Generic drug prices 'strongly predictive' of shortages, study finds

A new study published in Value in Health suggests that the price of a generic drug is a key factor in whether it undergoes a shortage. Generic drug prices "were strongly predictive of drug shortages," the researchers found after examining commonly used outpatient generic drugs from 2008 to 2014.

A new study published in Value in Health suggests that the price of a generic drug is a key factor in whether it undergoes a shortage. Generic drug prices "were strongly predictive of drug shortages," the researchers found after examining commonly used outpatient generic drugs from 2008 to 2014. They also found that the prevalence of shortages decreased from a peak in 2011–12 to less than 4% of the overall sample by the end of 2014. Competition and market size were not linked to the probability of a shortage, the authors from Harvard's Program on Regulation, Therapeutics, And Law and the University of Utah found. First author Chintan Dave believes pharmaceutical companies may be prioritizing "the continued production of more profitable products. Another hypothesis is that smaller profit margins may force manufacturers to cut corners in ways that compromise production quality, predisposing these products to further regulatory scrutiny and subsequent product disruptions." Complex formulations such as extended release capsules and solutions were also more likely to experience a shortage, according to Dave. He says FDA "should recognize that very low generic drug prices might be a factor in subsequent shortages and continue to consider the risk of shortages when taking steps to promote the safety and quality of the generic drug marketplace."