How the U.S. Government Is Responding to Drug Shortages: Federal Actions in 2025

As of late 2025, more than 277 drugs remain in short supply across the United States-everything from life-saving antibiotics and chemotherapy agents to basic IV fluids. Hospitals are scrambling. Pharmacists are spending hours each week tracking down alternatives. Patients are skipping doses because the medication they need simply isn’t available. This isn’t a temporary glitch. It’s a broken system, and the federal government is trying to fix it-with mixed results.

What’s Really Causing These Shortages?

The problem isn’t just one thing. It’s a mix of poor planning, economic incentives, and global dependency. About 80% of the active pharmaceutical ingredients (APIs) used in U.S. medications come from China and India. These are the raw chemicals that make drugs work. But APIs are cheap to produce overseas and expensive to make domestically. So companies outsource them-and then build their finished drugs in just a handful of facilities. In fact, 78% of sterile injectables (the most common type of shortage) are made in only five plants nationwide. One machine breakdown. One quality control failure. One natural disaster. And suddenly, half the country is out of a critical drug.

The Strategic Active Pharmaceutical Ingredients Reserve (SAPIR)

In August 2025, President Trump signed Executive Order 14178, expanding the Strategic Active Pharmaceutical Ingredients Reserve (SAPIR). This program, first created in 2020, now targets 26 essential medicines-including cancer drugs, anesthetics, and antibiotics. Instead of stockpiling finished pills or injections, the government is storing the raw ingredients. Why? Because APIs cost 40-60% less to store, last 3-5 years longer, and can be turned into finished drugs quickly when needed.

The idea sounds smart. But here’s the catch: the 26 drugs on the list make up less than 4% of all shortage-prone medications. Meanwhile, oncology drugs alone account for 31% of all shortages, yet only a few are included in SAPIR. Experts like Dr. Luciana Borio, former FDA Acting Chief Scientist, say this approach is like putting out fires with a squirt gun while the whole building is on fire.

What the FDA Is Actually Doing

The FDA handles day-to-day shortage management. They work directly with manufacturers to resolve about 85% of shortages by fast-tracking inspections, allowing temporary imports, or giving companies more time to fix production issues. Their Drug Shortage Database tracks over 1,200 past and current shortages. In 2018-2020, they helped end a nationwide saline shortage affecting 90% of hospitals by coordinating imports and adjusting regulations.

But their tools are outdated. Manufacturers are legally required to report potential shortages six months in advance. Yet only 58% comply. Small manufacturers-those with fewer than 50 employees-ignore the rule 82% of the time. And the FDA has issued just 17 warning letters for non-reporting between 2020 and 2024. In the EU, under similar rules, they issued 142.

In November 2025, the FDA launched its Enhanced Shortage Monitoring System. It uses AI to predict shortages 90 days ahead by analyzing shipping data, factory output, and hospital purchasing trends. Early results show 82% accuracy. That’s promising. But without mandatory reporting, even the best AI can’t help if the data isn’t there.

Legislation on the Table

Congress is considering two major bills. H.R.5316, the Drug Shortage Act, would allow hospitals to use compounded versions of shortage drugs more easily. The bipartisan Drug Shortage Prevention and Mitigation Act would give Medicare bonus payments to hospitals that keep backup supply chains 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 good until you realize it’s less than 0.1% of total U.S. drug spending. Meanwhile, the American Hospital Association says hospitals are already spending an average of $1.2 million a year just managing shortages. That’s not a cost-it’s a tax on care.

Why the U.S. Is Falling Behind

The European Union has a centralized system. All member states report shortages to the European Medicines Agency. They require mandatory stockpiles. And they’ve cut shortages by 37% since 2022. The U.S. has no such system.

Funding is another issue. The Biomedical Advanced Research and Development Authority (BARDA), which once funded innovations in continuous manufacturing, saw its budget cut by 22% in 2026. The NIH’s drug development budget dropped 18% from 2024 to 2025. Meanwhile, new U.S. drug manufacturing plants take 28-36 months to get FDA approval. In the EU, it’s 18-24 months.

Even when money is spent, it’s not enough. The Department of Commerce announced $285 million in CHIPS Act funding for domestic drug production. But industry analysts say it takes $6 billion to build enough redundancy to make a real difference. That’s less than 5% of what’s needed.

The Human Cost

Behind every shortage is a patient. A cancer patient who gets a less effective drug. A child who gets an adult dose because the pediatric version is gone. A nurse who has to double-check every injection because the label changed.

AHA surveys from August 2025 found:

• 89% of hospitals had to substitute drugs during shortages
• 63% of those substitutions required extra monitoring
• 68% of hospitals reported treatment delays
• 42% reported medication errors directly linked to substitutions

On Reddit, pharmacists shared stories of compounding cisplatin from raw chemicals. One hospital switched between five different manufacturers for the same drug in a single week. The American Society of Health-System Pharmacists says 74% of pharmacists spend 10 or more hours a week just managing shortages. And 41% say they’ve had near-miss errors because of them.

Patients aren’t just inconvenienced-they’re at risk. Patients for Affordable Drugs found 29% of Americans skipped doses because drugs weren’t available. Among cancer patients, 68% had their treatment changed due to shortages.

The Big Missing Piece

No one is talking about the real problem: money. Making low-margin drugs like saline, insulin, or generic antibiotics isn’t profitable. Companies don’t invest in backup lines. They don’t build extra capacity. They don’t diversify suppliers. Why? Because the market doesn’t reward it.

The FDA can approve new manufacturers faster. The government can stockpile ingredients. But if the price of a drug stays at 10 cents per vial, no company will risk billions to build a new plant just to make more of it.

The most effective intervention we’ve seen? Mandatory shortage reporting. Hospitals that joined the FDA’s Early Notification Pilot Program saw shortages last 28% less time. But the current administration has weakened those rules. That’s like installing smoke detectors and then turning off the alarms.

Where Do We Go From Here?

The pieces are there. AI monitoring. API stockpiles. Faster approvals. But they’re scattered. Underfunded. And disconnected.

Real progress means:

• Making shortage reporting mandatory-with real penalties for non-compliance
• Expanding the SAPIR list to cover the top 100 shortage drugs, not just 26
• Creating financial incentives for manufacturers to build redundant capacity
• Slashing approval times for new domestic plants to match the EU
• Reversing cuts to BARDA and NIH funding for next-gen manufacturing

Right now, the U.S. is treating symptoms, not the disease. Stockpiling APIs is like keeping extra tires in your garage when your car’s engine keeps failing. You’ll get by for a while. But you’re still driving a broken car.

The question isn’t whether we can fix drug shortages. It’s whether we’re willing to pay for the solution-or keep paying with patient lives instead.