How Government Subsidies Create Billion-Dollar Drug Shortages

The Fiscal Policy Podcast with Fexingo: Government Budgets, Stimulus, and Public Spending · Jul 21, 2026 · 8m · transcript

This episode of The Fiscal Policy Podcast with Fexingo examines how the U.S. government's own subsidy programs inadvertently cause chronic shortages of critical generic drugs. Lucas and Luna dive into the 2024-2025 shortage of generic chemotherapy drugs, tracing the root cause to a combination of Medicare reimbursement caps and FDA orphan drug incentives that push manufacturers away from low-margin generics toward high-margin specialty drugs. They zero in on the case of cisplatin and carboplatin — two cheap, essential cancer drugs that suddenly became scarce in 2024 despite decades of…