Health Affairs: Drug Shortages
From 2005 to 2010 the number of reported drug shortages almost tripled. These shortages were especially acute with regard to generic sterile injectable drugs that can be critical and life-saving to patients fighting cancer, combatting an infectious disease, or undergoing surgery. ... health care officials and elected leaders have taken steps to mitigate drug shortages .... But recent news coverage of shortages ... has once again brought attention to the issue. ... One of the most cited reasons ... is low reimbursement rates from Medicare Part B that were initiated ... in 2003. It is theorized that these lower payments incentivized both physicians and manufacturers to switch to higher-cost drugs, thereby reducing investment in cheaper generic drugs, leading to "growing market concentration" and eventual drug shortages (Stencel, 9/11).