The Harsh Truths Behind America’s Never-Ending Anesthetic Drug Supply Crisis

Imagine living in a country where the most widely used anesthetic drug in medicine is chronically in short supply, and has been for the past 17 years. In 2009, anesthesiologists in the US started having trouble obtaining the sedative Propofol, the most popular anesthetic globally because it works fast and wears off quickly, making it ideal for situations where a patient admitted to the hospital is released on the same day. 

Due to various industry forces, the shortage of Propofol the US faced in 2009 is showing no signs of letting up, and is now being felt globally as well. In 2021, the U.S. Food and Drug Administration (FDA) reported that manufacturers were unable to meet demand for 274 anaesthetic drug doses, due to increased demand during the COVID-19 pandemic. Anesthetics were needed during COVID-19 so patients could be given assisted breathing without discomfort. This exacerbated shortages in a field already severely affected by supply constraints normally. Surprisingly enough, the FDA’s 2021 report found increased demand was the biggest cause of an anesthetics shortage, at any time. Below is a chart from the report, listing the percent of a drug shortage a cause is responsible for. Demand increase accounted for 41% of total dose shortages in anesthetics, beating the second cause by 10%.

The above chart shows “Other/no reason provided” and “Manufacturing delay” are the next two biggest causes for an anesthetic shortage at any one time. Below, we examine what market forces are making these anesthetic drug shortages chronic, and if there is a way the U.S. can remedy the situation. 

According to the Journal of Medicine, Surgery, and Public Health, the high demand driving chronic anesthetic drug shortages is only going to get worse. In 2024, an article published in the journal stated how by 2030, the number of US residents aged 65 and older is expected to increase by 55%, and the number of people 75 and older will grow by 73%, increasing the need for surgical procedures. Couple that with procedures growing more complex, and this brings greater demand for anesthetics to ensure success. An increase in outpatient surgery centers is the final market force fueling chronic high anesthetic demand. They offer patients a less expensive and more convenient option than traditional hospitals, and have become a popular location to have procedures done. 

We now understand the reasons behind the biggest culprit in the chronic anesthetics shortage, high demand. In answering the reasons behind the shortages “Other/no reason” and “Manufacturing delay”, we find out why the US can’t manufacture its own anesthetics. 

Causes of anesthetic manufacturing delays are global and domestic. US pharmaceutical companies rely mostly on active pharmaceutical ingredients(APIs) from China and India, which makes key ingredients susceptible to resource scarcity. Additionally, geopolitical instability due to the wars in Ukraine and the Middle East has caused significant global supply chain issues(e.g. The Strait of Hormuz) and have caused production delays. In the US, failed compliance with the FDA’s good manufacturing practices has led to notable delays. In 2010, Hospira, Inc. closed its Propofol manufacturing plant in North Carolina to address quality assurance and regulatory issues found during FDA inspections. This led to the plant remaining closed for most of the next few years.

According to the FDA 2021 report, “Other/no reason” is the second biggest cause of chronic Propofol shortages, and it’s likely due to a troublesome reality of the drugs’ production. In 2009, there were 3 drug manufacturing companies producing Propofol in the US. One of the companies, Teva, decided to stop producing Propofol completely while Hospira, mentioned before, had to revise its production practices. This left only one company in the US producing Propofol, exposing an unfavorable market reality of manufacturing the anesthetic. Being a sterile, injectable generic drug that is complex and time-consuming to produce, it commands a much lower price on the market and yet has a costly production process. This means low profit margins for companies. When you factor that anesthetics have high liability associated with them if they aren’t produced correctly, there aren’t enough benefits to manufacturing the drug. It’s simply a better business decision to produce a patented drug that’s cheaper to make, and can be sold at a higher market price.

In exploring the above two reasons why there is a Propofol shortage in the US, we have found out why the US can’t manufacture its own anesthetics. First, critical ingredients needed to produce Propofol are not domestically sourced. Relying on China and India puts much of the supplies for Propofol on a shaky foundation, since unpredictable geopolitical tensions can have such a dramatic effect on shipping these ingredients across the world. Second, is Propofol’s thin profit margins. Being a generic drug and the US a free market economy, there is little chance a company looking to make a profit will choose to produce a low price, expensive to produce drug. These two factors lead to U.S. Propofol production chronically not meeting demand. 

It’s clear that a solution to the chronic U.S. and global Propofol shortage needs to be found. Given the uncontrollable market forces acting on the shortage, is there a solution that can solve this shortage? Wylan Pharmaceuticals, a portfolio company of Tiger Venture Capital Management, feels it has one. Their manufacturing process manufactures Propofol in high quantities at less cost than industry standard, while enabling a purity of 99.8% vs the industry standard 95%. By mass producing Propofol at low cost, they have increased the drug's profit margins. To learn more about Wylan Pharmaceuticals, click here.