The generic drug business has become a hostile environment for American companies.
Prices for the often critical medicines have dropped so low that it has become difficult for U.S. manufacturers to compete with companies overseas.
One after another, generic-drug makers have gone bankrupt or moved their operations overseas or cut the number of products they offer.
The number of facilities making generic drugs in their final form in the U.S. has dropped by roughly 20% since 2018, to 243, according to federal data.
Drug shortages have become common. Today, 300 medicines are in short supply, according to the American Society of Health-System Pharmacists.
Regularly now, hospitals and patients must scramble to find doses of the drugs they need if there is one hiccup in a pinched supply chain or a quality problem shuts down a manufacturing line.
Doctors, patients and policymakers, including former President Donald Trump and President Biden, have decried the shortages and called for fixes.
Among the prescriptions: reinvigorating American manufacturing. But little has been done.
For years, U.S. plants produced pills that Americans relied on to relieve everything from headaches to heartburn.
Yet their prices kept rising, triggering cost-control efforts like the authorization of lower-priced, or generic, versions of drugs that lost patent protection.
Pharmaceutical manufacturing plants started popping up overseas.
Because their labor and other costs were less than U.S. factories, they could sell generic medicines at lower prices.
Meanwhile, the organizations that buy the drugs were consolidating.
Wholesalers, which buy the drugs dispensed by pharmacies, and group purchasing organizations, which work on behalf of hospitals, used their size to win even lower prices from the manufacturers.
Today some crucial generic drugs now sell for $2 or less a pill or injection. India is now the No. 1 supplier of solid-form generic drugs to U.S. patients, according to the nonprofit U.S. Pharmacopeia.
When it comes to making drugs, Asian countries usually have a 40% to 60% lower cost structure than Western nations, University of Minnesota economist Stephen Schondelmeyer told Congress earlier this year.
The Biden administration has said it would use the Defense Production Act to tackle drug shortages by investing in “domestic manufacturing of essential medicines.”
