Sunday, May 19, 2024
Hawai'i Free Press

Current Articles | Archives

Monday, January 9, 2012
Vast Web of Federal Regulation Causing Drug Shortages
By NCPA @ 12:36 PM :: 3622 Views :: National News, Ethics


The number of prescription drug shortages reached record levels in 2011, far surpassing the same figure for even recent years. These shortages have been costly and have disrupted chemotherapy, surgery and care for patients in various states of health. Not surprisingly, government price and output controls are largely to blame for shortages, as they cause distortions within the market and adverse motives among market participants, says Investor's Business Daily.

  • There were 267 prescription drug shortages in 2011 -- the highest this figure has ever been.
  • This number is up from 211 in 2010.
  • As recently as 2004, just 58 drugs were in short supply.
  • Since 2010, at least 15 people have died as a direct result of these drug shortages.

Medicare practices and protocol serve as an excellent example of how government regulation distorts the market for prescription drugs. Because Medicare's Plan B reimbursements to drug makers often don't cover the cost of a drug, or shrink profits to such low levels it's no longer worth making it, they often price drugs out of the market completely.

However, because hospitals still need those drugs, they are forced to use non-market means in order to obtain them.

  • A recent survey found more than half of hospitals routinely buy scarce drugs on the black market, which often demands exorbitant prices.
  • Additionally, many hospitals respond to government-sponsored uncertainty in the market by stockpiling what drugs they can obtain.
  • This causes further shortages and further drives up prices.

Regulation in the drug market also harms innovators and drug creators by contributing to uncertainty and increasing risks associated with drug development. It costs nearly $1 billion and takes 12 years to bring a new drug to market, according to Pharma, the drug makers' industry group. Because of the large investment of both funds and time, in addition to compliance costs with onerous U.S. Food and Drug Administration standards, innovation in the prescription drug market has been suppressed irreparably.

Moreover, according to John Goodman, president and CEO of the National Center for Policy Analysis, "[A] drug manufacturer must get approval for how much of a drug it plans to produce, as well as the time frame. If a shortage develops (because, say, the FDA shuts down a competitor's plant), a drug manufacturer cannot increase its output of that drug without another round of approvals."

Source: "Vast Web of Federal Regulation Causing Drug Shortages," Investor's Business Daily, January 4, 2012.


TEXT "follow HawaiiFreePress" to 40404

Register to Vote


Aloha Pregnancy Care Center


Antonio Gramsci Reading List

A Place for Women in Waipio

Ballotpedia Hawaii

Broken Trust

Build More Hawaiian Homes Working Group

Christian Homeschoolers of Hawaii

Cliff Slater's Second Opinion

DVids Hawaii


Fix Oahu!

Frontline: The Fixers

Genetic Literacy Project

Grassroot Institute

Hawaii Aquarium Fish Report

Hawaii Aviation Preservation Society

Hawaii Catholic TV

Hawaii Christian Coalition

Hawaii Cigar Association

Hawaii ConCon Info

Hawaii Debt Clock

Hawaii Defense Foundation

Hawaii Family Forum

Hawaii Farmers and Ranchers United

Hawaii Farmer's Daughter

Hawaii Federation of Republican Women

Hawaii History Blog

Hawaii Jihadi Trial

Hawaii Legal News

Hawaii Legal Short-Term Rental Alliance

Hawaii Matters

Hawaii Military History

Hawaii's Partnership for Appropriate & Compassionate Care

Hawaii Public Charter School Network

Hawaii Rifle Association

Hawaii Shippers Council

Hawaii Together


Hiram Fong Papers

Homeschool Legal Defense Hawaii

Honolulu Navy League

Honolulu Traffic

House Minority Blog

Imua TMT

Inouye-Kwock, NYT 1992

Inside the Nature Conservancy

Inverse Condemnation

July 4 in Hawaii

Land and Power in Hawaii

Lessons in Firearm Education

Lingle Years

Managed Care Matters -- Hawaii

Missile Defense Advocacy

MIS Veterans Hawaii

NAMI Hawaii

National Parents Org Hawaii

NFIB Hawaii News

NRA-ILA Hawaii


OHA Lies

Opt Out Today

Patients Rights Council Hawaii

Practical Policy Institute of Hawaii

Pritchett Cartoons

Pro-GMO Hawaii

Rental by Owner Awareness Assn

Research Institute for Hawaii USA

Rick Hamada Show

RJ Rummel

School Choice in Hawaii

Talking Tax

Tax Foundation of Hawaii

The Real Hanabusa

Time Out Honolulu

Trustee Akina KWO Columns

West Maui Taxpayers Association

What Natalie Thinks

Whole Life Hawaii