TY  - JOUR
AU  - Stomberg, Christopher
TI  - Drug Shortages, Pricing, and Regulatory Activity
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 22912
PY  - 2016
Y2  - December 2016
DO  - 10.3386/w22912
UR  - http://www.nber.org/papers/w22912
L1  - http://www.nber.org/papers/w22912.pdf
N1  - Author contact info:
Christopher Stomberg
Bates White Economic Consulting
E-Mail: chris.stomberg@bateswhite.com
M1  - published as Christopher Stomberg. "Drug Shortages, Pricing, and Regulatory Activity," in Ana Aizcorbe, Colin Baker, Ernst R. Berndt, and David M. Cutler, editors, "Measuring and Modeling Health Care Costs" University of Chicago Press (2018)

M3  - presented at "Measuring and Modeling Health Care Costs", October 18-19, 2013
AB  - This study examines the patterns and causes of shortages in generic non-injectable drugs (e.g., tablets and topicals) in the United States. While shortages for injectable drugs have garnered more attention, shortages of other forms of prescription drugs have also been on the increase. In fact, they follow a strikingly similar trend with a number of important tablet drugs having recently been affected by shortage. This poses important questions about the root causes of these trends since most explanations found in the literature are specific to generic injectable drugs. Using a simple heuristic framework, three contributing factors are explored: regulatory oversight, potential market failures in pricing/reimbursement, and competition. This paper features an empirical examination of the contribution of changes in regulatory oversight to drug shortages. A pooled dynamic regression model using FDA data on inspections and citations reveals a statistically significant relationship between FDA regulatory activity (inspections and citations) and drug shortage rates. This result cuts across both injectable and non-injectable drugs, and could reveal a transition in equilibrium quality that should be transitory in nature, but it should also be interpreted with care given the other factors likely affecting shortage rates.
ER  -