We need some new drugs

Whether it’s the lack of Adderall for people with ADHD, children’s Tylenol, or lifesaving cancer treatments, drug shortages are plaguing American patients. At the end of 2022, there were 295 drug shortages, a five-year high, according to a US Senate report.

While the causes are both national and global, Massachusetts, with expertise in biotech and life sciences, needs to react. There may be an opportunity to contribute manufacturing, and there also may be ways for states and hospitals to secure long-term contracts or stockpile supplies.

The causes of the shortages generally boil down to economics and supply chain problems. Most pharmaceutical ingredients that go into these drugs — such as those that make ibuprofen or paracetamol effective — are made outside the United States, generally in China and India, and many of the drugs are made overseas. That leaves the supply chain vulnerable to disruptions at overseas factories, whether due to natural disasters, safety concerns, or government decisions to limit exports.

Economically, generic drugs are cheap, which helps consumers and makes them a vital part of health care. But that also means manufacturers have little profit margin. Some manufacturers may choose to stop making these drugs, leaving only a few suppliers. Companies that produce generics have less money to modernize facilities and build in the redundancies needed to continue production if something goes wrong or to increase production if demand increases. Many drug shortages today are older, low-cost, generic, often injectable drugs that are complicated to make but inexpensive to buy.

The Senate report found that one of the major ways the United States can mitigate the risk of shortages is by manufacturing more drugs domestically. Massachusetts could play a role, if the manufacturing can be done in a way that is financially viable.

Traditionally, Massachusetts companies have focused on making small-batch, specialty drugs. Its skilled workforce and advanced technology is well-suited for developing groundbreaking gene and cell therapies, making drugs that are personally tailored to the patient, or making the small batches of medicine used for research and development or to treat rare diseases. When it comes to manufacturing large amounts of commercialized drugs, like many of the generics facing shortages, Massachusetts cannot compete with places like Puerto Rico or North Carolina, which have lower costs for land, energy, and labor.

But lawmakers on Capitol Hill are discussing ways to make manufacturing generics more profitable, through initiatives like tax breaks for manufacturers. And some states are exploring ways to expand production.

California enacted legislation in 2020 authorizing state government to enter into contracts with manufacturers to make and distribute generic prescription drugs, a program billed as a way to lower drug costs and alleviate potential shortages. But that program has been slow to get off the ground and it was only this March that California Governor Gavin Newsom announced the first $50 million contract to buy insulin from nonprofit drug company Civica.

Maine is considering a similar partnership with Civica. Other states, including Arizona, Illinois, and New York, have introduced bills to explore state-run generic drug manufacturing programs.

In Massachusetts, state Senator Paul Mark introduced a bill that would direct the Health Policy Commission to determine the feasibility of state-directed manufacturing of generic prescription drugs or biosimilars, drugs similar to ones already approved, with the intention of lowering prices and addressing shortages. Mark’s district includes Adams, which has a quarry that’s mined for the calcium carbonate used in drugs, and he suggested Massachusetts’ research universities and its life sciences and manufacturing industries could all play roles.

It’s an idea worth exploring, particularly in the sphere of biologic drugs — drugs made from living organisms rather than chemical processes — where many Massachusetts companies have expertise. It’s far from certain if the economics of a state program would work, especially since Massachusetts is a smaller market than California. Barring raising drug prices at a time when health care spending is already high, it would likely take public investment in improving manufacturing processes to make it efficient for manufacturers to develop low-cost generic drugs. But this could be an area where public investment pays off.

Another promising initiative is Civica, a nonprofit established in 2018 to combat drug shortages, which has 55 member health systems covering 1,550 hospitals, including a small number in Massachusetts. The company offers long-term contracts at a set price to drug makers and hospitals to sell hospitals commonly used generic, low-cost drugs. The company is building a manufacturing facility in Virginia, but currently it buys from mainly US and European factories that might otherwise stop making those drugs without a long-term contract. Massachusetts hospitals could explore partnerships with Civica as a way to ensure a steady drug supply.

Ultimately, as the Senate report notes, the onus will be on the US government to collect better data on supply chain vulnerabilities and work with the industry to address them, including by bringing manufacturing back onshore in a financially sustainable way.

A Senate report found that one of the major ways the United States can mitigate the risk of shortages is by manufacturing more drugs domestically.