On Medicine Shortages

We received an interesting e-mail yesterday that there is a nationwide shortage of a medicine called furosemide, or Lasix (no relation to the eye-surgery).  Without going to much into detail, Lasix is a mainstay generic/old medication in the treatment of any condition in which a patient has too much fluid and we'd like to get it off of them.  Conditions such as heart failure, kidney failure and liver failure are commonly treated with Lasix.  More acutely, Lasix is a mainstay drug for patients on cardiology or intensive care services.  It just so happens that I am spending this month in the Coronary intensive Care Unit, hereinafter referred to as CCU.  In the CCU, we use Lasix commonly and on nearly every patient.  There are other medications that work similarly or accomplish the same thing, but rarely at such nice dosing intervals or at low cost. 

We received the following information via email:
furosemide 40mg is $0.30

bumetanide 1mg is $0.68
Torsemide 20mg IV is $6.55
Ethacrynic acid 50mg IV is $511.58

These are all per dose costs.  Note that Lasix, the least expensive, is on shortage.  How could this have happened?  According to a Bulletin from the American Society of Health-System Pharmacists, there is no available reason for the shortage.  According to the FDA it is due variously to manufacturing delays and increased demand. So no factory burnt down, or was contaminated, or at least not to public knowledge.  It does appear that one manufacturer will no longer be making the drug.  And therein lies the issue.

Why does Lasix cost $0.30 per dose?  It would seem as though this price is too low.  In a reasonably free market, when supply diminishes and demand remains constant, suppliers will raise prices and demanders will either pay the higher prices or substitute where available.  Our hospital plans to substitute. However, when prices are not allowed to rise to signal the market that supply is decreasing (because of government price controls or regulation) shortages just happen, without the clear warning that a price increase signals.  I will not pretend to justify the logic behind price controls, but I will clearly present such controls as a cause of shortages.  Shortages can only happen in the presence of government intervention....  See the Philippines as a case study.  We do not have direct price controls in the US, but in order to participate in Medicaid maximum drug prices must be adhered to.  Even if Lasix is not price controlled, the decreased price of other medicines made by the same manufacturer may force them to scrap production of margin generics.  Combined with exceedingly high barriers to entry for pharmaceutical manufacturers and it is surprising that there not more shortages.

I return now to the hospital where I am curious as to how this will play out.  We are told that we have ample supply for several weeks and that more is coming to replenish our supply.  The question is, will we physicians prescribe as usual, not believing the shortage, or will we change our behavior.  It is a classic issue within medical training of individual patient vs. systemic thinking.  My prediction is that nothing will change unless pharmacy begins to dictate our prescribing habits, which will cause mild grumbling but no real outburst from the physicians.  Then we will return to prescribing as regular once the shortages ends.