Drug shortages are threatening care quality and cost-containment efforts. I describe the pharmaceutical marketplace changes that have caused the problem, and propose new policies to solve it, through changing incentives for producers and purchasers. I propose a grading scheme for the Food and Drug Administration when it inspects manufacturing facilities in the United States and abroad. The inspections' focus would change from closing unsafe plants to improving production process quality, reducing the likelihood that plants will be closed-the most frequent cause of drug shortages.