Lethal Shortages

William Faloon

Sick-care costs are higher in the United States than anywhere else on Earth. Nowhere are profit margins greater for pharmaceuticals and nowhere are there more drug regulations.

Yet this nation faces critical shortages of drugs that conventional medicine needs to keep patients alive.

The crisis has become so dire that panicked government officials have taken unprecedented steps to allow temporary band-aid solutions.

Like the many failed communist states that litter this planet, these kinds of problems will not be eliminated until today’s broken sick-care system is torn down and replaced.

In this instance, there is no real drug shortage. The scarcity problem exists because of the suffocating impact of inappropriate regulations, which distorts the marketplace and creates artificial shortages aimed at defrauding consumers via outrageous price gouging.1

Shortages of Lifesaving Medications

Profit margins for prescription drugs are beyond obscene.2-8 With so much money to be made it is difficult to imagine why there would ever be a “shortage” of any prescription drug, let alone the widespread crisis that has emerged.

Federal bureaucrats and politicians, along with hospital and doctors’ groups, are rushing to find solutions for critical shortages of drugs to treat life-threatening illnesses, including bacterial infections and common cancers.9

When these drugs are not readily available, the narrow window of time to cure a cancer or eradicate an infection can lapse, resulting in American patients needlessly dying.

By mid-year 2011, a record-breaking 180 different drugs needed to treat leukemia, solid tumors (like breast and colon cancers), infections, and other diseases had been declared in short supply.10

The impact according to front-line doctors is that patients are in serious jeopardy because they cannot obtain drugs crucial to keeping them alive.

This problem came to light at the end of year 2010, when four hospital patients were killed because the drugs they needed were not available. Two patients died because the hospital could not get morphine and substituted a more powerful drug instead; another died when a drug in short supply (epinephrine) had to be diluted so much that it was ineffective. A fourth patient died because they could not get an antibiotic to treat their infection.11

This was just the tip of the iceberg as surgery procedures and chemotherapy sessions were postponed because necessary drugs were not available. Cancer alone kills 1,500 Americans each day,12 and whether conventional therapy can effect a cure is highly dependent on the availability of specific medications. In some cases it’s possible to substitute one chemo drug for another, but considering the miserable side effects and mediocre efficacy of these therapies, any changeover reduces the odds of a patient achieving a remission or cure.

Why Are These Shortages Occurring?

The FDA and the pharmaceutical industry are coming up with all kinds of pathetic reasons as to why medications that have been around for decades are all of a sudden not available. They cite shortages of raw materials and quality issues that have closed down manufacturing plants.13,14

Considering that the synthetic compounds that make up most drugs can be mass-produced in virtually limitless quantities, and the huge profit margins inherent with prescription drug manufacturing, these preposterous excuses would be laughable if it were not for the heartbreaking fact that Americans are suffering and dying from the consequences.

The underlying reason for most of these drug shortages is pharmaceutical profits. In some cases, soon after a shortage manifests, new supplies become available at prices as much as 20 times higher than what they were before the “shortage” occurred.15 In other cases, doctors are forced to use expensive brand-name drugs because the low-cost generics of equivalent efficacy “disappeared” from the market.

Another situation involves pharmaceutical companies “pretending” the costs of making older products no longer justifies producing them, thereby forcing patients onto different and more expensive drugs that may be less effective for the patient.

Seeing Past These Charades

For 32 years, we at Life Extension® have been involved in producing thousands of different products, most that require natural ingredients that are sometimes in short supply. In almost every instance, we have been able to find the natural ingredient that may have encountered growing problems in certain parts of the world so that our members are not deprived.

When it comes to “costs” of making products that do not sell as well as they used to, we sometimes make only a few thousand bottles a year of an item because some of our members want to continue using it. There is so much surplus manufacturing capacity in the United States, there is never a reason to stop making a lifesaving product because it “costs too much.”

One exception we encountered a while back was with low-dose aspirin. Our manufacturer quit making it and it took over a year for the FDA to approve a new manufacturer source, even though the new manufacturer had been producing aspirin tablets for decades. We weren’t overly concerned because our members could buy low-dose aspirin from other places. What this real-world example exposed, however, is the absurdity of FDA rules that require companies to jump through all kinds of regulatory hurdles to offer a product as simple as aspirin.

This was not our first problem with the FDA interfering with our ability to sell aspirin. Back in the early 1990s, we were the first to offer an aspirin formula for the purpose of reducing heart attack risk. We called the product “First Amendment Aspirin” because we cited on the label references to published scientific studies showing the ability of low-dose aspirin to reduce heart attack risk.16,17 We contended we had the First Amendment right to disseminate this information to the public. The FDA vehemently disagreed.

The FDA retaliated by threatening our manufacturer with harassing inspections if production of First Amendment Aspirin was not halted. Our manufacturer capitulated to FDA censorship, but we succeeded in getting the word out, thus sparing countless numbers of Americans from heart attack. Later studies showed that daily use of low-dose aspirin reduces overall cancer incidence by 20%.18

Shocking 99.5% of Hospitals Reported Drug Shortages

A survey by the American Hospital Association found that 99.5% of hospitals reported at least one drug shortage and 44% reported a shortage of 21 or more drugs.19 This same survey found that 62% of hospitals delayed treatment and 53% were not always able to provide patients with the most effective treatment. Even more shocking were hospitals admitting that 58% of patients received less than optimal treatment because of the drug shortages and 32% of patients experienced an adverse outcome (including death). In another survey of hospital pharmacy directors, an estimated $216 million is spent annually managing drug shortages.20 In as much as the drug shortage problem is caused by governmental over-regulation, one can see how wasted federal tax dollars are the culprit behind needless deaths and bloated health care costs.

Government’s Proposed Solutions

While there is no logical reason for there to be a shortage of any prescription drug (other than the disgusting impact of over-regulation), one solution being proposed is to create a federal government-funded stockpile of crucial cancer medicines. This would require the expenditure of federal tax/debt dollars in an attempt to overcome a problem created by inane regulations (also funded with tax/debt dollars).

Another solution Congress is considering is to give the FDA the power to demand that drug makers give early warnings to impending supply disruptions. While this band-aid approach will sometimes work, the FDA lacks the competence to manage the inventory needs of the $17 billion a year generic drug business.

A group of oncologists has started a non-profit drug company to import drugs from other countries.10 While the FDA considers this illegal, it is unlikely the FDA will stop it. Of course if it were not for the artificial barrier erected against imported drugs, there would be no shortages, as there are ample supplies of these medications in other countries.

Quote from Journal of the American Medical Association

“The growing problem of drug shortages is forcing some patients to take less effective medicines or to delay treatments.”19

— JAMA. September 14, 2011

Since the early 1980s, the Life Extension Foundation® has battled Congress and the FDA to allow Americans to import low-cost prescription drugs from Canada and Europe. Pharmaceutical lobbyists prevailed over this logic.

In retaliation, FDA made numerous attempts to destroy our organization and put me in jail.21 They did this because we led the charge to allow the importation of medications from other countries. Had it not been for pharmaceutical interests persuading the FDA to embargo imported drugs, this nation would not be facing these lethal shortages and the costs of prescription drugs would be a fraction of what they are today.

How Bad Is the Problem?

As of last summer, of 34 generic cancer drugs on the market, 14 were in short supply.22,23 These include mainstay treatments to treat leukemia, lymphoma, and testicular cancer. The President of the American Society of Clinical Oncology made it clear that doctors know how to cure the majority of these cancers, but patients are virtually helpless without access to these drugs.24

What’s happening is that oncologists are being forced to use newer brand-name drugs that don’t have a proven cure rate, but can cost 100 times more than effective generics that have fallen into short supply.

According to one source, only about 10% of drug shortages can be attributed to a lack of ingredients to manufacture the drugs.22 Most shortages are instead the consequence of corporate decisions to cease production, or caused by interruptions in production caused by problems that manufacturers do not appear to be in a rush to fix. In a free market, this would not occur, as competition would readily fill the supply gap. But with the FDA deciding who can and cannot make generic drugs, the market is fixed, and those with the right connections can easily game the system to earn enormous profits, even if it means thousands of Americans perishing.

Adding to the problem is the thoroughly corrupt Medicare Prescription Drug Act of 2003 that added enormous complexities and opportunities for pharmaceutical companies to earn extortionist profits. The creation of drug shortages to gouge consumers was an inevitable consequence of this crooked legislation.

Life Extension bitterly fought against passage of the Medicare Prescription Drug Act that will cumulatively put over $1 trillion tax/debt dollars into drug company coffers. Congress allowed pharmaceutical lobbyists to prevail over rationality and humanity in passing this corrupt act.

Unintended Consequences of Government Interference

How would you like to be laid up in a hospital, and having the only drug that might save your life come from an obscure wholesaler that could not be trusted to provide an authentic medication?

That’s what’s happening today as hospital pharmacies receive hundreds of offers from murky wholesalers offering drugs in short supply at prices that are 10 to 20 times the normal rate.

Such sales may be legal, but the shady reputations of wholesalers who often serve as outlets for counterfeit drugs may be creating the very problem that overbearing regulations were enacted to prevent.

Bureaucratic Gibberish and Shortages

The United States has the world’s highest drug prices, yet simultaneously suffers severe drug shortages. Here is one bureaucratic reason why: The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 requires Medicare to pay the drug’s average selling price, plus 6% for handling. Since it takes a long time for drug companies to compile accurate sales data and also for the government to revise the official average selling price, the result of the Medicare Prescription Drug Act is that prices are kept from increasing by more than 6% every six months. An unintended consequence of this provision of The Medicare Prescription Drug Act is that it can’t adapt quickly enough to rapid drug price changes. By way of example, within a few years after a cancer drug goes generic, its price can drop by as much as 90%. But if a shortage of the active ingredient develops, the drug’s price should be able to increase again to attract more manufacturers. Since the Medicare Prescription Drug Act limits drug price increases, it impedes free market pricing from happening, which could cause manufactures to lose money on certain drugs if their cost for the active ingredient exceeds what the government allows them to charge. This is just one bureaucratic reason for today’s shortage of lifesaving drugs.22 Congress has been debating band-aid solutions, which will inevitably create more severe problems over the longer term. One bill introduced would require generic manufacturers to notify the FDA if they expected a supply problem or planned to stop manufacturing a drug. But the FDA isn’t able to force manufacturers to produce a drug, so learning about impending shortages is of limited benefit. For instance, early warning by the FDA of a shortage of a particular cancer drug could cause oncologists to start hoarding it, thereby exacerbating the problem. The only permanent solution to the problems that collectively make up today’s health care cost crisis is to restore a free market environment to medicine—liberated from incompetent and corrupt interferences by Congress and the FDA.

I have written before about how artificially-inflated drug prices provide a strong incentive for unscrupulous individuals to counterfeit, how pervasive drug counterfeiting has become in the US, and what little the FDA does to stop it.

With the opportunity to charge up to 20 times more because of the artificial shortages caused by today’s over-regulated environment, the incentive for prescription drug counterfeiting has never been greater.

Another horrific problem with this drug shortage is that clinical trials to evaluate new drugs have been postponed because studies must also offer older medicines that cannot now be reliably provided.

Analogies with Communism

An inherent flaw of communist societies is chronic shortages of everything. Communist countries become places of constant long lines, assuming there is anything available worth standing in line for.

Be it an apartment, automobile, food, or medication, the economic inefficiencies of communism invariably results in severe shortages.

Despite the proven failure of central government control, Congress nonetheless passed numerous laws that have caused low-cost generic drugs to disappear from the marketplace.

For those who want to read some bureaucratic complexities, the box on the previous page describes one of the absurd regulations behind today’s drug shortages.

On the Front Lines Battling Corruption

We live in a world of surplus for most goods and services… with one notable exception.

Despite mediocrity and overpricing, the United States faces an unprecedented shortage of prescription medications. The culprit behind these drug shortages is the over-regulation of medicine perpetrated by our political leaders.

On September 1, 2011, my book Pharmocracy was released. The purpose in writing Pharmocracy was to expose egregious corruption and inefficiencies that are bankrupting the health care system of the United States.

Not Enough Members Are Buying Pharmocracy

Life Extension expended enormous time and money getting this book out to as many decision makers and concerned citizens as possible. One of our members even donated national airtime for multiple 30-minute airings of an interview I did that explained how important it is for citizens to revolt against a medical establishment that is bankrupting the United States.

We have only sold about 7,000 copies of Pharmocracy so far. This is disappointing because my purpose of writing this hardcover book was to enable members to purchase four copies for only $8 each and send one with a personalized letter to their representative and two senators.

The only reason I can think that more of our 170,000 members have not purchased four copies of Pharmocracy is they feared Congress would not pay attention to the irrefutable logic about how to mend today’s broken health care system.

Since 86% of Americans disapprove of how Congress is doing their job, I can understand the apathy of thinking anything can be done to make our government see logic. But that is no reason to surrender. When the free market reforms advocated in Pharmocracy are enacted, it is my firm belief that cures for most of today’s killer diseases will be rapidly brought to market at affordable prices.

I state “when” these reforms are enacted because one way or another, the free market approaches I espouse will emerge, since it is mathematically impossible for the federal government to pay for Medicare, Medicaid, and other health care programs it is currently on the hook for.

One unsettling scenario is that seniors may retain their Medicare benefits (with much higher co-pays), but few doctors will be willing to accept it because Medicare reimbursements will be substantially cut, or payments to doctors delayed.

Don’t Capitulate to Bureaucrats

When the FDA tried to destroy our organization in the late 1980s, almost every attorney we consulted with told us to shut down the Life Extension Foundation. These FDA-expert attorneys said according to the law, we were not allowed to exist. My immediate response was that we had to “change the law.” I was universally ridiculed for suggesting that our small organization had the ability to amend federal law.

On October 15, 1994, a multi-year effort to “change the law” prevailed when the United States Congress passed the Dietary Supplement Health and Education Act (DSHEA).

Pharmocracy by itself may not result in the law being changed, but it provides common sense logic to do so. The more copies of Pharmocracy that members send to their members of Congress, the closer we come to achieving liberation from the FDA’s stranglehold on medical innovation.

So I ask each of you to order four copies ($8 each) of Pharmocracy to send to your members of Congress. It is an important step in a multi-decade campaign to tear down the walls of bureaucracy that deny Americans access to more effective therapies at far lower prices.

Stay Healthy So You Don’t Need Drugs

Americans needlessly suffer and die because of today’s suffocating regulatory quagmire.

The best way to avoid becoming a victim of artificial drug shortages is to stay free of disease. Life Extension members should take comfort in knowing that the many steps they take to retain their youthful health dramatically reduces their odds of contracting serious illness.

For longer life,

William Faloon