Health Care & Drug Shortages in the USA

posted by Nima

September 25, 2011 · Posted in Health 

I’m seeing more and more reports about drug shortages/unavailability in the US, for example Hospital drug shortages deadly, costly (emphasis mine):

A drug for dangerously high blood pressure, normally priced at $25.90 per dose, offered to hospitals for $1,200. Fifteen deaths in 15 months blamed on shortages of life-saving medications.

A growing crisis in the availability of drugs for chemotherapy, infections and other serious ailments is endangering patients and forcing hospitals to buy from secondary suppliers at huge markups because they can’t get the medications any other way.

An Associated Press review of industry reports and interviews with nearly two dozen experts found the shortages — mainly of injected generic drugs that ordinarily are cheap — have delayed surgeries and cancer treatments, left patients in unnecessary pain and caused hospitals to give less effective treatments. That’s resulted in complications and longer hospital stays.

Just over half of the 549 U.S. hospitals responding to a survey this summer by the Institute for Safe Medication Practices, a patient safety group, said they had purchased one or more prescription drugs from so-called “gray market vendors” — companies other than their normal wholesalers.

Most also said they’ve had to do so more often of late, and 7 percent reported side effects or other problems with those drugs.

Hospital pharmacists “are really looking at this as a crisis. They are scrambling to find drugs,” said Joseph Hill of the American Society of Health-System Pharmacists.

At a hearing Friday before the health subcommittee of the House Energy and Commerce Committee, hospital officials and other experts testified that the worsening shortages are preventing them from giving many patients the best care and are driving up costs.

“Considering the nation’s budget crisis and our skyrocketing health care bill, these markups are nothing more than profiteering at the expense of patients and providers who are struggling to afford vital medicines,” said Mike Alkire, chief operating officer of Premier Healthcare Alliance, a group that helps U.S. hospitals and other health providers improve their patient care and finances.

The shortages could cost hospitals at least $415 million a year, he said, citing data from health care providers across the nation. So far, hospitals have been absorbing the extra costs, but they’ll soon have to start passing them on to insurers and patients, according to the American Hospital Association.

The scarcity of mainstay cancer drugs is not only hurting patients but is halting or disrupting clinical studies of potential new treatments, said Dr. Robert S. DiPaola, director of the Cancer Institute of New Jersey.

“The drug shortages of today can have a ripple effect on the availability of new drugs and treatment combinations tomorrow,” he told the committee.

On Monday, the Food and Drug Administration is holding a meeting with medical and consumer groups, researchers and industry representatives to discuss the shortages and strategies to fight them.

The FDA says the primary cause of the shortages is production shutdowns because of manufacturing problems, such as contamination and metal particles that get into medicine.

Other reasons include theft of prescription drugs from warehouses or during shipment, as well as the “gray market” vendors who buy scarce drugs from small regional wholesalers, pharmacies or other sources and then sell them to hospitals at many times the normal price. These sellers may not be licensed, authorized distributors.

In addition, many companies have stopped making generic injected drugs because the profit margins are slim. Producing them is far more expensive than stamping out pills, and it takes about three weeks to produce a batch. Making things worse, companies don’t have to notify customers or the FDA that they’ve stopped making a medicine. That means neither FDA nor competitors can fill the gap in time.

Only a half-dozen companies make the vast majority of injected generics. Even if other companies wanted to begin making a drug in short supply, they’re discouraged by the lengthy, expensive process of setting up new manufacturing lines and getting FDA approval.

The article goes on, but that last paragraph is really the most important point we need to wrap our brains around to understand this terrible tragedy: Drug shortages occur precisely because of the existence of the government’s meddling with the process of researching, manufacturing, selling, and purchasing drugs.

As I explained in Fixing US Health Care Once And For All – 5 Crucial Steps:

On the market, such imbalances are, under free competition, swiftly addressed via a simple process: High prices for certain consumer goods indicate a high demand and an insufficient supply. Thus profit seeking entrepreneurs have an incentive to shift from what they are currently doing to focusing on producing more of such highly demanded goods, by employing more commensurate factors of production that turn out the demanded goods. This leads to a decline in their prices, moving the market closer to equilibrium and thus restoring balance.

But when a group of people which obtains its means of operation via aggression and theft, the government,  imposes decrees that prevent the voluntary market participants to perform such balancing acts, and threaten them with imprisonment and fines should they not oblige, the imbalance will persist. If that group’s actions are such as to bring about even more shortages for the demanded goods, the imbalance will grow, prices will keep rising.

Of course Obamacare has not addressed a single one of the points I put forward in that article, quite the contrary, and so it should not surprise us that this horrific and quite frankly murderous trend continues to aggravate shortages of health care products and services, continues to drive sick people into bankruptcy, and continues to kill people by the thousands, if not millions.

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