Generic Drug Prices ‘Strongly Predictive’ of Shortages, Study Finds

Regulatory NewsRegulatory News | 04 December 2018 |  By 

How a generic drug is priced may be the difference between whether it experiences a shortage or not, a new study published in Value in Health found.

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% of the overall sample by the end of 2014.

Generic drug prices “were strongly predictive of drug shortages,” the researchers found. But 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 found. So why are higher-priced generics less likely to experience a shortage?

First author Chintan Dave told Focus: “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, noting that this is “possibly due to a more complicated manufacturing process (requiring more complex supply chains).”

As far as solutions, the study said that in the short term, the US Food and Drug Administration (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.”

Dave also added that in addition to allowing drug imports, the FDA could also consider weighing the probability of a drug shortage when considering regulatory action alongside the risk of patient harm.

“However, the FDA already does this, as was the case when it allowed the continued distribution of an injectable generic product containing glass fragments (advising healthcare professionals to filter them out before using),” he noted.

The study comes as FDA said late last month that there has been a recent 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, in terms of duration there are more persistent shortages now than was previously the case, in terms of intensity more than two-thirds of historical volumes have typically been unavailable for these drugs and the public health impact is also high.



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