Political promises won’t end drug shortages

At any given point this year, at least 300 prescription drugs in the U.S. have been in short supply.

From ADHD medication to chemotherapy treatments, patients’ well-being and longevity are put at risk by critically low supplies when patients are unable to get the drugs they need. 

If drug shortages have hit anyone harder than patients, it is hospitals. According to one survey, 33 percent of hospitals are “severely affected” by ongoing drug shortages, leading them to delay, ration, or skip treatments entirely.

Blaming disruptions in global supply chains, the Biden Administration is taking heavy-handed action to end widespread drug shortages. Under the authority of the Defense Production Act, President Biden is appointing a new Supply Chain Resilience and Shortage Coordinator and dedicating $35 million to producing vital drugs while granting officials at the Department of Health and Human Services the authority to invest it.

As a White House statement indicates, Biden hopes these actions will “make more essential medicines in America and mitigate drug shortages.” His intentions are noble, but there is little hope that he will succeed.

Almost all government-led efforts to improve healthcare have failed. Presidents from both political parties have vowed to lower prescription drug prices for at least twenty years. Yet drug prices continue to rise each year.

Public health officials are also conspicuously poor choosers of effective drug producers. For example, they questioned and withheld remdesivir from U.S. patients with severe COVID-19 infections, even though remdesivir became “the standard of care for treatment” after many other countries used it to save lives.

If they mismanaged one vital drug this badly, why would they be more successful managing hundreds?

Their track record of investing in public health programs and infrastructure is also highly questionable. The federal government spends billions subsidizing U.S. infant formula producers yearly, yet this did not prevent a nationwide formula shortage for much of 2022.

In 2020, the U.S. Army Corp of Engineers received $660 million to build field hospitals for overwhelmed emergency rooms. But almost no field hospitals treated patients because, as an NPR article cites, “there wasn’t enough planning to make sure these field hospitals could be put to use once they were finished.”

Federal efforts to clean up the drug supply chain are unlikely to help because they are misdiagnosing the problem. The “drug shortage crisis” in the U.S. dates back to at least 2011, well before the COVID-19 pandemic revealed global drug supply chain weaknesses. Shortages begin when there is excess demand and too little supply. The clear culprit preventing drug supply from increasing in the U.S. is regulation. Approving new drugs often takes a decade longer in the U.S. than in Europe. Even after the drugs are approved, regulations and trade restrictions delay or prevent many drugs from reaching U.S. patients.

Global supply chains are complex and intertwined, especially for drugs. But limiting suppliers from participating in them through excessive regulation is a surefire way to make supply chains more brittle and unreliable.

Fortunately, slashing regulations to allow for more drugs and other medical imports is a proven treatment for shortages.

By reducing manufacturing and transportation requirements of Chinese medical goods, the U.S. helped alleviate its face mask shortage early in the COVID-19 pandemic. Several Southeast Asian countries similarly ended their COVID-19 testing shortage by reducing import restrictions for South Korea’s COVID-19.

Importing goods to curb shortages works for life-saving drugs, too. In 2018, the United Kingdom faced an extreme national shortage of EpiPens. This was solved by importing other emergency allergy injectors from the U.S. and European nations. Supplies thus replenished within eight months. 

Drug shortages are a serious and sometimes deadly threat. While disruptions in the supply chain exacerbate this problem, they merely indicate a more systemic issue: the stringent regulatory environment that hinders the supply of essential medications in the U.S.

Historically, one effective way to deal with drug shortages has been to relax import policies. We can better address these shortages by allowing a wider range of international pharmaceutical suppliers. This approach has proven its worth in the past; it’s time we again placed our trust in it.

Raymond J. March is a research fellow and director of FDAReview.org at the Independent Institute, an assistant professor of economics at North Dakota State University, and a faculty fellow at the Sheila and Robert Challey Institute for Global Innovation and Growth.