Why do hospitals keep running out of generic drugs?
Oct 25, 2024
auto_awesome
Marta Voschinska, a healthcare economist and senior fellow at the Brookings Institution, dives into the perplexing world of generic drug shortages plaguing hospitals. She explains how these essential, low-cost medications frequently go out of stock and uncovers the complexities behind their manufacturing and pricing. Voschinska discusses the paradox of cheap drugs leading to market exits, and advocates for prioritizing manufacturer reliability over cost, emphasizing the need for systemic changes to ensure better patient care.
The persistent shortages of generic drugs in hospitals are primarily driven by the unprofitability of manufacturing these essential medications.
Implementing financial incentives for hospitals to procure from reliable manufacturers may enhance the resilience of the healthcare supply chain.
Deep dives
The Impact of Drug Shortages on Healthcare
A significant and ongoing issue in healthcare involves the persistent shortages of affordable and commonly used drugs, particularly generic sterile injectables. These shortages affect not only hospital operations but also patient care, as they can lead to critical medications being unavailable during emergencies. For instance, nurses often resort to creative workarounds, such as using solid sugar alternatives when intravenous dextrose is unavailable, which may not provide the ideal medical response but are sometimes necessary. The reliance on these makeshift solutions highlights the critical nature of the problem, as the regularity of shortages creates a stressful environment for healthcare providers who must swiftly adapt to unpredictable circumstances.
Economic Drivers Behind Persistent Shortages
The root causes of these drug shortages are multifaceted, primarily centering around the economics of generic drug manufacturing. Despite the theory that increased prices should attract more manufacturers into the market, the reality is that generic sterile injectables are often seen as unprofitable compared to proprietary drugs. With only a limited number of manufacturers producing these cheap drugs, any disruption, such as a factory closure or regulatory issue, can severely affect supply. Furthermore, the financial pressures on both hospitals and manufacturers result in a reluctance to invest in quality assurance and redundancy measures, which could mitigate the impacts of these shortages.
Recommended Solutions and Future Outlook
To combat the ongoing problem of drug shortages, experts propose several strategies aimed at improving the resilience of the healthcare supply chain. One potential solution includes incentivizing hospitals to source drugs from reliable manufacturers by providing financial support from the government, which could facilitate higher prices for high-quality products. Additionally, fostering better information sharing about manufacturer reliability could help hospitals make more informed purchasing decisions. Ultimately, a shift in how both hospitals and manufacturers approach pricing and quality assurance is essential for fostering a more stable supply of necessary medications.
There's something strange going on in hospitals. Cheap, common drugs that nurses use every day seem to be constantly hit by shortages. These are often generic drugs that don't seem super complicated to make, things like dextrose and saline (aka sugar water and salt water).
So what's going on? The answer, as with anything in healthcare, is complicated.
On today's show: why hospitals keep running out of generic drugs. The story behind these shortages tells us a lot about how these drugs are made, bought and sold–and, it shows us how these markets can falter without the proper care.
This episode was hosted by Sally Helm and Alexi Horowitz-Ghazi. It was produced by Willa Rubin, with help from James Sneed and Sam Yellowhorse Kesler. It was edited by Martina Castro. Fact-checking by Dania Suleman. Planet Money's executive producer is Alex Goldmark.
