Hospital Drug Shortage Deadly and Costly

TRENTON, N.J. (AP) -- A severe shortage of drugs for chemotherapy, infections and other serious ailments is endangering patients and forcing hospitals to buy life-saving medications from secondary suppliers at huge markups because they can't get them any other way.

Not so much Obamacare, but the unintended consequence of drop in price when a drug goes generic, and cannot be produced at a reasonable profit margin to induce companies to make the drug. Many foreign companies who try to market the generic form have no quality control, and often the drug is contaminated, ineffective or both. The short supply drives up the price to hospitals, but the low government reimbursement does not change, and the hospitals wind up eating the difference. They then try to compensate by gouging patients on other more profitable procedures.

Over the past two years shortages have developed for over 180 drugs, including cancer treatments. The shortfall is the result of stricter FDA regulation, government price controls on already discounted but complex drugs, and policies that discourage the use of new medications. Companies, facing lower prices, tighter regulation and increasing government control over what drugs will be used and when, are exiting the U.S. market and investing in product development in China and India where, sadly, it is easier and cheaper to produce next-generation medicines.

Stockpiling will only add to people’s suffering by replacing market reforms with government micromanagement. Government planners require months, if not years, to produce regulations, bids and supply estimates that are usually overgenerous to compensate for paltry prices. Government bungling was behind the failure of the smallpox and H1N1 vaccine program and responsible for billions of dollars in flu vaccines and antibiotics being dumped. The same forces pushing stockpiling also believe commercializing medical discoveries is evil. It’s part of a larger effort to nationalize the development of medicines that under Obamacare is become institutionalized.

Indeed, the drug shortage is a product of a more troubling trend. At a time when medical research could yield breakthroughs in the treatment of obesity, Alzheimer’s, diabetes, and stroke, among others, innovation has all but dried up. Most of the medicines being used today were developed 30 years ago. Most of them have generic competition. They have contributed greatly to increased wellbeing but as the return on generic drugs fall, price controls and regulation have created shortages.

Obamacare is making the commercialization of newer drugs and devices more difficult.

http://spectator.org/archives/2011/08/24/preventive-care/print

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