How to ‘break the logjam’? Economists pitch a plan to curb dire drug shortages

By Ed Silverman July 12, 2023

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There are alarmingly frequent reports of shortages of vitally needed medicines. From tablets to treat ADHD and severe pain to injectable treatments for syphilis and various cancers, the U.S. has been facing a number of serious shortages recently. And this was before a U.S. Senate report found the number of active shortages reached a peak at 295 at the end of 2022. The reasons can vary, from quality control failures at manufacturing plants to surging demand, including significant interest that has at times squelched availability of drugs taken for weight loss.

But the problem is not easily fixed. Most active pharmaceutical ingredients are made in China, and boosting production in the U.S. is not like flipping a switch. Many of the drugs in short supply are generics made in India, where regulators often find serious production lapses. So what to do? Along with a colleague, Marta Wosińska, a senior fellow in economic studies at The Brookings Institution, has three ideas to alleviate shortages of generic sterile injectable medicines, in particular. They suggest the U.S. government should provide incentives to upgrade facilities and create a buffer inventory. But they also argue hospital purchasing is in need of an overhaul. We discussed the possibilities; our conversation has been lightly edited.

I’ve been writing about drug shortages on and off for many years, but the problem never goes away. And now, it seems even worse. Obviously, something has to change. But what exactly has been lacking with our policies to date?

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