Tuesday, March 21, 2023

Are there shortages of cancer drug Pluvitco and skilled workers?

A shortage means that the price is below the intersection of supply and demand so that the quantity demanded is greater than the quantity supplied. Normally that would push prices higher (or wages higher in the case of the workers). Just having less of something than before or a low quantity does not mean there is a shortage. Neither article discusses this

In the case of Pluvitco, the article mentions supply issues. My guess is that if Novartis, the drug maker, tried to raise price, the government would try to stop them. Novartis actually has to get permission from the FDA to produce the drug at a site that right now doesn't. This would be a normal market response. If quantity supplied is less than quantity demanded, you increase quantity supplied (which would end the shortage). But they have to wait for the FDAs okay.

In the case of finding enough skilled workers to make semiconductors, there is a normal supply response. More people will be getting the right training but that takes time. If any company in the mean time wants these workers, they will have to raise wages and salaries. Once that happens quantity demanded will equal quantity supplied. But companies will have fewer workers than they hoped to get at the old salaries.

See Shortage of Last-Ditch Drug for Advanced Prostate Cancer Worries Doctors: Novartis seeks to ramp up Pluvicto production to ease supply issues by Jennifer Calfas and Melanie Evans of The WSJ. Excerpts:

"A drug used to extend the lives of people with advanced prostate cancer is in short supply and will be for months"

"The Food and Drug Administration said last week the availability of Pluvicto is limited as manufacturer Novartis AG struggles to meet demand. The drugmaker said the shortage stems from manufacturing and delivery issues. "

"Novartis is also “taking the difficult but necessary step” of halting the addition of new patients for the treatment as they try to increase supply, said spokeswoman Julie Masow."

"Novartis recognizes the distress patients are experiencing and is working hard to increase supply, said Ms. Masow. 

“Our ability to supply Pluvicto with only one approved site is presenting significant challenges, and we are working around the clock to generate as much supply as possible,” she said."

"Novartis said it is operating the Italy facility at full capacity. It filed last month for FDA approval to manufacture commercial Pluvicto for patients in the U.S. at its site in Millburn, N.J. The company has asked the agency to expedite its review, Ms. Masow said."

See A $100 Billion Bet on Semiconductors Hinges on Remaking Upstate New York’s Workforce: Micron plans to hire 9,000 employees at a new suburban Syracuse campus amid shortage of skilled workers by Annie Linskey and Joseph De Avila of The WSJ. Excerpts:

"A shortage of skilled workers in places such as this Syracuse suburb is posing a major challenge for the Biden administration’s ambitious plan to spur chip manufacturing in the U.S.

Micron Technology Inc. plans to invest $100 billion to open a semiconductor-manufacturing campus here, with construction starting in 2024 and production beginning in the latter half of the decade.

This snowy outpost isn’t an obvious place to reshore an industry from overseas. Its working-age population has declined over the past two decades as other big companies pulled out. The new jobs require highly skilled engineers and technicians already in scarce supply nationwide. At least two other semiconductor manufacturing companies considered expanding here but opted against it after evaluating the area, county leaders said."

"Local colleges and universities are overhauling their education and training programs to vastly increase the number of new engineers"

"Micron said it plans to employ 9,000 workers at the Syracuse-area campus when it is fully built by 2045, and predicts another 41,000 jobs for contractors and suppliers."

"Yet the pool of talent around Syracuse to fill thousands of highly specialized new jobs isn’t big enough."

"the company is planning to build a pipeline of workers by investing in local training centers and providing $10 million to K-12 schools to beef up their curricula in science, technology, engineering and mathematics. Micron is also collaborating with local community colleges and universities to make sure their graduates are ready to work for the company"

"Syracuse University plans to increase the size of its undergraduate and graduate engineering programs by 50% over the next three to five years."

"Even construction workers will require specialized training to operate in the ultraclean environments the fabrication facilities require" 

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How Supply and Demand Explain Higher Wages for Teen Babysitters (2022)

Is There A Booze Shortage? (2022)

Car makers face ‘chipageddon’ (2021)  

Does the U.S. have a firefighter shortage (2021) 

Cold Snap Sparks Record Rise in Natural Gas Prices in Asia (2021) 

There is no truck driver shortage in the US (2021) 

Is there a shortage of homes? (2020) 

Why honey prices have climbed about 25% since 2013 (2019-This post is featured in Introduction to Microeconomics by Luís Cabral. He is chair of the economics department at New York University.)

Is there really a shortage of construction workers (2019) 

Was there really a shortage of meatless burgers? (2019)  

What Chocolate Shortage? Cocoa Prices Steady as Record Output Projected (2019)  

Is There A Christmas Tree Shortage? (2017)  

Is There Really A Honey Bee Shortage? (2013)  

Will There Be A Pumpkin Shortage This Year? (2011)

Introduction to Microeconomics by Luís Cabral