Opinion: Shortages of generic drugs can’t be blamed solely on group purchasing organizations
The Hatch-Waxman Act of 1984, which gave rise to the modern generic drug market, was one of the most significant cost-reducing policy innovations of the last 40 years. In 2021 alone, the use of generic and biosimilar drugs saved $373 billion in health expenditures. More than 90% of prescriptions filled that year were for generics or biosimilars, up from just over 18% the year that Hatch-Waxman was passed.
Today, however, generic drugs seem to be a victim of their success. Important categories of drugs — from antibiotics to chemotherapies to saline solution — experience persistent shortages and inadequate quality. Why? Prices have dropped so low that manufacturers don’t have the resources to produce adequate quantities of drugs or ensure compliance with quality standards. Such shortages are becoming a feature of the generic pharmaceutical industry.
