'Cartels' Are Fueling Generic Drug Shortage

We must ensure a free market: experts

By Matt Cantor,  Newser Staff

Posted Sep 3, 2013 4:27 PM CDT

(Newser) – The US generic drugs business is effectively skirting the free market, prompting dangerous shortages that can make the difference between life and death, a group of pharmaceutical experts and activists argue in the New York Times. The US is currently facing shortages of 302 drugs, and a new law last year addressed the "symptoms" of the problem, not its root: the giant organizations that control the market. In charge of the purchases of "up to $300 billion in drugs, devices, and supplies annually for some 5,000 health care facilities," the experts write, "these cartels have undermined the laws of supply and demand."

The groups are ensuring tiny operating margins for manufacturers as they offer "exclusive contracts in return for exorbitant (and undisclosed) 'administrative,' marketing, and other fees." That often leaves just "one or two" makers supplying generic drugs. A 1987 law protects the buying groups from being prosecuted over vendor kickbacks, and a powerful lobby is fighting reform. "The Obama administration and Congress must protect patients by repealing the anti-kickback safe harbor and restoring free-market competition to the hospital purchasing industry," the writers say. Click through for the full piece.

A shortage of generic drugs is creating a "preventable crisis."   (Shutterstock)
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