Drug Shortages are Killing People

> Maybe if we had an organization equally responsible for both numbers we'd see better outcomes.

It's not a "somehow" -- you answered your own question! Add this to the long list of reasons why we should switch to single payer.

Or we could simply subsidize the modest overproduction of such critical, low-profit generics, selling or donating any surplus [1] not unlike what we do with food staples. This would encourage additional production, making any drops, for whatever reasons (regulatory, accidental, business-related) less of a systemic threat.

In a world of imperfect solutions, I'll take that over additional regulatory bureaucracy or central planning.

[1] I realize this isn't ideal and 'dumping' the surplus may well do more long-term harm in any communities we might help, short term, via donation. But that can be studied and determined. And, frankly, a robust public health system is important enough that even if we have to incinerate the surplus, subsidized overproduction may well be worth doing.

http://www.policymed.com/2013/02/the-european-medicines-agen...

This has nothing to do with the reimbursement system at all. Drug shortages are on the manufacturing side.

We're playing with bigger numbers here. E.g. estimates were that Vioxx resulted in 90-140k additional cases of heart disease. The $5 billion paid in settlement of claims is a fraction of the actual damages, as settlements necessarily are.

Thus, when there is a "shortage", a manufacturer can't simply increase the production run. Nor can others step in and also start producing in the near term.

So people die.

All shortages are, by definition, caused by the government.

The crucial difference is that Europe has primarily single-payer systems. They simply don't need a black market for legitimate drugs: even if you're poor, you can get them from the doctor.

To be fair, the government won't pay for any drug -- it decides how much it is willing to pay based on efficacy, and some drugs get priced out (arguably because they deserve to get priced out).

The FDA began to ramp up GMP rules and regulations under the new commissioner in 2010 and 2011 (see figure at left (N.B. this includes all warning letters not just GMP so it is just illustrative, AT added). In fact, the report indicates that FDA threats shut down some 30% of the manufacturing capacity at the big producers of generic injectables. The safety of these lines was not a large problem and could have been handled with a targeted approach but instead the FDA launched a sweep against all the major manufacturers at the same time. These problem have been exacerbated by a change in Medicare reimbursement rules and by the rise of GPOs (buying groups) which reduced the prices of generics. Thus, in response to the cut in capacity, firms have shifted production from less profitable generics to more profitable branded drugs, so we get shortages of generics rather than of branded drugs. - See more at: http://marginalrevolution.com/marginalrevolution/2012/06/dru...