NCPA - National Center for Policy Analysis

The Case Of The Curious Drug Shortage

January 3, 2001

Hospitals around the country are experiencing shortages of a variety of prescription drugs and the reasons are elusive. "Something strange is going on," warns Dr. David B. Acker of Brigham and Women's Hospital in Boston.

Where a few years ago a hospital might experience a shortage of one or two critical drugs a year, the number in the last year has been closer to two dozen at some hospitals.

Here are some possible explanations:

  • When federal regulators found problems at some factories making drugs, they shut down production until procedures were improved.
  • Some large drug companies have stopped making older drugs and instead reserved production capacity for newer drugs.
  • Some drug makers, distributors and hospitals are keeping lower levels of drugs on hand to save on storage costs and not tie up capital on drugs sitting on shelves.
  • Finally, the problem may simply stem from increased demand -- a temporary problem which should prompt drug manufacturers to race ahead with production.

Source: Melody Petersen, "Drug Shortages Become a Worry at Hospitals Around the Country," New York Times, January 3, 2001.


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