The Times reported last month that drug shortages in the United States are approaching record levels, with thousands of patients facing delays in getting cancer treatments, a drug that reverses lead poisoning, a sterile fluid needed to stop the heart for bypass surgery and antibiotics for strep throat, among many other medicines. One doctor described the shortages as a national health emergency.

In a healthy free market, such shortages would be few and fleeting if they occurred at all. The profit motive would induce existing suppliers to ramp up production and new ones to enter. Instead, the Food and Drug Administration lists 137 drugs that are “currently in shortage.” That shows that the market for medicine needs some kind of medicine itself.

What exactly is going wrong? A key part of the problem is low prices — specifically, low prices paid to manufacturers of many generic drugs and biosimilars. Their profit margins are so thin that it doesn’t make sense for them to invest in production. Some are shutting down.

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If a drug manufacturer wants to supply a hospital, nursing home or other institution, it has almost no choice but to go through one of these organizations. The manufacturers pay fees to the group purchasing organization for access to its customers. The fees paid by manufacturers might ordinarily be considered illegal kickbacks under the federal anti-kickback law. But in the 1990s the Department of Health and Human Services concluded that a complete ban on payments could inhibit some potentially beneficial arrangements, so it granted immunity from prosecution to group purchasing organizations as long as they comply with a long list of anti-corruption rules.

That safe harbor sticks in the craw of the group purchasing organizations’ critics. “It’s the biggest scam in America, in my opinion,” Phillip Zweig, the executive director and co-founder of Physicians Against Drug Shortages, told me. (Zweig and I wrote for BusinessWeek magazine at the same time in the 1990s.) Sara Sirota of the American Economic Liberties Project, which has joined Zweig’s organization and others in asking the F.D.A. and the Federal Trade Commission to investigate, told me the fee payments unavoidably create a conflict of interest and “should be rolled back.”

Critics say the organizations wield their market power to demand low prices and high fees, shrinking the manufacturers’ profit margins to the point where it’s barely worth the effort. Earlier this year, Akorn Pharmaceuticals, which was the sole active domestic supplier of a special dose of liquid albuterol used by hospitals for asthma patients, shut down production and dissolved in bankruptcy court.

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