Predictors of Drug Shortages and Association with Generic Drug Prices: A Retrospective Cohort Study

Background: Prescription drug shortages can disrupt essential patient care and drive up drug prices. Objective: To evaluate some predictors of shortages within a large cohort of generic drugs in the United States and to determine the association between drug shortages and changes in generic drug prices. Methods: This was a retrospective cohort study. Outpatient prescription claims from commercial health plans between 2008 and 2014 were analyzed. Seven years of data were divided into fourteen 6-month periods; the first period was designated as the baseline period. The first model estimated the probability of experiencing a drug shortage using drug-specific competition levels, market sizes, formulations (e.g., capsules), and drug prices as predictors. The second model estimated the percentage change in drug prices from baseline on the basis of drug shortage duration. Results: From 1.3 billion prescription claims, a cohort of 1114 generic drugs was identified. Low-priced generic drugs were at a higher risk for drug shortages compared with medium- and high-priced generic drugs, with odds ratios of 0.60 (95% confidence interval [CI] 0.44-0.82) and 0.72 (95% CI 0.52-0.99), respectively. Compared with periods of no shortage, drug shortages lasting less than 6 months, 6 to 12 months, 12 to 18 months, and at least 18 months had corresponding price increases of 6.0% (95% CI 4.7-7.4), 10.9% (95% CI 8.5-13.4), 14.2% (95% CI 10.6-17.9), and 14.0% (95% CI 9.1-19.2), respectively. Conclusions: Study findings may not be generalizable to drugs that became generic after 2008 or those commonly used in an inpatient setting. The lowest priced drugs are at a substantially elevated risk of experiencing a drug shortage. Periods of drug shortages were associated with modest increases in drug prices.