Experts Believe Cheap Generic Drugs Are Hurting the U.S. Supply Chain

The low prices of generic drugs in the U.S. are causing financial difficulties for biotech and pharmaceutical companies, leading some to go out of business. Experts warn that the prices are so low that manufacturers lack the incentive to produce important medications. This is resulting in a vulnerable drug supply chain that can be disrupted by simple factors or natural disasters. Furthermore, there are concerns about drug shortages, with some experts claiming that the current shortages are the worst in a decade.

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Frequently Asked Questions

Q: Are cheap generic drugs negatively impacting the U.S. supply chain?        A: Yes, experts suggest that the low prices of generic drugs in the U.S. are not sustainable, and this poses a challenge to the supply chain. Companies may struggle to cover costs and stay profitable, leading to potential shortages and disruptions. SupplyChainBrain Q: What are the vulnerabilities in the U.S. supply of generic drugs?        A: The U.S. supply of generic drugs is heavily dependent on global supply chains, especially for raw materials like active pharmaceutical ingredients (APIs). Approximately 87 percent of API facilities for generic drugs are located overseas, leaving the U.S. supply chains of essential medicines vulnerable to disruptions. White House Fact Sheet Q: What role do pharmaceutical wholesalers play in U.S. drug spending?        A: Pharmaceutical wholesalers are a critical part of the drug supply chain, as they distribute most prescription drugs in the United States, both brand-name and generic. They are involved in buying and selling these drugs and influence U.S. drug spending through their operations. Commonwealth Fund Q: Is the Biden-Harris administration addressing supply chain issues for pharmaceuticals?        A: Yes, the Biden-Harris administration has put forward plans to revitalize American manufacturing and secure critical supply chains, including those related to pharmaceuticals. They aim to strengthen U.S. supply chains across key sectors and have highlighted the importance of domestic production and purchasing. White House Fact Sheet Q: How do drug shortages affect generic products?        A: Drug shortages disproportionately affect low-cost generic products. This is due to several factors, including market dynamics and cost pressures that can lead to reduced availability of these drugs. Finance Senate Testimony Q: Does the FDA monitor the quality of generic drugs?        A: The FDA staff continuously monitor approved brand-name and generic drug products to ensure that medicines at all levels of the supply chain, from active ingredients to the final product, meet safety, efficacy, and quality standards. FDA Generic Drug Facts