On the drivers of drug shortages: empirical evidence from Germany

PurposeDisruptions and shortages of drugs have become severe problems in recent years, which has triggered strong media and public interest in the topic. However, little is known about the factors that can be associated with the increased frequency of shortages. In this paper, the authors analyze the drivers of drug shortages using empirical data for Germany, the fourth largest pharmaceutical market.Design/methodology/approachThe authors use a dataset provided by the German Federal Institute for Drugs and Medical Devices (Bundesinstitut fur Arzneimittel und Medizinprodukte [BfArM]) with 425 reported shortages for drug substances (DSs) in the 24-month period between May 2017 and April 2019 and enrich the data with information from additional sources. Using logistic and negative binomial regression models, the authors analyze the impact of (1) market characteristics, (2) drug substance characteristics and (3) regulatory characteristics on the likelihood of a shortage.FindingsThe authors find that factors like market concentration, patent situation, manufacturing processes or dosage form are significantly associated with the odds of a shortage. The authors discuss the implications of these findings to reduce the frequency and severity of shortages.Originality/valueThe authors contribute to the empirical research on drug shortages by analyzing the impact of market characteristics, DS characteristics and regulatory characteristics on the reported shortages. The authors' analysis provides a starting point for better prioritizing efforts to strengthen drug supply as it is currently intensely discussed healthcare authorities.