Government Response to Drug Shortages: Federal Actions in 2025

By the end of 2024, more than 277 drugs were still in short supply across the United States. That’s not a glitch. It’s a system failure. Hospitals are rationing antibiotics. Cancer centers are delaying chemotherapy. Emergency rooms are scrambling to find substitutes for basic anesthetics. And behind every shortage is a chain of decisions-some made in Congress, some in federal agencies, some in corporate boardrooms-that have left the country dangerously exposed.

What’s Really Causing the Shortages?

It’s easy to blame bad luck or global supply chain issues. But the real problem is structural. Nearly 80% of the active pharmaceutical ingredients (APIs) used in U.S. medications come from just two countries: China and India. These ingredients are the raw building blocks of drugs-like the flour in bread. Without them, no pill, injection, or IV bag can be made.

Even worse, production is concentrated. Just five facilities in the U.S. make 78% of all sterile injectables-drugs given directly into the bloodstream. One factory breaks down, and suddenly hospitals can’t get life-saving antibiotics or heart medications. The FDA says 85% of shortages are resolved through regulatory fixes-like fast-tracking imports or giving manufacturers extra time to fix problems. But those are band-aids. They don’t fix the broken foundation.

The Strategic Active Pharmaceutical Ingredients Reserve (SAPIR)

In August 2025, President Trump signed Executive Order 14178, expanding the Strategic Active Pharmaceutical Ingredients Reserve-known as SAPIR. This program doesn’t stockpile finished drugs. It stockspile the raw ingredients needed to make them. Why? Because APIs last 3 to 5 years longer than pills or injections, and they cost 40-60% less to store.

SAPIR targets 26 essential medicines: antibiotics like vancomycin, anesthetics like propofol, and oncology drugs like cisplatin. The goal is to have enough raw material on hand to keep production going for at least six months if a foreign supplier cuts off access.

The theory makes sense. But here’s the catch: only 12% of critical API production has been brought back to the U.S. since federal efforts began in 2020. And SAPIR’s 26-drug list covers less than 5% of the total drugs that have gone short in the past five years. The FDA’s own data shows that oncology drugs-which made up 31% of all shortages in 2024-are barely represented in SAPIR. Meanwhile, hundreds of other essential drugs, like insulin and dialysis solutions, aren’t even on the radar.

How the FDA Is Trying to Fix the System

The FDA runs the Drug Shortage Database, a public tool that tracks every reported shortage. As of November 2025, it lists 1,247 drugs that have had shortages since 2012. Manufacturers are legally required to report potential shortages six months in advance. But only 58% actually do.

Small manufacturers-those with fewer than 50 employees-are the worst offenders. Eighty-two percent don’t report at all. Why? Because reporting triggers inspections, delays, and scrutiny. Many can’t afford the paperwork. The FDA has issued only 17 warning letters for non-reporting since 2020. In the European Union, under similar rules, they issued 142.

To improve early detection, the FDA launched its Enhanced Shortage Monitoring System in November 2025. It uses artificial intelligence to track shipping data, hospital purchasing trends, and manufacturing batch records. So far, it predicts shortages with 82% accuracy-up to 90 days ahead. That’s a breakthrough. But unless hospitals and pharmacies actually use the alerts, it won’t matter.

Why Congress Is Stuck

Two major bills are sitting in Congress right now: H.R.5316, the Drug Shortage Act, and the bipartisan Drug Shortage Prevention and Mitigation Act. The first would let pharmacists use compounded versions of shortage drugs without waiting for full FDA approval. The second would give Medicare bonus payments to hospitals that keep backup suppliers ready.

The Congressional Budget Office estimates H.R.5316 would reduce shortages by 15-20% over five years-at a cost of $740 million. That sounds like a bargain. But total U.S. drug spending is over $1.3 trillion a year. This is less than 0.1% of that.

Meanwhile, funding for key agencies is shrinking. The Biomedical Advanced Research and Development Authority (BARDA), which helped develop new manufacturing tech, got a 22% budget cut in the 2026 HHS proposal. FEMA’s emergency response funds were slashed by $1.2 billion. State public health grants dropped by $850 million. You can’t build resilience if you’re pulling the plug on the tools that make it possible.

The Real Cost: Hospitals, Pharmacists, and Patients

Hospitals are spending an average of $1.2 million a year just managing drug shortages. That’s not for new equipment or staff-it’s for overtime, emergency purchases, and clinical workarounds. Sixty-eight percent of hospitals report treatment delays. Forty-two percent say patients have gotten the wrong drug because of substitutions.

Pharmacists are drowning. The American Society of Health-System Pharmacists found that 74% spend 10 or more hours a week tracking down drugs. One pharmacist on Reddit said they used five different brands of the same antibiotic in a single week. Another had to compound cisplatin from scratch because the FDA-approved version was gone.

Patients are paying the price too. Nearly 30% of Americans have skipped doses because a drug wasn’t available-not because they couldn’t afford it, but because it simply didn’t exist on the shelf. Among cancer patients, two out of three have had their treatment changed or delayed due to shortages, according to the National Comprehensive Cancer Network.

What’s Missing: Economic Incentives

Here’s the truth no one wants to say out loud: no company will invest millions to make a drug that earns $0.50 a dose. Sterile injectables-the most common type of shortage-have razor-thin margins. Companies make more money selling a new $10,000 cancer drug than they do selling 100,000 doses of saline solution.

The FDA approved 56 new manufacturing facilities in 2024. But 42% of them were overseas-in Ireland, Singapore, and other countries with faster approvals and lower costs. In the U.S., it takes 28-36 months to get a new API plant approved. In the EU, it’s 18-24 months.

The only way to fix this is to pay companies to make the drugs we need, not just the ones that make the most profit. That means government contracts, guaranteed minimum purchases, or tax credits tied to producing low-margin essentials. So far, no federal policy has done that.

Where Do We Go From Here?

The SAPIR reserve is a good start. The AI-powered monitoring system is smart. But without real investment in domestic manufacturing, without mandatory reporting, without financial incentives for low-profit drugs-we’re just rearranging deck chairs on the Titanic.

The EU reduced shortages by 37% between 2022 and 2024 by requiring member states to keep mandatory stockpiles and creating a centralized tracking system. The U.S. could do the same. But it would require political will-and a willingness to spend money before the crisis hits.

Right now, the system is built to react, not prevent. And every time a hospital runs out of antibiotics, another patient risks infection. Another cancer patient waits. Another life is put on hold.

The tools to fix this exist. The data is clear. The cost of doing nothing? Higher than anyone admits.