New Report Addresses Medicine Shortages in the European Market

Medicines for Europe has released a new report, prepared by the Economist Intelligence Unit, that attempts to address the problem of medicine shortages in Europe.

In its introduction to the report, Medicines for Europe says that the sustainability of healthcare budgets in European nations has been “intensely pressured” in recent years by factors including an aging population and the introduction of high-cost drugs, and that governments aiming to address those challenges have resorted to austerity measures that have “driven the prices of some off-patent medicines to unsustainably low levels. This causes manufacturers of generic medicines to withdraw from the market, resulting in the increased risk of medicine shortages.”

The authors cite 2014 data showing that 86% of pharmacists surveyed (n = 607) in 36 European countries had experienced problems with sourcing medicines, and 66% said that medicine shortages occurred on a weekly or even a daily basis. The report’s authors state that the frequency and duration of medicine shortages has reached a point at which it has become imperative to address the issue that affects innovator, generic, and biosimilar medicines alike.

The report identifies the medicines most likely to be subject to shortages (which the authors define as a scenario that occurs when the supply of essential medicines is insufficient to meet public health and patient needs) as antimicrobials, oncology drugs, emergency drugs, cardiovascular drugs, and anesthetics. The European nations most affected by shortages were Denmark, the Netherlands, Portugal, and Croatia.

In addition to taking a toll on patients, whose outcomes can be affected by increased risk of medication errors with the use of unfamiliar, substituted treatments, shortages negatively affect pharmacists. The report cites 2013 data indicating that European pharmacists spend 2.5 to 5 hours per week looking for alternative treatments to medicines subject to shortages. Healthcare providers, too, face shortage-related burdens: some may be forced to switch patients’ treatments or even decide which patients to prioritize when rationing medications.

The report identifies economic causes for shortages of medicines:

• Low volumes, low prices, and low demand for some medicines contribute to reduced supply-sustainability in some markets
• Pricing mechanisms, including reference pricing (setting a list price of a medicine through comparisons of prices of similar medicines), tenders for medicines set at a price that does not anticipate variations in demand, and payback policies (which require manufacturers to pay back a share of revenue to the European Commission)
• Parallel trade, or the practice of buying medicines in countries where the price for a drug is low and selling the medicine in a country where the price is high

It also addresses manufacturing and supply-chain issues:

• Small numbers of manufacturing sites lead to shortages in the case of manufacturing problems
• Inventory strategies designed to reduce waste by delivering goods only as needed may be unable to scale up as demand increases
• Changes in supply or regulation of active pharmaceutical ingredients (API)
• Quality-related problems
• Natural disasters

Finally, the authors name regulatory lag time as an aggravating factor in resolving shortages.

Based on interviews with stakeholders (including national authorities, healthcare providers, pharmaceutical manufacturers, and patients) concerning these factors, the authors derived a set of key insights:

• Patient needs must be the top priority
• Effective communication is critical
• Better tendering practices are needed
• A clear definition of a shortage must be agreed upon
• Better management of shortage situations is necessary
• Parallel trade must be addressed

Other recommendations from some stakeholders included requiring manufactures to have more than 1 API supplier, giving pharmacists greater flexibility in substituting medicines, and standardizing packaging as a way to make the transport of medicines across borders more feasible.

The authors recommend the following strategies to avoid shortages:

• Improve tendering practices to foster predictability and improve lead times
• Maintain a healthy multi-supplier market
• Arrive at a common definition of medicine shortages and establish transparent processes in every nation to trigger action when a shortage is identified
• Implement an EU-wide notification requirement for manufacturers to alert officials to expected shortages
• Develop a transparent system for cataloguing shortages at the national level, and make such systems available to all stakeholders
• Enhance efficiency of regulatory procedures and implement fast-track processes to mitigate shortages
• Allow greater flexibility in delivering medicines across borders when necessary and allow for pharmacist-led substitution in cases of medical need

While Medicines for Europe praised much of the report, it added several caveats. An emphasis on arriving at a common definition of shortages, the organization said, diverts the focus from understanding root causes of shortages. Furthermore, early-notification systems that do not address a lack of communication in the EU market will not go far enough to solve shortage issues. Finally, the group called suggestions to required manufactures to have more than 1 API supplier a potential driver of increased regulatory burdens. Greater regulatory efficiency, rather than increased regulatory requirements, it said, is key.