Drug Shortages on Upswing

Pages: 1 2

And then there is the factor that managed to elude Democrats even as they produced 2700 pages of ObamaCare: tort reform was completely omitted from the bill. While litigation is a necessary evil with respect to protecting consumers from bad drugs, much like patent expirations and the elimination of R&D departments, it is a double-edged sword. For example, one of the primary drugs used for anesthesia is propofol. At one point, it was made by three companies. On May 11, one of those companies, Teva, was held liable for $365 million in damages when a Las Vegas clinic infected a patient with Hepatitis C from a re-used vial of propofol in 2008. The company had nothing to do with the clinic’s unsafe practices, but apparently that was irrelevant to the jury.

As a result, Teva no longer manufactures propofol. Now there is a shortage of the drug, forcing doctors to seek alternative sources for medication. This leads directly to another problem: chronic shortages of key medicines increase the risk of drug errors as hospital pharmacies often turn to outside pharmacies, drug distributors, or a “gray market” of small distributors to get replacement medications. A survey of 1800 healthcare providers conducted last fall by Institute for Safe Medication Practices revealed at least 1,000 medication errors related to drug shortages. Furthermore, many of these gray market drug suppliers are are taking advantage of the shortages and driving prices through the roof.

Nyack Hospital Pharmacy Director Joseph Pinto is concerned that the shortage is so acute that hospital pharmacists might have to go back to making their own drugs from raw ingredients. “It isn’t always the best practice. We are not always equipped,” he said. “It’s cumbersome, and it’s manpower hours,” he added. Thomas Magaldi, pharmacy administrator at Sound Shore Medical Center in New Rochelle, noted that numerous recalls, which occur when a drug is defective or potentially harmful, have also disrupted the availability of dozens of drugs in recent years.

Yet Mr. Magaldi said something that illuminates the essence of progressive thinking, and in doing so, provides the final clue as to where reducing the profit incentive for drug companies leads. If a company stops making a drug or there is a recall, he argued, the federal government should step in to compel other manufacturers to fill the gap. That is nothing more than government coercion. If such coercion sounds familiar, that’s because it is the essence of ObamaCare, which cannot survive without compelling individual Americans to purchase health insurance, or pay a fine for refusing to do so.

Meanwhile, drug companies are reporting their biggest drop in profits in four years, and firms such as Pfizer, Merck & Co. and Bristol Myers Squibb Co. are “eliminating jobs, cutting costs and shedding business units to prepare for patent expirations.” Les Funtleyder, a New York-based fund manager at Miller Tabak & Co., explained such a reality “in is pipelines and corporate transactions–either acquisitions or divestitures” are “going to dominate [drug company] discussions.”

In other words, most of what is causing current drug shortages will continue to occur. As for those who contend drug company profits are “obscene,” here is a chart of the top 12 companies. Note the highest position of any drug manufacturer in the Fortune 500 is number 31, and that most of the twelve largest companies have seen considerable drops in profit from 2009 to 2010.

Yet if Americans still want to demonize drug manufacturers they are free to make that choice — the same free choice which also extends to any company that wants to stop manufacturing anything they consider unprofitable. That is what freedom and free-market capitalism is all about. Does such a system have its flaws? Unquestionably, but that isn’t the ultimate question. The ultimate question is how does it stack up against a socialist-inspired system epitomized in ObamaCare, in which profits are considered unseemly compared to societal “well-being.”

An increasing level of drug shortages ought to provide the answer to that question. But drug shortages are only the the first wake-up call for a healthcare system in which Democrats are doing their best to demonize the incentive of profits. If Americans don’t wise up, they may learn the same brutal lesson with respect to the rest of their healthcare that they are currently experiencing with regard to drugs: disincentives produce shortages. And such shortages make the “right” to healthcare meaningless.

Arnold Ahlert is a contributing columnist to the conservative website JewishWorldReview.com.


Pages: 1 2

  • Eraina

    I wonder what will happen if Israel is obliterated as so many in the world (and in the U.S.) want and all the pharmaceuticals and life-saving devices that it produces are no longer produced?

    • ajnn

      off-point, but an interesting speculation.

  • Don in B.C.

    Great article. This is just the tip of the iceberg. It'll be drugs, then doctors, then nurses, then hospitals. Eventually, you'll have multi-year waits for specialists and then multi-year waits and multiple cancellations for procedures to be performed…. sounds like my home province of B.C. actually

  • Lady_Dr

    Exactly right Eraina. In fact as anyone who has read "Start-Up Nation" knows, capitalism alwasy works, socialism always fails. Hence Israel has become more successful since it began turning towards more capitalism and less socialism. Socialism is a major component for the failure of so many European countries. DO you really want the some organization (government) which delivers your mail to handle your healthcare?

  • Alfonz Shmedlap

    W., 06/01/11

    Of course, The Ruling Elite will always have access to Rx drugs. It is only the ordinary mortals such as myself who will have to appear before a Death Panel to justify continuing my life on a cost-benefit basis, all thanks to Our Beloved Community Organizer from Crook County, Illinois. Al Capone would be proud of him.

    • astra

      Only if by then they can keep the members of a death panel alive and together long enough to even meet… the fools believe their new utopia will be so orderly.
      Ordinary mortals know better and by then will have nothing to lose.
      Ugly beautiful truth.

  • Mimi

    I am a free enterprise capitalist but you are going to have to admit that the government has helped create these mega drug companies with their obscene profits by taking old tried and ture medicines off the market so the drug companies could sell their overpriced new drugs. Paragoric was used for decades to treat diahrrea, colic, irritable bowel syndrome, gall bladder disease, and other digestive tract problems. A 39 cent bottle would last for years because a few drops in a teaspoon of water would cure ailments with one or two doses. Jimmy Carter made paragoric a sign for drug because "since it was an opium derivitave, druggies were likely to take massive amounts of it," notwithstanding the fact that if someone did that he would probably still be suffering from impacted bowels since it's main purpose was to treat diahrrea. Bill Clinton took it off the market, "because it had not gone thru the testing new drugs have to go thru" so drug companies could sell their $5 per pill acid reducers. No tests have been done and none are planned.

    • ajnn

      i took 'paragoric' many years a go. awful tasting stuff, the worst. yuchhh, yuchhhh.

      i wondered what had happened to it.

    • ajnn

      the economists call this 'creating an economic rent'.

      the market is imperfect and some govt involvement can be beneficial but you point out how such intervention is most typically an abuse distorting the market in an effort to create economic rents.

  • Mimi

    Note: Whereas Paragoric was once used to detox drug adicted new borns, doctors now have to use Heroin. Why hasn't some private lab run the necessary tests to get paragoric back on the market. It would solve a lot of our over priced and over used medical care problems.

    • ajnn

      interesting bit of information.

  • Jeremy

    Because the private lab won't make back the costs involved in doing the tests

  • Amused

    Alot of words to describe a simple practice in the Pharmacuetical industry -GREED . It's just getting to a point now where it becomes more noticeable , and that is because the industry is becoming MORE greedy . Yes it will get worse .And it's got nothing to do with the 'profit incentive being removed " . Ever notice the INCREASING number of drug commercials ? That nothing compared to the tactics used in the field . I know first hand a few folks in Merc . Your jaw would drop just watching them operate , and the mentality of their sales objectives is mind blowing .When a drug reaches the point where a patent expires and generics can be produced , there is no more big fat profits for the drug companies and if they run out of "improvements " to a particular drug to reapply for a patent , the drug will then be dropped frrom their product line . Research remains unhindered because it's exactly what produces the new drugs which produce more big fat profits . Thus the cycle starts all over again .

    • Chris

      Amused, you are as usual spouting the progressive talking points, which bear no resemblance to the truth.I worked for ten years in the Pharmaceutical business as a research chemist before being laid off along with thousands of my colleagues nationwide. The Pharma industry is not perfect, but not the evil greedy entity you describe. Government regulation, a ridiculously expensive FDA approval process, out of control lawsuits and bad patent law have been the downfall of the drug industry.

  • Amused

    Yup , there will most definitely be shortages , just hope it's not you in your hospital bed that needs them.