We Americans are blessed with plenty – with only 5% of the world’s population, we command 25% of the resources. Our $15 trillion in GDP represents 26% of the global total. At $2.0+ trillion, our annual healthcare expenditures eclipse those of any other country, in absolute (total dollars), relative (% of GDP) and per-capita terms.
So, in this “land of plenty” how does one explain chronic shortages?
In his column for Bloomberg, Ramesh Ponnuru, details how there are chronic shortages of 246 medicines. 90% of anesthesiologists have experienced shortages for the basic drugs of their profession.
The culprits: low profit margins and government regulations. It appears the FDA has made the approval, inspection, and compliance process so cumbersome that companies are loathe to serve markets not meeting certain profit margin thresholds as it’s simply not “worth it”.
Regulations are an interesting thing: they are necessary to ensure safety and to provide a level playing field; however, when they are excessive, they can actually curtail business. In this case, they may actually be threatening the health of the American populace – exactly whom the FDA is chartered to protect. This is a classic study in Economics 101.
This needs to be fixed – there needs to be simpler, streamlined approval process for companies to expand production of much needed medications.