Pharma shrugs: now is the time at SDA when we juxtapose!
Ayn Rand, 1957;

Men considered only the ‘welfare’ of the patient, with no thought for those who were to provide it. That a doctor should have any right, desire or choice in the matter, was regarded as irrelevant selfishness; his is not to choose, they said only ‘to serve’…Their moral code has taught them to believe that it is safe to rely on the virtue of their victims. Well, that is the virtue I have withdrawn. Let them discover the kind of doctors that their system will now produce..

Philadelphia Inquirier, 2010;

Almost all the shortages are generic drugs, Hansen-Flaschen said, an apparent reflection of the fact that there are fewer manufacturers of such medications, which generate less profit than do brand-name drugs. With few producers, any breakdown in manufacturing or shortage of raw materials can trigger widespread shortages.
Earlier this month, responding to a shortage of chemotherapy drugs in Minnesota, Sen. Amy Klobuchar (D., Minn.) wrote to FDA Commissioner Margaret Hamburg asking that the FDA intervene to “ensure that patients have access to the medications that are essential to their health and well-being.”
As it is, the FDA has few tools to resolve shortages. It cannot, for instance, order drug companies to make more drugs.

More from the CBC – A study released this week by the Canadian Pharmacists Association highlighted serious concerns over a lack of generic drugs and commonly prescribed medications, like penicillin.
Reading less like the National Post than it does Atlas Shrugged…

The report notes that the reasons for the shortages are varied, from supply problems with raw ingredients to more stringent regulations that delay manufacturing, and production glitches in specific factories. The report also cites programs in Ontario and other provinces that have lowered the price of generic drugs and “act as a disincentive to production.”
Among the association’s recommendations is that manufacturers put the needs of patients first and collaborate with competitors to ensure supply is not curtailed.

What was that line about virtue withdrawn?
Dr. “Langmann”, in the comments…

I fully expect in my lifetime for goverment to have killed the golden goose that is pharma. First they’ll end up creating large monopolies as a side effect of their policies of controlling prices and production. Finally after wondering why things became a monopoly, they’ll blame the “evil” capitalists, and publisize the industry further contributing to it’s demise and inefficiency.
Then those of us who remember Soviet style medicine, and those of us with colleagues from Cuba who know and remember the realities of that system will once again experience the system where there is a stockpile of quality medications for those considered politically important. And then a pile of poor quality medications for those not considered at all. And the elderly… ha.

And more.

Although I am primarily a research pharmacist, I do work in community once a week. Here is what I have seen happening over the last 2-3 years, accelerated of course by the reforms in Ontario.
1. Consolidation of production. There used to be at least 3-4 big players of generics in Canada. Now there is really only 1-2 which are the big players and as part of the consilidation certain strengths, dosage formulations have been phased out. Guess governments are thinking a small generic will pick up the slack. Trouble is these are the drugs which will be hard to make for that regulated price of 20% of brand (Ontario reforms).
2. Production screw-ups. Since the only way to remain viable is to keep inventory as low as possible any problem in a production line means inventory drops and thus shortages. ApoPharm had production issues by the FDA for their export to the US. Didn’t meet quality indicators. Lots of temporary shortages. What does that say about Health Canada though?
3. Raw supply. Yup much of the raw supply comes from countries like India and China. And often with just one plant/factory. India had 90% of the pigs used for making heparin. There was some kind of flood….world wide shortage of heparin. China to the rescue and you know what happened with that. Very scary indeed.
4. Quotas. Brand name companies will often supply drug by market size at least until they can get a full production line going or until the market conditions are good. Don’t know if generic companies are doing the same.
It’s just in time inventory for everyone. Pharmacies keep just enough to fill their known patients and then for 1-2 more. With inventories running at over $200,000 and much more, and no return for any carrying costs (illegal in most provinces to charge for inventory carrying costs) it makes pharmacies spend 1-4 hours/day in trying to find a supply of drug for the next day. Provincial governments demand pharmacists and physicians to provide care “with no thought for those who are to provide it.”
I maintain, private providers of health care (primarily physicans and pharmacists) are slaves to the state. Paid slaves, but slaves non the less.
Expect a hew and cry for a provincial or federal drug manufacturing plant.
Or for provincial governments to allow imports from Mexico……or Cuba.
It is my contention, and there is data to support this, that WITHOUT government intervention in pricing, generic prices would be cheaper than currently.
For the near future, look what is happening in Ireland

(Original post updated and bumped)