Drug shortages: It’s just supply and demand
May 24, 2018
Have you tried to get scour boluses lately? Have you found some other the counter animal medications in short supply, no supply or on back order?
Those problems are actually part of a cycle that goes on all the time.
"First, over the counter meds are all generic and dirt cheap," said Dr. Gary White, a world-renowned veterinarian and researcher who has the development of several equine medications to his credit.
"The profit margin is so low that when it disappears, the manufacturers make something else for more profit." Inevitably, this leads to a shortage, driving up the price of the medication when the supply is gone. Then the plants start to make it again with the higher profit margin.
“The production and sale of veterinary medicines
— which include pharmaceuticals and biologicals (such as vaccines)
— are highly regulated products, similar to human medicines.” Heidi De Witt-Sommerfield, Boehringer Ingelheim U.S. Communications
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Calf scour boluses, which seem unavailable everywhere right now, are sulfur or tetracycline based, White said. These are generic active ingredients that are readily outsourced because there is no patent protection.
"Say you're making a generic sulfur-based bolus that makes two or three cents apiece," White said, "and if you were making something that is not generic, it might make 50 cents each." The manufacturers don't care what they make, they just want to make money, White said. "They're in it to make a profit."
Because the profit margin is so low on generic drug production and because Federal Drug Administration practices are so stringent, "many of the low end companies have just gone out of business," White said. Rigid testing standards such as sterility, expiration date testing and potency have driven many companies out of business.
"For a while, bute and dexamethasone were short (for horse vets) because there was not enough being made to keep up with the demand. Luckily, the FDA allowed Canadian companies to come in and make up the difference."
Low prices create a supply problem, a supply problem drives the price up, manufacturers start to make the medicine again.
"There is no patent protection for many low end drugs," White said. "We've lost some drugs altogether because the profit margin of producing them was so low."
Low profit margin is why acepromazene and penicillin have lately been in low supply according to White.
The patent protection is 17 years on a drug, White said. The patent can sometimes be extended, but when it's over if the active ingredient is readily available the profit margin will fall. Some drugs have other reasons to keep a good profit margin. For instance, there is only one company in the world that makes the raw material for the equine drug Adequan. It can't be outsourced because there is only one place that makes the active ingredient.
Drugs can be made in other countries with FDA approval. Many human drugs are.
Some drugs that have been on back order recently might be a case of underestimating popularity. For instance, LongRange is a relatively new dewormer which has become very popular in a short time. Or, one or more of the plants manufacturing LongRange may have failed an FDA test and been temporarily shut down, causing the parent company, Boehringer Ingelheim, to look for other manufacturers. The supply will likely catch up as the cycle continues.
"I work for BI's U.S. animal health business, headquartered in Georgia," said Heidi De Witt-Sommerfield of Boehringer Ingelheim U. S. Communications. "The production and sale of veterinary medicines – which include pharmaceuticals and biologicals (such as vaccines) – are highly regulated products, similar to human medicines.
"Some products, such as those used in food production, are governed by multiple agencies and sets of regulations, including the FDA, the USDA and EPA. In addition, we have high standards for ensuring the safety, efficacy, quality and reliability of our processes and the resulting products – both within our own facilities and those of our suppliers.
"Periodically, we may experience shifts in demand for certain products, disruptions in supply of materials or variability within our operations, and these factors may slow or impact the supply of products. For LongRange in particular, a number of these factors have created periodic disruptions in supply over the last several months, and we are working closely with our suppliers and our manufacturing operations to resolve this situation.
"The actions we are taking will require several more months for full implementation and normalization of LongRange supply across all distribution channels, though we expect availability to improve gradually over the course of the year."
The age-old basic economic model of supply and demand applies to drug production and availability. The bottom line is "they're in it to make a profit."