A DRUG supply shortage in the US could deny crucial treatment to hundreds of Australian cancer patients.

The company that manufactures the cancer medication Doxil suspended production of the drug in November and supplies are dwindling in Australia.

Doxil is used to treat breast and ovarian cancer.

Ohio-based manufacturer Ben Venue Laboratories stopped making Doxil last month to undertake overdue ''preventative maintenance'' on its equipment.

The company expects the drug to be unavailable to patients until the last quarter of this year. It hopes to resume some manufacturing by March.

Gary Richardson, chairman of the Medical Oncology Group of Australia, said the shortage could affect up to 500 Australian patients.

He said the ''extremely effective'' drug was less toxic than alternatives.

The drug is prescribed to patients whose cancer has relapsed and other treatments are no longer appropriate.

Ben Venue is the only company that manufactures Doxil, also known as Caelyx in Australia.

Mr Richardson said the shortage was upsetting for patients who may be forced to take inferior drugs.

Cancer Council Australia chief executive, Ian Olver, said the shortage was serious for patients who were responding well to Doxil.