While most people express concern over high drug costs, raising the price on generic injectable drugs could help prevent dangerous shortages, according to a column by health economist Austin Frakt in The New York Times.
Generic injectibles are often used in life-threatening emergency situations and include anticancer agents, heart attack medications and anesthetics. When these drugs are in short supply, they result in dangerous delays in care as hospitals look for alternative treatments.
Low profit margins and high production costs make generic injectables especially prone to shortages. Injectables are directly injected into the blood, eye or spine, which means they have to be created in a sterile environment. This requirement makes them more expensive to produce than generic oral drugs. In most cases, no manufacturer retains exclusive rights to produce generic injectables, which causes the low profit margin.
Mr. Frakt believes that if prices and profit margins increased enough to justify upfront investment of drug production, other manufacturers would enter the market. This competition would then push prices and profit margins back down again.
In 2012, the FDA gained new tools and responsibilities to fight drug shortages. Since then, the number of new shortages has decreased and older ones have been resolved.
Yet despite this progress, there have been nearly 200 new shortages in the past year, leaving Mr. Frakt to wonder whether raising the price on generic injectables is an idea worth considering.
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