Kim,

Thanks for raising this interesting topic. The current drug shortage for old cancer drugs may be due to:

1. Unattractive prices
2. Demand and volume not sufficient to justify investment in a modern GMP plant in the US
3. Very high insurance premium for plant staff working with carcinogens
4. Difficult to raise prices for older drugs
5. Investment unlikely to offer an attractive ROI.
6. Higher toxicity and lack of specificity of older cancer drugs result in higher rates of Adverse drug reactions
7. Drug Injury Lawsuits, Class Action lawsuits Drug injury litigation, Jury awards and Punitive awards has oncology drug manufacturers running away from the US.
8. Record high platinum prices makes the production of platinum drugs at old prices as a loss making operation.

Who wants to invest in a modern plant facility costing 400 million dollars, plant is never going to be fully utilized due to sporadic demand. The drug is sold at generic prices for few cents a tablet and drug injury litigation may result in hundreds of millions of awards to patient.

Kim,

FDA needs more resources and to do its job and insure the same Quality standards in plants (exporting to the US) all over the world. No one wants to take an adulterated, expired or poor quality drug even at low price or free. The late 90s exodus of the vaccine manufacturers from the US and their return after 2003 is a good case study. As in the case of vaccines:

The US government can declare manufacturing of cancer drugs as of National strategic importance, offer incentives, tax breaks and R&D grants. A tax on each box of cancer drug sold in the US can help set up a compensation fund. A special Cancer court to deal with product injury lawsuits and litigation and determine the amount to compensate persons harmed by these drugs.
Manufacturers of FDA inspected plants and FDA approved drugs will be protected from product injury litigation. Advance Purchase Orders at reasonable prices and volumes can help the industry plan the plant operation and production.

I think from a business viewpoint, there is no justification in setting up a modern GMP manufacturing facility costing hundreds of millions with high operating and liability insurance costs. This plant will never be fully utilized and produce older drugs at generic prices, unlikely to recover investment and costs.

Merck has announced setting up of a manufacturing facility in Singapore with an investment of 1 billion dollars. It does not say that the local Government has offered it attractive tax breaks, R&D credit, free land, interest free loan and other incentives estimated to be worth 300-500 million. The small population of Singapore is unlikely to utilize all the drugs produced, the output is destined for most probably for exports to the US?