A couple of days ago, the New York Times published a story about the shortage of amphetamine-based Adderall, a popular prescription drug for treatment of ADHD (attention deficit hypersensitivity disorder). The overall supply of the drug, which includes both the brand name and generic forms, has been in widespread shortage as manufacturing quotas have been reduced by the DEA (Drug Enforcement Administration) in response to black market abuse of the drug. Unfortunately, the response has severely limited supplies for even people with legitimate prescriptions and the small supplies that are available are often of the much more expensive name-brand versions and not the generics despite the same companies making both versions of the drugs. The shortage has affected the market for another stimulant, the methylphenidate-based Ritalin, where a similar situation is unfolding.
The issue here is not that the DEA is trying to combat abuse, but that the situation clearly favors the drug companies while hurting legitimate consumers and arguably not impacting black market demand. In allowing the manufacturers to determine the ratio between generics and brand name production, yet restricting the supply, the manufacturers are naturally inclined to change the brand production vs. generic production ratio to what is most profitable. Unfortunately, this has led to an especially large shortage in the much cheaper generic versions of these drugs, leaving the most cash-strapped with fewer options. As the article states, things have gotten to the point where the FDA has even asked the DEA to consider expanding the supply, to which the DEA has answered that supplies are okay due to existing brand name stock.
Clearly there are a few problems here and a lot of it centers around the unintended consequences of the DEA’s questionable policy. The virtual elimination of the generic supply of Adderall and Ritalin has left many prescription-holding patients simply going without the drug if they cannot afford it or take it. Meanwhile, manufacturers are making record profits on the drugs, suggesting that the limited supply might be in a sense giving them more pricing power in the market. At the same time, the effect on actual black market use is debatable.
Even at co-pays of ~$200 for brand-name Adderall or Ritalin, the cost per pill is still likely much lower than the per pill cost on the black market. And although I have not seen the numbers, I can say from first-hand observation that there is still rampant amphetamine abuse amongst college students, especially during final exams (including in this past Fall 2011 semester). I can also say from the prices I have heard that the per pill cost in colleges might easily be over the per pill cost of a $200 prescription given an average prescription quantity. It would not be far-fetched that those abusing the system by using their legitimate prescriptions to buy these drugs and subsequently selling them at much higher rates in the black market still buy the brand name drug after the supply restrictions because either way they can still make a profit. It ends up being the people that really need the drug, especially those who both need it and cannot afford brand name prices that get hurt. A lot of speculation on my part, sure, but they are points to consider.