Drug shortages may add $230 million to annual U.S. drug costs

A new study suggests that prescription drug shortages may drive up prices twice as much as they would rise with medicines in abundant supply, adding $230 million a year to U.S. drug costs.
Researchers examined data on 90 medications involved in shortages between December 2015 and December 2016.

A new study suggests that prescription drug shortages may drive up prices twice as much as they would rise with medicines in abundant supply, adding $230 million a year to U.S. drug costs.
Researchers examined data on 90 medications involved in shortages between December 2015 and December 2016. They compared average wholesale drug prices for 11 months before and after shortages began, and they also looked at a decade of historical price increases. Over the 11 months preceding shortages, researchers found that prices for the drugs rose an average of 7.3%. In the 11 months afterward, prices rose 16% on average. "Patients exposed to out-of-pocket costs should be aware that medications may become more expensive when there is a shortage," said lead study author Inmaculada Hernandez of the University of Pittsburgh School of Pharmacy. Researchers could not assess the reasons behind the price increases, but they did find a difference based on how many manufacturers made drugs in short supply. When drugs were made by three or fewer companies, prices rose by an average of 12.1% over the 11 months preceding a shortage and by an average of 24.7% over the 11 months afterward, the analysis found. When at least four manufacturers sold the same drug, prices rose by an average of 2.5% over the 11 months preceding a shortage and by an average of 4.8% afterward.