortage involves a wide range of drugs, from emergency injections to diabetes treatments. These include the widely known diabetes drugs Ozempic and Mounjaro, the allergy treatment epinephrine, the antibiotic amoxicillin commonly used in children, as well as chemotherapy drugs and injections commonly used in hospitals in intensive care.

ASHP CEO Paul Abramowitz said in a statement, "Virtually every class of drug is at risk of potential shortages. Of greatest concern is the shortage of generic sterile injectable drugs, including cancer chemotherapy drugs and emergency drugs stored in hospital ambulances and operating areas."

Last year, the American Cancer Society warned that chemotherapy drugs were among the five most affected by shortages and could have a devastating impact on patients. At present, some hospitals and clinics have completely run out of certain chemotherapy drugs, forcing doctors to ration drugs or triage patients.

Industry insiders point out that many of the drugs currently in shortage are generics. The shortage has resulted in patients having to travel to multiple pharmacies to find drugs, waiting longer for treatment or being forced to use alternative medicines. If a generic drug cannot be found, patients may have to pay more for the original drug. In addition, shortages increase the risk of medication errors, as hospitals have to adjust drug dosages.

So where did this drug shortage crisis come from? In fact, the problem of drug supply in the United States has been getting worse in recent years. While some of the shortages of brand-name drugs such as Ozempic and Mounjaro have been caused by manufacturers failing to keep up with demand, most academics in the health and economics fields blame broken supply chains. That makes it difficult for generic drug makers to make profits and stay in business. Many generic drug makers have exited the market in the past few years or outsourced production to countries with lower labor costs.

It should be noted that in June 2023, the U.S. Senate introduced a new bipartisan bill: the Drug Supply Chain Risk Assessment Act, which aims to reduce foreign dependence on critical drugs.

Over the past few decades, the United States has become increasingly dependent on China for generic drugs and apis. Take penicillin, for example. In 2004, the last U.S. factory producing penicillin closed, and today the U.S. market is almost entirely dependent on Chinese imports of such drugs.

In addition to penicillin, the United States is almost entirely dependent on imports of many antibiotics used to treat common diseases such as ear infections, pneumonia and sexually transmitted diseases. This trend is not limited to common antibiotics, China also exports to the United States a variety of drugs for major diseases, such as AIDS, diabetes, Parkinson's disease, as well as chemotherapy drugs. It is worth mentioning that even in India, which occupies an important position in the global generic drug market, more than 70% of its apis come from China.

The reason why Chinese drugs can win the favor of the international market, on the one hand, thanks to its advanced production technology and strict quality control system, on the other hand, it is also inseparable from the continuous investment and support of the Chinese government for the pharmaceutical industry.

To combat the shortages, the White House has proposed spending between $3.26 billion and $5.11 billion over the next decade. The plan would tie part of Medicare payments to hospitals to the quality of drugs they buy, not just to the cheapest price. However, the proposal still needs to be approved and appropriated by Congress.

Policymakers also suggested giving the U.S. Food and Drug Administration (FDA) more authority so it can get more information about drug shortages and looming shortages.

Overall, the drug shortage problem in the United States is rooted in unstable supply chains, manufacturers pulling out, and a shrinking generic drug market. The U.S. Department of Health and Human Services recently made recommendations to address the problem, including reforming the drug industry's business model, raising generic drug prices to attract more companies to the market, strengthening supply chain stability, and improving the FDA's regulatory capacity.