Drug Shortage and the State

In the US right now the people and patients are suffering form a shortage of prescription medication. According to the University of Utah 232 medicines are running short. (Previously it was only 70 in 2006.) Most of these drugs are “injectable medicines, such as generic chemotherapy drugs”. According to media sources many patients have had to delay certain treatments and surgeries because of it. President Barack Obama is currently trying to push legislation through Congress right now to relieve the situation, but it’s bogged down in partisan politics with an election coming.

The major cause of the shortage is the domination of the generic drug market by 3 providers. Currently they comprise 71% of the market by volume. Despite there being three large companies, when one falls short in production and is not able to produce enough, the other two do not step in to fill the gap. Why would they? The shortage of drugs allows them to raise the price.

Given the astronomical expense of running a pharmaceutical company its unlikely another new private provider will appear. Honestly I would make the pharmaceutical industry state owned so that we can have better safety testing, the private companies have done a lot to interfere with FDA regulation.

Unfortunately as a result of this shortage a “grey market” has appeared. Distributors are withholding supplies to raise the price via market forces and selling them to preferred customers. In a shortage of medication the profit motive is exacerbating the situation. Thus we can pretty much rule out the market as a means of solving the problem. Even worse, most of the work Obama is doing to try do to alleviate the situation is only attacking the symptoms not the problem.

He’s asked the Justice Department to look into incidents of this happening but they won’t yield any convictions or help the matter at all. This work is being focused on the the grey market, the symptom, and not the supply which is the problem. The other measure he is seeking is to take people from the FDA to make special “surge teams”. Essentially the role of these teams will be to speed review of drugs and factories. Really its just cutting even shorter the time necessary to properly study a medicine and determine how safe it is.

In my opinion the only viable solution is to nationalize the pharmaceutical industry in the same manner as is done in most European countries and Canada. The market is doing nothing to alleviate the shortage and is in fact making it worse. The profit motive is harming the research and development with all the number fixing in tests, as well as its interference with the FDA diminishing the ability of the state to properly test drugs. Its time to just take people’s lives out of the hands of the rich and place it in own own.

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