5 factors driving drug shortages

The Pew Agency for Charitable Trusts and the International Society for Pharmaceutical Engineers released a report exploring the relationship between manufacturing, supply chain and market forces — and how these contribute to drug shortages.

For the report, researchers assessed survey responses from 10 drug companies regarding drug shortages.

Here are five factors drugmakers cited as contributing to drug shortages.

1. Market withdrawals. Drug companies said market withdrawals, which reduce the amount of manufacturers supplying a drug, play a role in shortages. They listed a number of reasons manufacturers exit a market, including quality issues, introduction of placement drugs on the market and company decisions to realign a portfolio or focus on other products.

2. Supply chain design. The drugmakers highlighted a need to improve their supply chains, saying they need to better plan for — and meet — the estimated demand of a product, according to the report.

3. Limited market insights into future demands. Companies expressed reluctance to invest in additional manufacturing capabilities to prevent future shortages without accurate information about the expected demand of a product.

4. Purchaser–manufacturer incentives. Survey respondents said they'd be motivated to make investments into preventing shortages if they had incentives like guaranteed-volume contracts or the ability to retain contracts to mitigate investment risk, according to the report.

5. Managing regulatory expectations. The drug companies identified regulatory challenges as another contribution to shortages, as it takes both time and money to earn approval to expand manufacturing capacity or upgrade equipment.

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6 quotes from Pfizer CEO on Trump, drug prices and more

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