Government Response to Drug Shortages: Federal Actions in 2025

By the end of 2024, over 277 drugs were still in short supply across the U.S.-a number that hasn’t dropped since the pandemic. Hospitals are scrambling. Pharmacists are spending hours every week tracking down alternatives. Patients are skipping doses because the medicine they need simply isn’t there. And while the federal government has rolled out new plans to fix this, the real question is: are they fixing the right problem?

What’s Really Causing Drug Shortages?

It’s not just one thing. Drug shortages happen because the system is built to be cheap, not reliable. Most of the active pharmaceutical ingredients (APIs)-the actual medicine inside the pill or injection-are made overseas, mostly in China and India. About 80% of them come from there. The U.S. relies on a handful of factories to produce critical drugs like antibiotics, anesthetics, and cancer treatments. Just five facilities make 78% of all sterile injectables. If one of them shuts down for inspection, has a power outage, or faces a supply chain hiccup, hospitals across the country feel it.

And the economics don’t make sense. These essential drugs-like saline, insulin, or chemotherapy agents-don’t make much money. Manufacturers won’t invest in backup lines or extra inventory because there’s no profit in it. Meanwhile, the FDA requires companies to report potential shortages six months in advance. But only 58% of them actually do. Small manufacturers? Only 18% comply. That means the government often finds out about a shortage after it’s already happening.

The Strategic Active Pharmaceutical Ingredients Reserve (SAPIR)

In August 2025, President Trump signed Executive Order 14178, expanding the Strategic Active Pharmaceutical Ingredients Reserve-or SAPIR. This isn’t about stockpiling finished drugs. It’s about storing the raw ingredients needed to make them. Why? Because APIs cost 40-60% less to store than finished medicines, and they last 3-5 years longer. The goal is to have enough raw materials on hand to quickly produce 26 critical drugs during a crisis.

The list includes life-saving medications: antibiotics like vancomycin, anesthetics like propofol, and oncology drugs like cisplatin. The idea sounds smart: if a factory goes down, you can just whip up more medicine from stored ingredients. But here’s the catch: only 12% of the API production needed for these drugs has been brought back to the U.S. in the last seven years. And the reserve only covers 26 drugs. Meanwhile, 98% of all shortage incidents involve drugs outside that list. Oncology drugs alone make up 31% of all shortages-but only 4% of the SAPIR list.

How the FDA Actually Handles Shortages

The FDA doesn’t just sit back and wait for shortages to happen. They work directly with manufacturers to fix problems. In 2024, they resolved 85% of reported shortages by speeding up inspections, allowing temporary imports, or giving manufacturers extra time to fix quality issues. That’s how they solved the saline shortage in 2018-2020, which affected 90% of U.S. hospitals.

They also launched the Enhanced Shortage Monitoring System in November 2025. This new tool uses AI to analyze 17 data streams-shipping logs, factory batch records, hospital purchase patterns-to predict shortages 90 days in advance with 82% accuracy. That’s a big step forward. But here’s the problem: hospitals still have to report shortages manually. And with only 58% compliance, the data is incomplete. If the system doesn’t know a shortage is coming, it can’t warn anyone.

Why Congress Is Trying to Change the Rules

Lawmakers are pushing two major bills. The first, H.R.5316, the Drug Shortage Act, would make it easier for pharmacists to use compounded versions of shortage drugs in emergencies. Right now, those alternatives are often blocked by legal and regulatory red tape. The second, the Drug Shortage Prevention and Mitigation Act, would give Medicare extra payments to hospitals that keep backup suppliers on standby.

But here’s the reality: even if these bills pass, they won’t fix the core issue. The Congressional Budget Office estimates H.R.5316 will reduce shortages by only 15-20% over five years-at a cost of $740 million. That’s less than 0.1% of total U.S. drug spending. Meanwhile, the Department of Commerce just announced $285 million in funding for new manufacturing plants under the CHIPS Act. Sounds good? Industry analysts say it covers less than 5% of the $6 billion needed to truly diversify API production.

The Real Problem: No One’s Paying for Prevention

The biggest failure isn’t a lack of technology or stockpiles. It’s a lack of economic incentive. Why would a company spend millions building a second production line for a drug that sells for $2 a vial? The market doesn’t reward reliability. It rewards low cost. And right now, the government doesn’t pay enough to change that.

Compare that to the European Union. They require member states to maintain mandatory stockpiles and use a centralized system to track shortages in real time. Between 2022 and 2024, that approach cut shortages by 37%. The U.S. doesn’t have that kind of coordination. In fact, the Government Accountability Office found that HHS has implemented only 35% of its own recommended interventions. And they still don’t have clear metrics to measure if any of this is working.

What’s Happening on the Ground

Pharmacists aren’t just managing inventory-they’re making clinical decisions under pressure. A 2025 survey by the American Society of Health-System Pharmacists found that 74% spend 10 or more hours a week tracking down drugs. Forty-one percent have seen near-miss errors because a substitute drug had different dosing or side effects.

Patients are suffering, too. A September 2025 report from Patients for Affordable Drugs found that 29% of Americans skipped doses because the drug wasn’t available. For cancer patients, that number jumps to 68%. One Reddit user described having to compound cisplatin from raw powder because the pre-made version was gone. That’s not standard practice. That’s desperation.

Hospitals are spending an average of $1.2 million a year just managing shortages. That’s not profit loss. That’s operational cost. Nurses are double-checking every substitution. Pharmacists are calling five suppliers before lunch. Clinicians are changing treatment plans on the fly. And none of it is sustainable.

The Big Miss: Why Stockpiling Isn’t Enough

The government’s focus on the SAPIR reserve feels like putting a bandage on a broken leg. It helps in emergencies, but it doesn’t heal the injury. Experts like Dr. Luciana Borio, former FDA Acting Chief Scientist, call the current approach “reactive rather than preventative.”

Here’s the truth: stockpiling APIs doesn’t solve the problem of manufacturing concentration. It doesn’t fix the 28-36 month FDA approval timeline for new U.S. facilities (compared to 18-24 months in the EU). It doesn’t fix the fact that three companies control 68% of the sterile injectable market. And it doesn’t fix the $5.2 billion annual cost of shortages to the healthcare system.

The FDA’s own leaked review admitted the current strategy will prevent only 15-20% of projected shortages over the next three years. The real solution? Encourage second-source manufacturers. Reduce approval delays. Pay hospitals and pharmacies to keep backup suppliers. Fund research into continuous manufacturing-technology that can turn out a batch of medicine in days instead of months.

What’s Next?

The FDA has started expedited reviews for second-source manufacturers. Fourteen applications are already in process. If approved, they could add redundancy for eight critical drugs by mid-2026. That’s progress. But it’s not a system. It’s a patch.

The 2025-2028 HHS Draft Action Plan talks about coordinating, assessing, responding, and preventing. But without funding, without enforcement, and without changing the economic model, these goals are just words on a page. The government can stockpile ingredients. It can predict shortages with AI. It can even pass laws. But until someone pays for the infrastructure that prevents shortages in the first place, the cycle will keep repeating.

Patients shouldn’t have to wonder if their next dose will arrive. Doctors shouldn’t have to guess which drug will be available next week. And pharmacists shouldn’t be forced to become supply chain detectives. The federal government has tools. It has data. It has plans. But it still hasn’t chosen to make drug availability a priority-not just during a crisis, but every day.