Stephanie Scanlan learned the shocking shortages of essential chemotherapy drugs this spring. Two of the three drugs normally used to treat her rare bone cancer were too rare. She would have to move on without them.
Ms. Scanlan, 56, head of a busy state office in Tallahassee, Florida, had sought the drugs for months as the cancer spread from her wrist to her rib to her spine. In the summer it became clear that her left wrist and hand would have to be amputated.
“I’m scared to death,” she said as she faced the operation. “This is America. Why do we have to choose who to save?”
The disruption in the supply of key chemotherapy drugs this year has highlighted the worst fears of patients – and the wider health system – as some people with aggressive cancers have been unable to get the treatment they need.
These drugs and hundreds of other generics, including amoxicillin to treat infections and fentanyl to relieve pain during surgery, remain in short supply. But the deepening crisis has not fostered solutions to improve the supply of generic drugs, which account for 90 percent of prescriptions in the United States.
Dr. Food and Drug Administration Commissioner Robert Califf has outlined changes the agency could make to improve the situation. But he said the root of the problem lies “in economic factors that we cannot control.”
“They are outside the purview of the FDA,” he said.
Sen. Ron Wyden, an Oregon Democrat and chairman of the Senate Finance Committee, agreed. “A significant portion of this market failure is due to the consolidation of generic drug purchasing by a small group of very powerful health care middlemen,” he said at a hearing this month.
In interviews, more than a dozen current and former generic drug industry executives described many risks that prevent a company from increasing production to ease shortages.
They said prices had been pushed so low that manufacturing life-saving drugs could lead to bankruptcy. It's a system in which more than 200 generic drug manufacturers compete, sometimes fiercely, for contracts with three middlemen who guard the door to a large number of customers.
In some cases, generic drug manufacturers offer rock-bottom prices to edge out competition for desirable offerings. In other cases, the intermediaries – so-called group purchasing organizations – demand lower prices days after signing a contract with a drugmaker.
The downward pressure on prices – undoubtedly often a boon to the wallets of patients and taxpayers – is enormous. Group buyers compete with each other to provide hospitals with the lowest priced products, which middlemen say also benefits consumers. They receive fees from drug manufacturers based on the volume of drugs purchased by hospitals.
“The business model is broken,” said George Zorich, a pharmacist and retired generic drug industry executive. “It’s great for GPOs. Not great for drug companies, in some cases not great for patients.”
Many doctors wish they could do more to give cancer patients the medications they need.
“Every clinician I know would be thrilled to spend more money for a reliable supply of a quality drug,” said Dr. Andrew Shuman, an oncology surgeon at the University of Michigan and an expert on drug shortages.
In a speech to drug brokers last month, Dr. Califf urged them to “pay more,” saying it would improve access to medical products and would be “good for business.”
Prices for two of the three drugs initially offered to Ms. Scanlan to treat her cancer have fallen in recent years. During these years, Intas Pharmaceuticals, a generic drug giant in India, steadily gained market share while other companies withdrew, according to data from US Pharmacopeia, a nonprofit that tracks drug shortages.
But the company had to halt U.S. production to resolve quality problems that the FDA cited after a surprise inspection of one of its sprawling plants in India. Inspectors had found quality control workers shredding and throwing acid on important records. The production halt triggered a nationwide supply shock in February.
Nearly all major cancer centers in the U.S. reported in surveys that they struggled with chemotherapy shortages last spring and summer. A survey released in August found that nearly 60 percent of more than 1,000 pharmacy respondents believed shortages of chemotherapy drugs were “critically important.”
Intas recently resumed production, but the FDA still lists the drugs as in short supply. Major cancer centers report that shortages are easing, although concerns remain about stocks in rural areas.
The scarce drugs are cheap and vital and revolutionized their field decades ago by curing some patients with testicular, lung, ovarian, pancreatic and breast cancer for the first time, oncologists say.
Ms. Scanlan's cancer, called osteosarcoma, was considered curable in about 65 percent of patients after cisplatin was added to the cocktail regimen in the 1970s.
Ms. Scanlan's medical records provide information about her care. For spring and summer treatment, she received just one infusion of a sister drug, carboplatin, at the University of Florida Shands Hospital in Gainesville in March.
As the months passed, Ms. Scanlan's cancer spread deeper into her bones. She was referred to Tallahassee Memorial Hospital, which treated her with a chemotherapy drug due to shortages. The center then referred Ms. Scanlan to Mayo Clinic's Jacksonville location in April, her medical records show.
But even in Florida's gleaming outpost of the elite medical system, Ms. Scanlan couldn't receive her chemotherapy.
She faced surgery in May but might have been eligible for a repair to her wrist instead of an amputation. In the notes of her oncology surgeon from Mayo, Dr. Courtney Sherman said in her filing that it depended on how Ms. Scanlan responded to treatment, although “she is not receiving standard chemotherapy due to the shortage.”
In May and June, both Ms. Scanlan and Dr. Sherman Dr. Steven Attia, an oncologist from Mayo, to order the infusions. Ms. Scanlan sent Dr. Attia emailed: “One question: Doesn’t Mayo have the chemotherapy I actually need?”
Dr. Attia declined requests for comment. Samiha Khanna, a Mayo spokeswoman, denied that there was a shortage of cancer drugs at the Jacksonville site and confirmed that Mayo did not give Ms. Scanlan chemotherapy. Ms. Khanna also referred questions back to Tallahassee Memorial.
A changed market
Jeff Herzfeld, a pharmacist and former generics executive who works as a consultant, has seen the generics industry transform from a modestly profitable area to a cutthroat one over the course of his career.
At first it seemed like no one in the generic drug industry was making big profits. As drug patents expired, companies entered the market and attracted customers by offering low prices.
But around 15 years ago the customer base began to shrink. Middlemen realized they could organize hospitals to leverage their mass purchasing power to get even lower prices.
These intermediaries, or GPOs, charged fees to drug manufacturers who had access to a large pool of customers. The GPOs competed with each other for hospital customers, luring them with the lowest prices.
Competition intensified as generic drug makers vied for every big deal and emerged victorious if they got the lowest price. “They took a winner-takes-all approach,” Dr. Heart field.
Large deals also came with strict contractual conditions. The GPOs were allowed to return to the generic drug maker a few days after a deal with an ultimatum: lower the price even further or lose the contract. It could happen repeatedly. “There’s not a lot of room for error,” said Dr. Heart field.
Generic drug executives said common contract terms prevented them from helping out with a shortage. If they do not deliver promised medication, they face heavy fines. However, if they produce more drugs than hospitals buy, there will be a hole in their balance sheet.
These routine contractual clauses really “penalize or penalize” generic drug makers, said David Gaugh of the Association for Accessible Medicines, which represents the generic drug industry.
Todd Ebert, president of the Healthcare Supply Chain Association, which represents GPOs, disputed those views, arguing that some generic drug makers were offering very low “predatory” prices to drive competitors out of business.
Without knowing the cost of producing the drugs, companies can't be sure whether a price is a bargain — or a tactic to hinder competition, he said. Vizient, a large corporate buyer, referred comment to Mr. Ebert.
Jessica Daley, vice president of supply chain at Premier, a leading drug purchasing company, said the company is committed to promoting healthy markets and wants “reasonable prices that support security of supply and protect patient care.”
Aside from group buyer terms, generic drug makers also point to other costs they face, including a long list of fees they pay to companies that supply drugs from drug factories to hospitals.
The current drug shortage has highlighted the pressure on the generics market, and the shortage of cancer treatments has put the spotlight on Intas Pharmaceuticals' struggling growth in India. This resulted in two courses of chemotherapy that Ms. Scanlan was to receive early on.
Market share for one of the drugs, methotrexate, which is also used for childhood cancers and rheumatoid arthritis, grew to 35 percent last year from about 7 percent in 2018, according to US Pharmacopeia. The data shows that the price per dose has also fallen from about $25 in 2018 to $20 in 2022.
During these years, prices for carboplatin and cisplatin also fell, falling to $15 per dose. Intas' market share grew, particularly in cisplatin, from 24 percent in 2018 to 62 percent of U.S. supply in 2022.
Not a “first world nation”
Dr. Julie Gralow, chief medical officer of the American Society of Clinical Oncology, spotted signs of stockpiling at some health systems as early as February, when the FDA first announced the shortage, while shelves at other health centers were empty.
“We call it maldistribution depending on who has access – who can afford to build a small supply at their location,” Dr. Gralow.
Until May, her group and others relied on established principles of bioethics to help cancer centers decide which patients should receive scarce treatments, favoring patients with a chance of a cure over those who could stave off death. Dr. Gralow said researchers have begun studying whether the chemo shortages affect patient survival. Results could take years.
The emotional impact was very different. Some people with cancer are too focused on paying rent or feeding their families to fight for much-needed medications, said Danielle Saff, a social worker at CancerCare, a nonprofit that supports patients.
Others, like Lucia Buttaro, 60, a professor at Fordham University, were angry. Because of a recurrence of ovarian cancer in May or June, she did not receive her prescribed carboplatin, even though the cancer had spread to her lungs.
“In my opinion, we don’t qualify as a first world nation if you don’t get what you need,” she said.
In Ms. Scanlan's case in Florida, it remains unclear whether the deficiency played a role because her cancer was rare, invasive and rapidly progressing.
Still, cancer experts raised concerns that she had not received standard chemotherapy cocktail regimens before her amputation in September.
The failure to use the three generic “modern miracle” chemotherapies in osteosarcoma patients “is a real problem,” Dr. Lee Cranmer, a sarcoma expert at the Fred Hutch Cancer Center in Seattle who was not involved in Ms. Scanlan's treatment.
She has since been irradiated. Last month, she learned that the cancer in her rib and spine had stopped spreading. Although her new care team at Moffitt Cancer Center in Tampa recently recommended palliative care, she said she feels defeated and scared.
The shortages were taking their toll, she said, adding: “I can't help but think about what if something different happened from the start.”
Ellen Gabler contributed reporting.