Why medicine shortages happen

A medicine shortage occurs when the demand for a specific pharmaceutical product exceeds the available supply. This can range from a patient being unable to fill a routine prescription at their local pharmacy to a hospital running out of critical anaesthetic medicines. Shortages are rarely caused by a single event. Instead, they are complex, multifactorial disruptions that trace back to how medicines are manufactured, bought, and regulated globally. Understanding why these shortages happen requires looking at the hidden mechanics of the global pharmaceutical supply chain, from the sourcing of raw ingredients to the economic realities of producing older, low-cost drugs.

While supply chain disruptions can affect any therapeutic area, they are most acutely felt when they involve medicines deemed essential by the World Health Organization (WHO). When a shortage occurs, healthcare providers must often spend considerable time finding alternative treatments, which can complicate patient care and drive up health system costs.

API supply chains and concentrated manufacturing

Most medicines contain an active pharmaceutical ingredient (API), which is the chemical compound responsible for the therapeutic effect of the drug. Over the past few decades, the global manufacturing of APIs has become highly concentrated. A large proportion of the world's API supply is now produced in just a few countries, primarily India and China, where manufacturing costs are lower. Beyond APIs, the final manufacturing of the actual medicine—turning the API into a tablet or vial—often relies on a very small number of facilities.

It is common for only two or three factories worldwide to produce the entire global supply of a specific, essential medicine. Because manufacturing is so concentrated, the system is vulnerable to single points of failure. If a major factory experiences a fire, a natural disaster, or a mechanical breakdown, the global supply of that medicine can drop dramatically overnight, triggering an immediate shortage that can take months to resolve.

The economics of old, cheap medicines

Shortages are not limited to new, complex, or expensive drugs; they frequently affect older, inexpensive generic medicines that have been used safely for decades. These established medicines are often sold at very low prices, particularly in markets with strong price controls. Consequently, profit margins for manufacturers are extremely thin. If the cost of raw materials increases, or if a factory requires expensive upgrades to meet new environmental or safety standards, producing the medicine may become economically unviable.

In these cases, manufacturers may simply decide to stop making the drug. Because these older medicines are cheap and generate little profit, there is rarely a financial incentive for new manufacturers to enter the market and fill the gap. The result is a fragile supply chain where the exit of just one manufacturer can cause a global shortage of a vital, life-saving medicine. This dynamic is a major concern for global health systems, as it frequently affects basic drugs used to treat common infections, pain, and chronic conditions.

Quality issues and regulatory action

Sometimes, a shortage happens because regulatory systems are working exactly as intended to protect patients. Medicine regulators, such as the South African Health Products Regulatory Authority (SAHPRA) or the US Food and Drug Administration (FDA), routinely inspect manufacturing facilities to ensure they meet strict quality and safety standards. If an inspection reveals a serious quality issue—such as contamination or poor record-keeping—the regulator may require the manufacturer to halt production until the problem is fixed.

While this prevents substandard medicines from reaching patients, it also removes that manufacturer's products from the market. Because alternative sources are limited due to concentrated manufacturing, resolving these quality issues and restarting production can take months, extending the duration of the shortage. Regulators must balance the immediate risk of a shortage against the severe risk of distributing unsafe or ineffective medicines.

Mitigation strategies and system resilience

Addressing medicine shortages requires coordinated action from governments, regulators, and manufacturers. Many regulators now require pharmaceutical companies to notify them in advance if a medicine is going to be discontinued or if production will pause. This early warning system allows regulators and health departments to seek alternative suppliers, expedite the approval of new manufacturing lines, or temporarily import equivalent medicines from other countries.

In South Africa, SAHPRA monitors the supply of essential medicines and works with the National Department of Health to manage potential shortages, ensuring that solutions align with local pricing frameworks like the Single Exit Price. For healthcare providers and patients looking for alternative registered products during a shortage, tools like HealthSA can be used to verify the registration status of other brands or generics available on the market. Globally, organisations like the WHO track these disruptions to identify which essential medicines require stronger, more resilient supply chains in the future.