The last thing a sick person wants to hear is that ample supplies of a
life-saving medicine have been replaced by a surplus of red tape.
That’s precisely what’s happening nationwide, with 82 percent of
hospitals reporting shortages so severe that treatment must be put on
hold, according to the American Hospital Association.
Since 2010, 210 drugs, many of them critical components of cancer
treatment and anesthesia, have been at dangerously low stock levels.
On June 15, the House Oversight committee issued a report implicating the Food and Drug Administration (FDA) and a badly drafted law for the current state of affairs. Many of the hard-to-find drugs are now off-patent, produced as generics with very narrow profit margins. The Medicare Modernization Act changed the way manufacturers were reimbursed for older generic drugs, particularly when administered in a nonhospital setting. The price of three chemotherapy drugs, as the report details, fell 90 percent in the first year they went off-patent.
The price drops were steep enough that manufacturers began to give up. In a free market, the price for the drugs would rise until supply could meet demand. It didn’t happen here because the government plays such a major role in Medicare that the law effectively imposed price controls. Only a few big manufacturers who could exploit economies of scale and turn a modest profit on the low-margin generics continued making these medicines.
Read more: http://www.washingtontimes.com/news/2012/jun/22/a-regulatory-drug-shortage/
On June 15, the House Oversight committee issued a report implicating the Food and Drug Administration (FDA) and a badly drafted law for the current state of affairs. Many of the hard-to-find drugs are now off-patent, produced as generics with very narrow profit margins. The Medicare Modernization Act changed the way manufacturers were reimbursed for older generic drugs, particularly when administered in a nonhospital setting. The price of three chemotherapy drugs, as the report details, fell 90 percent in the first year they went off-patent.
The price drops were steep enough that manufacturers began to give up. In a free market, the price for the drugs would rise until supply could meet demand. It didn’t happen here because the government plays such a major role in Medicare that the law effectively imposed price controls. Only a few big manufacturers who could exploit economies of scale and turn a modest profit on the low-margin generics continued making these medicines.
Read more: http://www.washingtontimes.com/news/2012/jun/22/a-regulatory-drug-shortage/
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