Pharma companies accused of taking advantage of drug shortages

By John von Radowitz, Press Association Science Correspondent

Drug companies took advantage of a shortage of medicines to boost  their prices, a study suggests.

Between 2015 and 2016, when demand for drugs outstripped supply, the cost of medicines soared by up to 27%, the research showed.

Overall drug prices during the shortage rose more than twice as fast as would have been expected if there had been no supply problems, the authors said.

The US researchers led by Dr Immaculada Hernandez, from the University of Pittsburgh, wrote in the journal Annals of Internal Medicine: “We could not assess reasons for these increases; however they may reflect manufacturers’ opportunistic behaviour during shortages, when the imbalance between supply and demand increases willingness to pay.”

The scientists identified a shortage of 917 drugs listed on a US Food and Drug Administration (FDA) database.

A pharmacy sign (Danny Lawson/PA)

For 90 of these, the researchers compared monthly wholesale acquisition costs (WACs) in the 11 months before and after the supply shortage began.

The steepest price rises were for drugs made by fewest manufacturers, the research showed.

After the start of the shortage, prices for all drugs increased by 16% compared with 7.3% in the 11 months before the shortage.

But the prices of drugs supplied by three or fewer manufacturers rose by 12.1% and 27.4% respectively over the two time periods.

The authors wrote: “Prescription drug shortages are a public health crisis that requires attention from policymakers, who should be particularly concerned about the prices charged by remaining suppliers.

“If manufacturers are observed using shortages to increase prices, public payers could set payment caps for drugs under shortage and limit price increases to those predicted in the absence of a shortage.”