There are always bottlenecks in the supply of medicines. While pharmaceutical companies complain about price regulation by politicians, pharmacists are demanding greater drug production in Europe. But it’s not that simple.
Whether fever syrups for children, cough medicine, antihypertensives, breast cancer medication or gastric acid blockers: If you want to have a certain medicine in the pharmacy, you sometimes encounter difficulties.
Because delivery bottlenecks have reduced the supply – customers then often get an alternative product that was not their first choice. Pharmacists view the bottlenecks with concern. “The situation is bad,” says the chairman of the North Rhine pharmacists’ association, Thomas Preis. He has never experienced anything like this in more than 30 years of work. A spokesman for the Federal Union of German Associations of Pharmacists (ABDA) speaks of a “great challenge” that will remain for the foreseeable future.
Pantoprazole is needed
As an example of bottlenecks, price cites the active ingredient pantoprazole, which is used to treat stomach problems. Because pantoprazole preparations are no longer available, one has to switch to omeprazole. However, this active ingredient has more interactions with other drugs. At the moment no one is leaving the pharmacy “unsupplied”, but: “The drug therapy that will be possible with the drugs that are still available can also lead to a loss of quality.” Price is concerned about the coming year. “We expect an increase in delivery deficits.”
According to a survey by the Federal Association of Drug Manufacturers, 18 percent of Germans have experienced difficulties or shortages of drugs. The bottlenecks are a nuisance for pharmacies because they have to find alternatives to medicines for patients or sometimes have to produce them themselves – this is time-consuming and expensive.
100,000 medicines affected
The Federal Institute for Drugs and Medical Devices (BfArM) currently lists around 300 reports of supply bottlenecks – with around 100,000 approved drugs in Germany. However, there are alternatives for many scarce medicines. “A delivery bottleneck does not therefore have to be a supply bottleneck at the same time,” emphasizes the authority. There are currently only around 10 reports on active ingredients that are critical to supply. The authority sees “no indications of a general acute deterioration in the supply situation in Germany”.
Pharmacies and trade unions see globalization as the cause of the bottlenecks. According to the study by the pharmaceutical association vfa, around 68 percent of the production sites for active ingredients intended for Europe are in the more cost-effective Asia. If there are production problems, contamination or a production standstill, this can also affect Germany. A few decades ago, the current supply bottlenecks were unthinkable, criticizes Apotheker Preis. “Germany used to be the world’s pharmacy, today China and India are the world’s pharmacy.” In his view, it would be important to bring as much production back to Germany as possible.
Another reason for supply shortages is economic pressure. Expensive energy and materials are also a problem for the pharmaceutical industry. But drug prices are regulated, and manufacturers cannot easily pass on higher costs to customers. In the case of prescription drugs, manufacturers must grant discounts to health insurance companies in discount agreements. In addition, there are fixed amounts as maximum amounts that the statutory health insurers pay for a drug. This should help to limit costs in the healthcare system and curb the increase in health insurance contributions.
With the law to stabilize the finances of the statutory health insurance companies, Health Minister Karl Lauterbach (SPD) increased the manufacturer discount for 2023 – to the annoyance of the pharmaceutical industry. The manufacturer discount will result in additional costs of 1.3 billion euros in 2023, criticized vfa President Han Steutel.
The pharmaceutical company Stada, one of the largest providers of generic medicines and over-the-counter medicines in Germany, is also feeling the pressure of higher energy and transport costs as well as more expensive raw materials. Because of the discount agreements, manufacturers could not pass on increased energy costs. “This results in prices and margins that sometimes barely cover our manufacturing costs and the situation continues to worsen,” says CEO Peter Goldschmidt.
The association Pro Generika also complains about cost pressure in inflation. Manufacturers of generics, i.e. imitation products of drugs with the same active ingredient whose patent protection has expired, covered 78 percent of the drug requirements of the statutory health insurance companies. Measured by what the insurers paid the companies for generics, Germany ranks at the lower end in a European comparison.
Managing Director Bork Bretthauer criticizes that the “politically desired cost pressure” has made the supply of medicines fragile. “Rapidly increasing drug and production costs with frozen prices make the production of medicines such as fever juices a loss-making business”. Fever juices for children do not require a prescription. The costs for this are reimbursed by the cash registers with fixed amounts to companies.
According to Pro Generika, the producers of paracetamol fever juices receive 1.36 euros per bottle. However, the active ingredient had become 70 percent more expensive within a year. More and more manufacturers are withdrawing from production. In the meantime, only one main supplier is left – Teva with its drug brand Ratiopharm from Ulm.
But what to do about drug supply bottlenecks? Stada boss Goldschmidt demands that the top three drug suppliers should be given the go-ahead in tenders instead of exclusive contracts. That would strengthen supply chains. Goldschmidt believes that the demand to bring production back from Asia to Europe is not enough. “The production facilities in India or China from which we purchase goods are checked according to European standards.” In addition, there could also be failures and bottlenecks in Europe, while the cost of medicines would rise. “The prices would explode.”
Pro Generika calls for the fixed amount for drug companies to be increased – it has been at the same level for ten years. That would increase the cost of the healthcare system. The association also refers to Great Britain. If a generic drug is not available in pharmacies at the agreed price, the reimbursement price will be raised for a certain period of time. In this way, companies could act more economically again. “Measured against this, the German system is too cumbersome and rigid.”
Delivery bottlenecks for medicines GKV Financial Stabilization Act BfArM on delivery bottlenecks
Source: Stern
Jane Stock is a technology author, who has written for 24 Hours World. She writes about the latest in technology news and trends, and is always on the lookout for new and innovative ways to improve his audience’s experience.
