Assessment of Proposals to Address Drug Shortages

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Drug shortages have consequences for a broad range of stakeholders, and policy proposals vary in their ability to address negative impacts.

Over the past two decades, prescription drug shortages have been a persistent issue in the United States for a broad range of products, including chemotherapies, antibiotics, and anesthetics. Shortages impact all levels of the prescription drug supply chain, with negative consequences for a broad range of stakeholders including patients, providers and healthcare facilities, manufacturers, distributors, hospital group purchasing organizations, and payers.

In recent years, policymakers and other stakeholders have proposed various policy options to address a range of upstream and downstream factors that contribute to drug shortages. Avalere highlighted six categories that these policy proposals fall under:

  1. Incentives for infrastructure investment
  2. Supply chain visibility and federally managed risk and vulnerability assessments
  3. Increased Food and Drug Administration regulatory flexibility on compounding and product shelf life
  4. Rating systems to incentivize quality management maturity and ensure adequate supply
  5. Reimbursement reforms
  6. Drug inventory buffer and stockpiling


In this paper, Avalere describes the role of key supply chain stakeholders, provides an overview of proposed policy solutions, and assesses each of the policy solutions to determine whether they address negative impacts of drug shortages on key stakeholders. Given the complexity of factors driving drug shortages, any viable solution will likely require upstream solutions focused on prevention (e.g., investing in manufacturing, addressing the economics of generics production and payment) and downstream solutions focused on mitigation (e.g., buffer stocks, regulatory flexibility).

Access the white paper here.

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