Value in Health, the official journal of ISPOR—the professional society for health economics and outcomes research, announced today the publication of new research showing that the lowest priced generic drugs are at a substantially elevated risk of experiencing a drug shortage, and that periods of drug shortages are associated with only modest increases in drug prices. The report, “Predictors of Drug Shortages and Association with Generic Drug Prices: A Retrospective Cohort Study,” was published in the November 2018 issue of Value in Health.

The recent phenomenon of rising generic-drug prices and generic-drug shortages threaten the availability of low-cost generic drugs. However, little is known regarding the etiologies contributing to generic-drug shortages. Furthermore, although rising prices have been observed for older generic drugs such as digoxin and pyrimethamine, the extent to which drug shortages increase prices is unknown.

In this study, more than 1.3 billion prescription records were analyzed between 2008-2014 to identify a cohort of 1,114 generic drugs representing 119 drug-classes. Over the 7-year period, nearly one-third (28%) of the generic-drug cohort experienced a shortage. After adjustment, compared to drugs with low drug-prices, generic-drugs with medium and high prices were 30% to 40% less likely to experience a shortage. When drug shortages did occur, they were associated with modest increases in price, ranging between 6% to 14%.

“In this study, we were able to characterize for the first time the secular trends of drug shortages in generic drugs, identify the predictors of drug shortages, and link drug shortages to changes in generic drug prices,” said author Chintan Dave, PharmD, PhD, Brigham and Women’s Hospital, Boston, MA, USA. “In the short-term, the FDA should recognize that very low generic drug prices might be a factor in subsequent shortages and continue to consider the risk of shortages when taking steps to promote the safety and quality of the generic drug marketplace. Furthermore, although drug shortages have been associated with some well-publicized examples of rising generic drug prices, the low prevalence of drug shortages in recent years coupled with their modest association with price increases in our study demonstrate that other factors, such as market competition levels, are more important contributors to this phenomenon.”