How a Cabal Keeps Generics Scarce
By MARGARET CLAPP, MICHAEL A. RIE and PHILLIP L. ZWEIG, NYT
ABOUT a year ago, President Obama signed a law that was supposed to end chronic shortages of lifesaving drugs. But the critical lack of generic drugs continues unabated. It is a preventable crisis that is inflicting suffering on patients and, in some cases, causing needless deaths.
According to the American Society of Health-System Pharmacists, a group that maintains a closely watched drug-shortage database, 302 drugs were in short supply as of July 31, up from 211 about a year earlier.
The new law, which among other things requires manufacturers to report anticipated shortages, is ineffective because it addresses symptoms, not the underlying economic cause. Policy makers apparently failed to ask the important question: How could this happen in a free-market economy? That would have steered them to the giant purchasing organizations that control the procurement of up to $300 billion in drugs, devices and supplies annually for some 5,000 health care facilities. These cartels have undermined the laws of supply and demand.
Most of the drugs in short supply are sterile injectables that have been cheap mainstays for decades. They’re generally administered in hospitals and outpatient clinics and sold through hospital purchasing organization contracts, not through retail pharmacies or pharmacy benefit managers.
(More here.)
ABOUT a year ago, President Obama signed a law that was supposed to end chronic shortages of lifesaving drugs. But the critical lack of generic drugs continues unabated. It is a preventable crisis that is inflicting suffering on patients and, in some cases, causing needless deaths.
According to the American Society of Health-System Pharmacists, a group that maintains a closely watched drug-shortage database, 302 drugs were in short supply as of July 31, up from 211 about a year earlier.
The new law, which among other things requires manufacturers to report anticipated shortages, is ineffective because it addresses symptoms, not the underlying economic cause. Policy makers apparently failed to ask the important question: How could this happen in a free-market economy? That would have steered them to the giant purchasing organizations that control the procurement of up to $300 billion in drugs, devices and supplies annually for some 5,000 health care facilities. These cartels have undermined the laws of supply and demand.
Most of the drugs in short supply are sterile injectables that have been cheap mainstays for decades. They’re generally administered in hospitals and outpatient clinics and sold through hospital purchasing organization contracts, not through retail pharmacies or pharmacy benefit managers.
(More here.)
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