Abstract: Drug shortage is a global challenge. Drug shortage problem reflects the policy effects of supply-side reform, government institutional reforming, generic drug consistency evaluation, and two-vote system. This paper conducts an empirical study on the pharmaceutical industrial structure adjustment of drug shortage by the Panel Data model. The results show that the downstream industry's lower market concentration and extensive production method, the higher transaction costs between upstream and downstream industries, what accelerate structural adjustment and upgrading, and solve the drug shortage problem. The industrial structure adjustment path of drug shortage includes the drug structure adjustment of medical institutions, network information searching, leading of state-owned enterprises, technological innovation, and so on.