By John Murphy, President and CEO, Association for Accessible Medicines
There is a temptation, when looking at new data on drug shortages, to focus on the headline that sounds like good news. And there is a headline worth noting: according to the 2025 USP Annual Drug Shortages Report, the total number of drug shortages declined for the second consecutive year, falling 23% from 98 in 2024 to 75 in 2025.
That is progress. Our member companies work every day to keep medicines on pharmacy shelves, and any reduction in shortage numbers reflects real effort by real people. But if you stop at that headline, you are missing the story – and the story is sobering.
Shortages Are Lasting Longer Than Ever
The decline in the raw number of shortages masks a more troubling reality: the medicines that remain in shortage are staying there longer. Much longer.
The average duration of a current drug shortage is now 5.3 years. This is up from 4.3 years in 2024 and more than double the approximately two-year average seen in 2019. Nearly two-thirds of drugs currently in shortage have been unavailable for more than three years. Thirty-nine percent have been in shortage for more than five years.
Read that again: 39% of drugs in shortage have been inaccessible to patients for over five years. These are not blips or disruptions. These are structural failures. As USP’s own report characterizes them, the problems are systemic.
The Economics Tell the Story
Why do shortages persist for years on end? The USP data points to the same answer that AAM has long highlighted: the pricing environment for many generic medicines has become untenable.
Among the 12 oral solid drug products in shortage last year, 83% were priced below $6 per unit, with 42% below $2 and 25% below $1. Among the 51 injectable drugs in shortage, 73% were priced below $15 per unit and nearly half were below $5. To put that in sharper relief: the average price of a generic injectable not in shortage was $169, compared to just $20 for one that was in shortage. For oral solid generics, the gap was $8 versus $3.
When a medicine earns $3 per unit, there is little room to absorb the cost of additional manufacturing capacity, supply chain redundancy, or the investments required to keep production running smoothly over the long term. Markets that do not adequately reward manufacturers cannot sustain the supply those markets need.
The discontinuation data underscores this dynamic. Drug product discontinuations increased 60% in 2025, rising from 106 in 2024 to 170, the highest number since December 2019. While discontinuations can reflect ordinary business decisions like portfolio changes, USP is clear that manufacturers typically stop producing medicines when unfavorable market conditions reduce incentives to remain in or enter the market. When 65% of discontinued oral solid medicines were priced below $1 per unit, and their median price fell 78%, from $1.80 to just 40 cents, the economics speak for themselves.
USP’s findings echo data published in AAM’s annual analysis of market dynamics, The U.S. Generic & Biosimilars Savings Report 2025, which is compiled with our partners at IQVIA. This year’s Savings Report shows that price deflation is more rapid and prices bottom out lower for more recent patent expiries compared to nearly 30 years ago. This threatens the ongoing sustainability of the industry to provide for patient demand. Compared to international markets, the U.S. has a greater shortage problem, due to PBM purchasing power and lower reimbursement for generic drugs compared to other countries, which results in differences in profit margins between various generic markets.
A Geographic Vulnerability We Cannot Ignore
The USP report also highlights a supply chain challenge that demands serious policy attention. Of the 75 drugs in shortage last year, 33, or 44%, rely on at least one key starting material produced exclusively in a single country. Six drugs in shortage depend entirely on materials from one country.
This concentration of supply is a vulnerability. Whether the disruption comes from geopolitical tensions, trade policy shifts, or natural disasters, over-reliance on any single source for critical medicines puts patients at risk. Generic manufacturers want to invest in supply chain diversification, but doing so requires the kind of sustainable economics that the current market does not always provide.
Progress Without Policy Change Is Not Enough
The 23% decline in shortage numbers is real, and we should not dismiss it. But the trends within that number – shortages lasting more than five years on average, discontinuations at a six-year high, prices that cannot support long-term manufacturing investment – tell us that we are not solving the underlying problem. We are managing its symptoms.
The path forward requires policymakers, purchasers, and the entire health care system to grapple honestly with what it costs to reliably produce safe, affordable medicines. AAM and our members are committed to being part of that conversation and to advocating for the market reforms that will give generic manufacturers the ability to invest in the resilience patients deserve.
The data is clear. The problem is systemic. The time to act is now.
John Murphy is President and CEO of the Association for Accessible Medicines, the trade association representing manufacturers and distributors of generic and biosimilar medicines.
