Study finds generic drug prices were “strongly predictive of drug shortages”

By PharmaCompass

2018-12-06

Impressions: 141 Article

A study published in Value in Health journal has found that generic drug prices were "strongly predictive of drug shortages”.

However, competition and market size were not associated with the likelihood of a shortage, the authors from Harvard’s Program on Regulation, Therapeutics, And Law (PORTAL) and the University of Utah said in their study.

The study of commonly used outpatient generic drugs from 2008 to 2014 found that the prevalence of shortages decreased from a peak in 2011-2012 to less than 4 percent of the overall sample by the end of 2014.

“From 1.3 billion prescription claims, a cohort of 1114 generic drugs was identified. Low-priced generic drugs were at a higher risk for drug shortages compared with medium- and high-priced generic drugs,” the study said.

So why are higher-priced generics less likely to experience a shortage? According to Chintan Dave, one of the authors of the study: “First, manufacturers may prioritize the continued production of more profitable products (assuming profitability is directly correlated with drug price, which it should be for generic 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.”

More complicated formulations such as extended release capsules and solutions were also more likely to experience a shortage, Dave said, adding that this is “possibly due to a more complicated manufacturing process (requiring more complex supply chains).”

Recently, the FDA had said that there has been an increase in drug shortages. Combining data from FDA archives and the IQVIA national sales database, one FDA researcher found ongoing shortages have become more prevalent over the last year or so.

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“ The article is based on the information available in public and which the author believes to be true. The author is not disseminating any information, which the author believes or knows, is confidential or in conflict with the privacy of any person. The views expressed or information supplied through this article is mere opinion and observation of the author. The author does not intend to defame, insult or, cause loss or damage to anyone, in any manner, through this article.”

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