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Sunday, March 18, 2012

Price controls blamed for drug shortages.

In an opinion piece published in the Wall Street Journal (3/2, Federgruen, Subscription Publication), Columbia Business School professor Awi Federgruen argues that recent news of major shortages in two critical cancer drugs is not surprising because government price controls on generic drugs are prompting manufacturers to exit markets, reallocate manufacturing capacity to more profitable pharmaceuticals, and cut back on investments in better manufacturing technologies and processes.

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