Economic Analysis of the Causes of Drug Shortages. Endnotes


[1] The Drug Shortage Program (DSP) at the Food and Drug Administration, Center for Drug Evaluation and Research (CDER) defines a drug shortage as a situation in which the total supply of all clinically interchangeable versions of an FDA-regulated drug is inadequate to meet the current or projected demand at the user level.  In general, the DSP prioritizes its work on shortages of products that have a significant effect on public health.  For the purpose of this prioritization, DSP determines what drugs are “medically necessary,” which DSP considers to be drugs that are used to treat or prevent a serious disease or medical condition for which there is no other alternative drug, available in adequate supply that is judged by medical staff to be an adequate substitute.

[2] Kaakeh R, Sweet BV, Reilly C, Bush C, DeLoach S, Higgins B, Clark AM, Stevenson J. Impact of drug shortages on U.S. health systems.  American Journal of Health-System Pharmacy. 2011;68:e13-e21.


[4] FDA presentation at the FDA Drug Shortage workshop, 9/26/2011.

[5] There is some evidence suggesting that physicians and hospitals do change prescribing patterns with changes in their own reimbursement for prescription drugs.  Jacobson, Mireille; JP, CC Earle, M Price, JP Newhouse.  How Medicare’s Payment Cuts For Cancer Chemotherapy Drugs Changed Patterns of Treatment Health Affairs, 2010, 29(7): 1394-1402.

[6] Ben Venue memo, 9/22/2011.

[7] GPO Memo.

[8] From personal communication with representatives from Greater New York Health Association (GNYHA) 9/22/2011.

[9] FDA presentation at the FDA Drug Shortage workshop, 9/26/2011.

[10] From National Cancer Institute analysis of IMS data.

[11] We have identified fewer than a dozen mergers since 2005, largely relatively small in nature, contradicting the idea that there has been a lot of recent consolidation. As merger and acquisition activity does not appear to have grown in the last 5 years, it does not appear to be a factor in the recent surge of sterile injectable drug shortages.

[12] From personal communications with representatives from Teva, Hospira, Ben Venue, and APP 9/22/2011.

[13] From personal communications with representatives from Teva, 9/22/2011.

[14] Eaches (e.g., vials) and Medicare Part B services do not necessarily represent the same quantity of a drug.

[15] This follows the trend in the larger sterile injectable drug market as described in the accompanying FDA report which showed an increase in total sales revenue for generic injectable products between 2001 and 2010.

[16] From personal communications with representatives Teva, Hospira, Ben Venue, APP 9/22/2011)).

[17] From personal communications with representatives Ben Venue, 9/22/2011.

[18] Donald Gross, John F. Shortle, James M. Thompson, Carl M. Harris, Fundamentals of Queuing Theory, Fourth Edition (John Wiley & Sons, Inc, Hoboken, NJ., 2008).

[19] FDA presentation at the FDA Drug Shortage workshop, 9/26/2011

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