News Release

Public Pharmaceuticals to Mitigate Drug Shortages


A recent STAT opinion piece argues that public pharmaceuticals are the best solution to the ongoing drug shortages in the United States.

    Brown is the director of health and economy at the Democracy Collaborative, where her research focuses on health and care systems, the pharmaceutical sector, and economic transformation for health and well-being. 

    Morten is an associate clinical professor of law at Columbia Law School and director of Columbia’s Science, Health, and Information Clinic

Brown and Morten write in the piece that so far, proposed solutions to the record high number of drug shortages in the U.S. are simply “Band-Aids on a broken system.” What’s needed, they argue, is to completely “transform the incentives that routinely produce shortages and other market failures” by building out a robust public option to manufacture and distribute essential medicines. 

“The federal government has unique advantages when it comes to making medicines––advantages of scale, of distribution, of legal authorities to authorize use of privately owned patents when needed and even, perhaps, to order domestic companies to make vital drugs for ‘national public health.’”

Brown told the Institute for Public Accuracy: “The profit motive is ingrained in the form of ownership [of pharmaceutical companies]. Because of the way the economy is structured, companies can’t really afford not to put profits first. They have to maximize returns to shareholders in the short term.”

Pharmaceutical lobbyists have argued that companies need tax breaks and federal subsidies to scale up the manufacturing of generic medicines. “Our contention,” Brown said, “is to stop funding a system that keeps failing us, and complement it with a long-term solution.” She added that other short-term solutions do exist, such as using existing authority like the Defense Production Act. Invoking the act would allow generic manufacturers to produce select patented drugs for the government. Generally, however, Brown said, public manufacturing aims to start by producing generics. “We know that prices don’t drop until three or more generics are on the market.” 

Public manufacturing is gaining momentum across the country, with California at the helm. Some states, like Washington, already have “broad legislation that empowers the state to produce or procure drugs from other states like California,” Brown said. “But at the moment, they have no money to back that up, and need to pass more appropriations to implement what they’re already allowed to do.”

She added: “Now that California is doing it, it makes it more real to legislators.” 

Brown notes that “politically and pragmatically, we are more likely to see faster movement on the state level.” One concern at the state level is to assure that all pharmacies can carry publicly-produced drugs. “The way that pharmacy benefit managers’ [PBMs] models work, PBMs get a cut of the list price of a drug. The more expensive it is, the more incentive they have to carry it. But they could get the post office or the VA to deliver those drugs. They could even pass legislation that grocery stores need to be purchase points.” 

At the federal level, Senator Elizabeth Warren (D-Mass.) and Representative Jan Schakowsky (D-Ill.) will also likely reintroduce the Affordable Drug Manufacturing Act this year. That legislation would reduce drug prices through public manufacturing of prescription drugs.