Prescription Drug Shortages and Formulary Shenanigans

http://consumerist.com/2012/02/fda-green-lights-imports-of-cancer-drugs-to-ease-shortages.html

This week the FDA decided to allow some cancer drugs to be imported because there's a long-term shortage of them here in the US. 

Why do we have a shortage here in the US but other countries don't?  The short version is that we have very picky manufacturing standards (this is good), it takes a long time for a "deficient" manufacturing facility to get back up to snuff (and lots of money too), and it costs a lot for generic drug makers to bring a new product to market.  Because for some reason we let the market decide the price of drugs, generics that save lives but are inexpensive to make end up in short supply (Lasix in the IV form, for example, or morphine single dose vials, or a calcium supplement to be injected) becuase it would be so costly to comply with regulations and when selling something for relatively little, it doesn't make sense to put so much money into supplying it.

Then there are the manufacturer delay shortages that mysteriously happen shortly after a newer version of a drug comes out.  Ritalin and  Adderall for example have a new competitor in the ADHD treatment market called Vyvanse that costs 2-3 times what a generic Ritalin costs (which is about $130 a month if paying cash).  Vyvanse is certainly not in short supply at all, and I have noticed that some area doctors are switching patients over so the drug shortage is less of a hassle.

The final kind of shortage is the change in formulary/market shift shortage.  This is shown very well by a new blood pressure medication that combines the blood pressure med with a diuretic (so 2 things lowering blood pressure, one capsule to take instead of two).  It was approved for sale by the FDA in December or so, just after a study in a journal that apparently all the cardiac doctors read was published saying it was more effective than the older combo products.  Very suddenly a whole lot of people who had been taking one product got switched to the combination product, so there was a shortage because the company that makes it hadn't planned for such a boom in demand.  Conversely, the maker of the older drug of choice may have trouble making ends meet when their market share dries up over night.  Sometimes drug companies make the case that they charge more for their blockbuster drug(s) so the income can support less profitable drugs or R&D for new drugs that might make life infinitely better for some patients.  It's not really clear if this is true, but maybe it is. Drug companies like to keep their financing something of a mystery on purpose.

Solutions to this problem:
1. National health plan or state plans that cover everyone so there's no insurance market pressure for drug companies to cut deals with insurance plans so some drugs are covered while others aren't.

2. National unified pricing of drugs based on value to patients when drug becomes a generic, rather than generic makers underbidding each other until the price they offer is lower than the costs of making the drug and the last generic maker in the market quits making it or limits supply sharply to try to raise the price.

3. More frequent review of large national formularies to ensure the most effective medications are the ones patients are getting (VA, looking at you here) and better formulary design so many drugs in the same class are allowed if the problem untreated costs more than the drug to treat it. Example: there are about 20 different medications called ACE inhibitors that are used to lower blood pressure.  Not everyone responds well to the one that's most effective for the population as a whole, so it's important to be able to try a different one after the most effective or cheapest is tried and fails because the cost to insurers of untreated high blood pressure are so much more than the cost of the drugs.  Same goes for statin drugs that lower cholesterol.  They are expensive, so many insurance plans will only pay for one specific drug, but if the insurers considered how much treating complications of high cholesterol are, perhaps they'd allow more choices for those who tried one first and it didn't work out.