The Impact of Shortages on Medication Prices: Implications for Shortage Prevention

Abstract

Background: Medication shortages are frequent and have clinical and financial ramifications; however, their effect on drug prices remains unknown.

Objective: To examine price progression of medications affected by a shortage.

Methods: We collected prices of medications covered under Medicare Part B, reflective of general market prices, and data on clinically relevant shortages for the period 2005-16. We used linear mixed-effects models to examine the price growth of affected medications.

Results: Shortage medications demonstrated a quarterly price growth of -0.5 % (95 % confidence interval [CI] -1.6, 0.6) in the period preceding a shortage, 4.3 % (95 % CI 3.6, 4.5) during a shortage, and 4.1 % (95 % CI 2.6, 5.5) in the post-shortage period. Medications not affected by a shortage had a quarterly price growth of 0.2 % (95 % CI -0.3, 0.6).

Conclusions: Medication shortages are associated with price increases, and these increases are likely reactive to the low profitability of the affected medications and thus, proactive collaboration between the US Food and Drug Administration and industry can serve to identify low-profit drugs and evaluate measures to ensure continued production.