From Fort Smith to Forrest City, Magnolia to Mountain Home, I hear about prescription drug shortages nearly every day. At cancer clinics, ERs, outpatient hospitals, and operating rooms, healthcare providers are juggling to make ends meet.    

It’s a dangerous cycle. Pharmacists have limited stock, providers want answers, manufacturers cannot meet demand, and patients continue to suffer. 

The Senate Commerce Committee recently held a hearing to investigate aspects of the
national drug shortage. Specifically, it focused on “middle men” who impose significant mark-ups on drugs in short supply. 

Some used the investigation as an opportunity to attack the free market. Others sought to justify new pharmacy regulations or make the case for more federal bureaucrats. Unfortunately, as is so often the case in Washington, these distractions missed the bigger picture. 

The drug shortage problem provides a valuable lesson about government pricing gimmicks and supply-and-demand. It’s also a painful reminder that healthcare delayed is healthcare denied. 

No one pays $250 for a loaf of bread. There are no 8,000 percent markups in a competitive market. 

Today, nearly 80 percent of the drugs in shortage are generic, injectable drugs. These drugs are generally inexpensive. Some cost five or six dollars. Some have been around for many, many years. And they save lives. 

There should be no shortage of a life-saving, six-dollar drug. 

However, companies are producing dozens of these generic cancer drugs at—or near—a loss.  This is a real danger and a real threat to patients.  

While the impact of drug shortages are felt far-and-wide, the cause is quite simple. Artificially low Medicare reimbursement rates are jeopardizing the profitability of these
drugs.  

Put simply, in an effort to save money, the government created a drug shortage. 

Even the President’s health advisor, Zeke Emanuel, has acknowledged this fact, “You don’t have to be a cynical capitalist to see that the long-term solution is to make the production of generic cancer drugs more profitable.” 

As a former healthcare practitioner for over 25 years, I understand this reality. There is
no free lunch.  

We can always create a new federal agency, pass new legislation, or play gimmicks with
government financing. However, we cannot expect doctors, pharmacists, hospitals and drug manufacturers to provide products and services without adequate payments. 

As Arkansas tackles Medicaid payment reforms and Washington wrestles with Medicare
reimbursement challenges, we cannot ignore this valuable lesson. 

We can only put so many fingers in the dyke before water starts leaking out elsewhere. In healthcare, when water starts leaking, it’s patients who suffer.