Drug shortages remain a persistent challenge in both the United States and Germany. While the two countries rely on different pricing models, both are experiencing increasing supply disruptions.
In Germany, strict price regulation keeps reimbursement levels low, putting pressure on manufacturers. In the U.S., the absence of such regulation allows higher prices overall, but market dynamics still discourage the production of low-margin drugs.
These dynamics create a "price-squeezed system" where both countries experience supply vulnerabilities, though Germany's regulated low prices amplify risks for essential medicines.
Price Regulation's Impact on Shortages
In Germany, price controls linked to reference pricing under the AMNOG system often lead to unsustainably low reimbursement levels, especially for generic medicines. This can reduce profitability for manufacturers, discouraging investment in production, and, in some cases, leading to the withdrawal of certain products from the market.
In contrast, the U.S. does not impose strict price controls. However, shortages still occur, often driven by manufacturing disruptions, quality compliance issues, or dependence on a limited number of suppliers. Low margins in the generic segment also continue to deter new market entrants.
Between 2016 and 2023, shortages increased in both countries, with a more pronounced rise observed in Germany, partly due to sustained pricing pressure.
US Shortages' Reach to Europe
Global pharmaceutical supply chains closely connect the U.S. and European markets. Many medicines depend on shared suppliers, particularly for active pharmaceutical ingredients (APIs) produced in India and China.
As a result, disruptions in the U.S., especially in areas such as sterile injectables, can have ripple effects in Europe, including Germany. Raw material shortages or manufacturing issues in Asia can simultaneously impact both regions.
In addition, pharmaceutical companies often prioritize higher-margin markets like the U.S., which can delay or limit supply to European countries. Recent trade tensions have further strained these global supply chains, increasing the risk of shortages.
Shortage Patterns in US and Germany
Germany, Europe's largest pharma market, saw 452 distinct active substances short between 2016-2023, compared to 403 in the U.S., with 156 overlapping between the two countries (22.3%).
However, shortages in the U.S. tend to last longer on average (23.5 months compared to 9.2 months in Germany). Both countries also show seasonal patterns, with shortages typically peaking in late spring.
In Germany, shortages most frequently affect drugs for the nervous system, followed by treatments for infectious diseases and oncology. The U.S. shows a similar pattern, with a stronger emphasis on metabolic disorders.
Recurring shortages are common in both systems, affecting around half of medicines in Germany and about one-third in the U.S.
Most Vulnerable Drugs: Generics
Generic medicines account for the majority of shortages in both countries. Their low prices, combined with thin profit margins and reliance on a limited number of global manufacturers, make them particularly vulnerable to supply disruptions.
Even relatively small issues, such as raw material shortages or production delays, can lead to significant supply gaps. This is especially true when sourcing depends heavily on countries like China.
Examples include epinephrine, which has faced prolonged shortages in the U.S. and shorter but recurring shortages in Germany, and methotrexate, which has experienced repeated disruptions in both markets.
In Germany, shortages of generics used for chronic conditions, such as valproate for epilepsy, occur frequently. In the U.S., challenges are particularly evident in sterile injectables, where production is highly concentrated. These low-price drugs lack incentives for redundancy, making them fragile lifelines in intertwined systems.
A price-squeezed system
Despite their structural differences, both the U.S. and Germany illustrate how pricing pressures can contribute to supply vulnerabilities.
In Germany, low regulated prices can make production economically unsustainable for some medicines. In the U.S., market-based pricing allows higher prices overall, but does not necessarily ensure stable supply for low-margin generics.
This creates a shared challenge: ensuring reliable access to essential medicines in systems where financial incentives for their production remain limited.
Ultimately, generics serve as critical components of healthcare systems—but under current conditions, they remain fragile lifelines in both the U.S. and Europe.
Sources
1. Nussli E, Serra-Burriel M, Vokinger KN. Comparative Analysis of Drug Shortages in the US and Germany (2016 – 2023). Journal of Law, Medicine & Ethics, October 2024, available at: https://www.cambridge.org/core/journals/journal-of-law-medicine-and-ethics/article/comparative-analysis-of-drug-shortages-in-the-us-and-germany-2016-2023/A59B8B3E072FD928626F1D26F5610CAD
2. Association for Accessible Medicines, U.S. Patients Rely On Generic Medicines But Increases In Drug Shortages Reflect Challenges To Their Long-Term Sustainability, June 2023, available at: https://accessiblemeds.org/resources/blog/generic-medicines-drug-shortages-challenges-sustainability/
3. Castellana E, Chiappetta MR. The Impact of U.S. Tariffs on the Pharmaceutical Industry and Medicine Access in Europe: Challenges, Opportunities, and Future Outlook. Hosp Pharm., November 2025, available at: https://pmc.ncbi.nlm.nih.gov/articles/PMC12602281/
4. Deutsche Welle, What's behind medication shortages in Germany?, October 2024, available at: https://www.dw.com/en/whats-behind-medication-shortages-in-germany/a-70446933
5. Universität Bremen, The danger that the shortages will become worse is growing, March 2020, available at: https://up2date.uni-bremen.de/en/article/the-danger-that-the-shortages-will-become-worse-is-growing
