A complete rundown of the causes of drug shortages and what governments are doing about them

flu epidemic and fever reducer stockouts

with the recent flu epidemic, pharmacies across the country have been experiencing fever-reducing medications out of stock, especially children's liquid Tylenol, which has been out of stock for nearly a month. Parents have been stomping their feet because they can't get their child's medicine when they have a fever.

this isn't the first time this year that we've seen drug shortages, with more than 20,000 reports of drug shortages every month this year until October. And the list of medicines in short supply is getting longer and longer, with seasonal cold remedies, antibiotics, blood pressure medications, and other important medicines experiencing shortages.

why do drug shortages keep happening?

experts point to an unclear distribution structure as the root cause of drug shortages. The number of drug wholesalers in Korea has more than doubled in the past decade, with about 4,000 wholesalers as of last year, compared to 300 drug manufacturers.

this proliferation of wholesalers creates a structural problem: when a particular drug is out of stock, they all compete to get it back in stock, creating a vicious cycle that leads to a lack of supply for pharmacies and patients.

the problem with the pharmaceutical wholesale structure

wholesalers buy medicines from pharmaceutical companies and supply them to hospitals and pharmacies. However, medicines are subject to the drug price notification system and have a fixed list price, and their margins are usually only 2 to 5 percent when dealing with hospitals and pharmacies.

so for wholesalers, the key is to supply in bulk and increase turnover, but with the rapid increase in the number of wholesalers, this structure has become dysfunctional.

recently, various abuses have also been detected, such as the practice of tacking on Wigobi to the obesity drug Saxenda, the practice of providing out-of-stock drugs only after purchasing a certain amount of drugs, and even a salesperson was caught sending false texts to pharmacies saying that antitussive expectorant syrup would be out of stock after Chuseok, which actually caused a shortage.

the government's plan to improve the drug pricing system

the Ministry of Health and Welfare announced a plan to improve the drug pricing system to solve these problems.

currently, the price of generic drugs is 54 percent of the original drug, and we plan to reduce it to 40 percent by referring to the Japanese and French cases. We also plan to strengthen the cascading price reduction system, where the later the drug is released, the lower the price.

second, we will introduce a flexible contract system for drug prices. Currently, Korea passing phenomenon is occurring, where some multinational pharmaceutical companies are reluctant to launch new drugs in the Korean market because the domestic drug prices are lower than overseas. The government's plan is to solve this problem through a dual pricing system, where the listed price of a drug is different from the actual price.

stabilizing the supply of essential drugs

the government has also decided to improve the system of anti-exit drugs. Anti-exit drugs are drugs that are essential for patient care but are uneconomical to produce or import, such as antibiotics for newborns, antipyretics, penicillin, atropine, and other drugs that are essential in emergency situations.

in the future, we will lower the threshold for the designation of anti-exit drugs to make it a reality, and raise the threshold for cost compensation to minimize supply disruptions.

controversy over alternative formulations and ingredient name prescriptions

in addition to this, there are plans to activate substitution dispensing, a system that allows pharmacists to dispense generic drugs with the same ingredients, content, and formulation as the original drug prescribed by a doctor.

we are also discussing the introduction of drug ingredient name prescribing, in which doctors prescribe drugs by ingredient name instead of a specific trade name. However, there is a backlash against this as it infringes on doctors' prescription rights, so a social consensus is needed.

frequently asked questions

what should I do if my fever reducer is out of stock?

call several nearby pharmacies to check their inventory, or ask your pharmacist if you can substitute another brand of fever reducer with the same ingredients.

why do drug stockouts happen every year?

the proliferation of pharmaceutical wholesalers has led to an opaque distribution structure, which is exacerbated by the competitive rush to stock up when there are signs of stockouts.

what are exit-proof drugs?

a drug that is essential to patient care but unprofitable enough that pharmaceutical companies may stop making it. The government subsidizes the cost of the drug to help maintain supply.

are generics safe?

it's the same ingredients, content, and formulation of the drug, so there's no difference in effectiveness or safety, but patients can refuse it if they don't want it.

when will the government measures be implemented?

the drug price system improvement plan will be implemented in stages. The detailed implementation timing may vary depending on the revision schedule of related laws and regulations, so please check the announcement of the Ministry of Health and Welfare.

wrapping up

the problem of drug stockouts can only be solved by improving the distribution structure and overhauling the system. We hope that the government's plan to improve the drug pricing system will be effective and patients will be able to get the drugs they need in time.

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