The Welfare Consequences of Oncology Drug Shortages

Since 2006, the U.S. has experienced a marked increase in prescription drug shortages. Oncology drug shortages have raised specific alarm because of their increased frequency in recent years and because in many case the drugs affected by shortages have few close substitutes, necessitating suboptimal treatment redesigns with potentially life-threatening consequences (Mello et al. 2005; Jensen et al. 2010; GAO 2010). In this study, we quantify the impact of oncology drug shortages on patient welfare. Combining data from the University of Utah Drug Information Service and the FDA on drug shortages with National Sales Perspective data from IMS health, we first assess the relationship between shortage announcements and drug sales and prices.  We then analyze the impact of oncology drug shortages on treatment using Medicare-linked claims data from the Surveillance Epidemiology and End Results (SEER) Program for seven cancer types.