Shortage of Generic Drugs—Why?

Jun 8, 2015

Medicinal drugs are in short supply in the U.S. And this drug shortage worsened over the years. In 2007, 154 drugs were in short supply or no longer available, according a list compiled by the Food and Drug Administration. Today there are more than 300 drugs on this list.

These drugs include antibiotics like Zosyn, pain killers like ketorolac, cancer treatment drugs, and even commodity items such as saline. All these drugs are vital for the survival of humans suffering from illnesses.

Generally, “generic” drugs are on this list. The generic drugs are drugs that are not under a monopoly by a single corporation through a patent. For this reason, in principle, more than one company can manufacture the same drug, which substantially decreases the prices. Thus, the generic drugs have lower profitability margins as compared to that of the brand name drugs.

For example, BCG is a generic drug used to treat bladder cancer. This drug is 25 years old and no longer monopolized through a patent. A vial of generic BCG is priced at 145 dollars. Such drugs cost less than 10 dollars per dose to manufacture, so the generic BCG is still very profitable–but not enough for the big pharmaceutical companies.

On the other hand, since a single company holds a monopoly over a “brand name” drug through a patent, it can charge sky high prices. For example, a vial of Avastin, a brand name drug similar to BCG, fetches about $2,700, because it has a patent. So, its manufacturer, Genentech/Roche, makes HUGE profits by selling this drug.

So, the generics don’t get made!

These drug shortages are harmful to people. The deaths of 15 patients in 2011 are linked with the shortages.

This is capitalism at its best. For the companies, mega profits take precedence over the health of human beings.