Latest / The Fiscal Policy Podcast with Fexingo: Government Budgets, Stimulus, and Public Spending
How Government Subsidies Create Billion-Dollar Drug Shortages
In this episode of The Fiscal Policy Podcast, Lucas and Luna examine how government pricing policies and subsidy structures inadvertently cause chronic drug shortages in the US. Using the case of generic injectable chemotherapy drugs—where a 400% price increase for one supplier led to a 30% shortage rate nationwide—they trace the problem to Medicare reimbursement rules that tie payments to average sales price, creating a race to the bottom. They discuss the Inflation Reduction Act's impact on drug pricing and why manufacturers abandon low-margin essential drugs, leading to a…
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