Causes and consequences of drug shortages
Pharmacy
Public Health, Healthcare Research, Social and Occupational Medicine
Economic Policy, Applied Economics
Final Report Abstract
Medicine shortages are a common global problem with severe consequences for patients and healthcare systems. Despite national and global efforts, there is a lack of standardized definitions and comprehensive analyses of the causes and consequences of these shortages. This project aimed to investigate the causes and consequences of medicine shortages, particularly in the context of the COVID-19 pandemic from a health economics and health policy perspective. The goal was to identify the multidimensional causes of shortages and empirically analyze their role and impact on healthcare delivery and costs. In addition to a global analysis of causes underlying medicine shortages in North America, Europe, and the rest of the world, empirical investigations of both causes and consequences focused on the healthcare systems of Germany and Switzerland. The project involved extensive data collection and processing, linking data on causes, reported medicine shortages, regulatory frameworks, trade flows, and healthcare systems. Various research methods were employed, including literature review, network analysis, regression discontinuity in time design, and econometric analyses. We employed research designs that allow causal statements of causes and consequences of medicine shortages. • Study 1: Through a literature review and network analysis, a framework was developed that highlights the complex, multidimensional causes of medicine shortages. Economic factors, such as profitability, proved central, with the number of identified causes and the role of relationships between these causes differing across the three global regions: North America, Europe, and the rest of the world. An online dashboard was developed as a resource for policymakers and for identifying causal networks to support effective strategies in combating supply shortages, strengthening the resilience of healthcare systems, and facilitating further empirical analyses. • Data Curation on Supply Shortages: For the prescription medicine market, data from pharmaceutical reference databases, prescription volumes from health insurers, and supply shortage reports from 2018-2021 were combined to investigate the role of selected causes concerning the availability of medicines in studies 2-4. • Study 2: Between 2018 and 2021, 1-2% of the overall market was continuously affected by supply shortages. Using a Regression Discontinuity in Time Design, the analysis showed that the COVID- 19 pandemic temporarily doubled the shortages in Germany, particularly in markets highly dependent on global supply chains (i.e., production sites with an average distance of more than 1,700 km) and with relatively high competition. Monitoring active ingredients with high global dependence can help mitigate global supply chain shocks. • Study 3: An analysis of medicine supply in Switzerland before and during the pandemic revealed that all classes of medicines were affected. However, mandatorily stocked medicines proved less susceptible to shortages. • Study 4: The analysis of the impact of the 2018 valsartan recall in Germany, based on a Differencein-Differences approach, showed a temporary increase in healthcare costs and fragmentation of pharmaceutical supply. The study identified higher pharmaceutical costs of about 3% following the valsartan recall, and an increased use of services as well as fragmentation of ambulatory care including pharmacy services. • Workshop: The project results were discussed in a two-day workshop with researchers, industry representatives, and policymakers to develop solutions for future shortages. This workshop led to further discussions and broader public engagement. Conclusions: The results illustrate that medicine shortages have complex, region-specific causes that are strongly influenced by economic factors. The COVID-19 pandemic significantly exacerbated these shortages in the short term, especially in highly interconnected global markets. In healthcare delivery, shortages have led to increased medicine costs and higher use of outpatient services.
Publications
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A Review of the Multidimensional Nature of Medicine Shortages for Evidence-Based Interventions [Mimeo].
Panhuysen, J., Goetjes, E., Blankart, K. & Shaikh, M.
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Medicine Shortages, Global Dependency, and Competition in Times of a Pandemic – a Regression Discontinuity in Time Approach [Mimeo].
Goetjes, E., Panhuysen, J., Shaikh, M. & Blankart, K.
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The consequences of medicine shortages on healthcare utilization and fragmentation of care [Mimeo].
Panhuysen, J., Goetjes, E., Blankart, K. & Shaikh, M.
