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Drug shortages in Europe: a preventable crisis?

Across the EU, demand is surging as pharmacy shelves become empty. Can future shortages be prevented? Let’s take a look.

Recently, pharmacies from Lisbon to Tallinn have run out of common antibiotics and cough medicines for children. While some countries have been very open regarding their current stock, others, like Estonia, classify this as strategic information. But are drug shortages preventable? In this blog, we look closely at the causes behind the current deficiencies and evaluate how countries like Estonia can build a stockpile more effectively.

What is causing the European drug shortages?

The world has bounced back almost three years after the pandemic. Domestic flights have recovered a 93%, while international travel already amounts to 69% of pre-pandemic levels. At the same time, there is a surging number of cases of strep-A, COVID, influenza, and respiratory syncytial virus (RSV). Higher demand for beds and antibiotics now pressures the still-recovering international supply chains.

China and India produce around 60 to 80% of the world’s supply of active pharmaceutical ingredients. This concentration of suppliers is risky since if one supplier has a shortage, it quickly becomes a global problem.

“The problem we're facing with medicine is the same problem that we might face with microchips. But medicines are not like any other good,” stated Ilaria Passarani recently,

Secretary General of the Pharmaceutical Group of the EU.

With demand soaring for some drugs, overseas manufacturers can stop producing a lesser profitable product and cut off their supply. New regulations may also deter suppliers, as happened when the new EU's Medical Devices Regulation (MDR) was enforced. In a matter of months, the number of certified medical devices fell from 25,000 to just 2,000, according to Reuters. Other factors driving drug shortages in Europe include the war in Ukraine, rising energy prices, and high inflation.

Despite having months to prepare for the winter, many countries—including Estonia—are struggling to keep pharmacies shelves full. But why?

What made the Estonian drug stockpile less effective

In early 2022, the Estonian Ministry of Social Affairs and the Agency of Medicines (Ravimiamet) started a list of essential over-the-counter and prescription medicines that needed stockpiling. The list was finished by September but was immediately classified, making stockpiling (and thus fixing shortages) harder than it should have been.

Having a confidential list of essential drugs is counterproductive on many levels. Estonia has long promoted a culture of transparency, ranking as the 13th most transparent country among 180 nations. This hard-earned reputation could be easily lost when critical information is hidden from the public. Without a current public list, local and regional suppliers are left out of the equation. They cannot help to build the supply through either new sources of approvals or parallel importation. It also makes supply planning challenging, as local vendors need to know the quantities the government requires to maintain or increase its stock. Finally, keeping the list of essential medicines secret is also a political risk since an undetermined amount of taxpayer money is being used to satisfy a system that is not open on what it needs or how it uses the funds.

The stockpile levels required by the Estonian government are limited to cover one month of national supply. As the current model relies on companies to create, store, and maintain the stock, it is critical to communicate more openly with the industry and make some key moves to promote collaboration between the government and pharmaceutical companies.

How to build a robust national stockpile of medicines

As mentioned before, transparency is critical. France and Germany report medicine stockpile numbers publicly and they actively communicate which drugs they monitor. This allows the private and public sectors to join efforts to resolve shortages and avoids unnecessary guesswork. Another preventive measure is to prepare for changes in treatment regimens during supply shortages. By working with manufacturers and prescribers, it is possible to create regimes for potential shortages and ensure enough supply of the alternatives.

In addition, it is also helpful to incentivize an extended dating policy. To elongate the expiration date on drugs and reduce manufacturing costs, governments can invest in stability studies to guarantee a safe stock for a longer period. Most drugs have a 24-month use period due to regulations assigning dating based on 6-month data. Yet many medicines continue to be effective for 36 months and even more. By financially encouraging stability testing for a 36-month window, it is possible to incentivize suppliers to create more extensive stocks, reduce the risk of short-dated (and thus wasted) pharmaceutical inventory, and provide greater flexibility in case of shortages while reducing the impact on public finances of expired drug destruction.

The European Union is a diverse community where disease prevalence—and thus drug shortages—are not uniform. Estonia can reduce the market pressure on the local medicine inventory by taking a more active approach towards stocking. One option is to partner with parallel import companies nationally and internationally before shortages happen. Many countries, such as the U.S. and Canada, allow quick product importation in a crisis. In Estonia, the local Agency of Medicines (Ravimiamet) could fast-track new national approvals for drugs in an emergency, enable product importations, and use exception authorization for drugs with low supply.

Drug shortages can (and should) be avoided

Thirty-six months of the pandemic should be enough to teach the industry a better way to ensure drug supply. We now know that relying upon overseas suppliers can become very costly, very fast. The J. Molner Company focuses on fixing supply chain disruptions in the U.S. and Canadian markets. By not needing to position ourselves in the Estonian pharmaceutical market, we have a unique opportunity to share our best practices as subject matter experts.

As we turn the calendar page and start 2023, we look forward to collaborating with Estonian and European firms that work in parallel importation to build sturdier supply chains, prevent drug shortages, and create a better stockpiling policy that is both transparent and open.

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