The Pharmaceutical
Journal Vol 267 No 7160 p197-198
11 August 2001
PDF file (50K)
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The Pharmaceutical
Journal Vol 267 No 7160 p197-198 |
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PDF file (50K) |
Where have all the medicines gone? |
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By Allan Karr, MRPharmS |
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Traditionally, the United Kingdom has rarely been troubled by medicine shortages. Now, however, they seem to be becoming a fact of life. In this article, the author examines the reasons for medicine shortages and describes a number of initiatives being implemented or considered to try to resolve the problem |
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Much debate has so far been focused towards rationing, a process that intentionally limits access by patients to medicines. But there is, perhaps, a more worrying occurrence that results in a similar outcome, namely, medicine shortages. The failure of the pharmaceutical industry to produce and supply the specific quantity of appropriate medicines for all patients has always been a problem facing health care professionals both in the United Kingdom and abroad. In the UK recently, the NHS plan recognised the importance of an effective supply chain by highlighting the need for increased access of patients to medicines. However, the number of critical and routine products that are now either being withdrawn or in short supply has increased and examples of products that have suffered supply problems during 2000–01 are shown in the Panel. Failure to supply the most appropriate medicines will raise many questions from the public. After all, how do we explain to patients in today’s modern NHS that the medicines they need are not available because of a failure in the supply chain? Traditionally the UK, because of the size of its pharmaceutical industry, has been rarely troubled by medicine shortages. However, the problem of individual drug shortages, which in the past was limited to those countries without an extensive pharmaceutical industry base or which had affordability problems, is now fast coming upon us. Of course, the UK is not the only industrial country to be affected. The United States, for example, is also experiencing problems associated with increasing medicines shortages, particularly of injectable products. In the US, the Food and Drug Administration has been given the responsibility of trying to resolve some of the problems. Paradoxically, it has been accused of causing some of the shortages itself by closing manufacturing plants for “truly minor violations such as GMP paperwork infractions”.1 The FDA has launched a website, which is similar to one in the UK (www.uclhsolutions.com), in order to inform health care workers of specific shortage problems. The UK pharmaceutical marketplace does not conform to traditional supply-versus-demand, free-market economics. The market is not free and has control features that can act as barriers to entry to new suppliers. Some of these barriers are technical and include the need to license medicinal products via the Medicines Control Agency. However, a number of these barriers are being overcome, for example, the increased use of European licences through the European Medicines Evaluation Agency. Despite attempts to reduce trade barriers, there still appears to be difficulties in matching supply with demand as medicines shortages continues to increase. The hospital sector is the health care sector which is arguably the most affected by drug shortages. Although it represents only 20 per cent of the UK market, it has a wider range of product requirements than the primary care sector. Many of these products are in critical market niches with few suppliers. Indeed, commonly, this market sector has many products with only one or two suppliers, which increases the vulnerability of supply if adverse supply events occur. Generic injectable drugs and specialist hospital drugs are particularly susceptible. It is therefore important that all those in the supply chain understand the factors that cause shortages and how to manage them, so that they can take steps to avoid depriving patients of the medicines they need. Some of the factors that are thought to cause medicine shortages include: Globalisation of industry production units The pharmaceutical industry is trying to reduce its overheads to be more competitive in the marketplace. Reducing costs by rationalising manufacturing to fewer production plants is now common. Fewer production units cause difficulties in effectively scheduling manufacturing to changing market demands. Recently, for example, a production plant in Italy was closed down by the country’s licensing authority. Supplies intended for the UK market were diverted to Italy causing a national shortage here. Shortfall of production facilities in the UK and Europe The existing EU market is not encouraging for generic manufacturers thus opportunities for more suppliers are reduced. The EU does not allow manufacturers within Europe to start developing or producing generic drugs until after the patent of the original manufacturer has expired. Manufacturers from other countries are in a more competitive position, as they are not bound by this provision (Roche-Bolar, essentially an exemption from patent infringement action in cases where development work is conducted for marketing authorisation purposes). Indeed, many non-European manufacturers supply European markets on the day of a drug’s patent expiry. Also, the cost base of many non-European manufacturers is more advantageous because of lower operating overheads. Mergers of pharmaceutical companies The recent spate of mergers and acquisitions has led to companies managing large portfolios of products. Since this task is not sustainable at a profit, many products are divested to smaller companies with minimal support or are discontinued altogether. Cost of licensing drugs and GMP The MCA needs to recover its costs by charging manufacturers license fees. The licence fees are standardised and do not reflect the market size or the potential income expected. These fees can be prohibitive for those intending to target niche markets. The Orphan Drugs Act is intended to assist the development of certain new niche products but does not address the problem of existing products. Also, the cost of developing and licensing medicines can also be prohibitive for small companies. Already a number of critical hospital production units have closed because they are unable to acquire the capital investment required owing to the limitations of NHS funding arrangements. The closure of these useful production units has undoubtedly reduced the options available for sourcing alternative supplies when shortages occur. Effective NHS contracting The Purchasing and Supply Agency and hospital trusts have been successful in driving down prices over many years by using well established drug contracting processes. The existing low drug prices and subsequent low profitability together with the risk of failure through the tendering process may deter new entrants to commit to this sector of the market. Less stock in the supply chain Since holding stock costs money, no one in the supply chain wants to keep stock. Even national wholesalers aim to keep no more than two weeks’ worth of stock. There is less buffer stock in the supply chain to protect against failure to supply products. Manufacturing problems are therefore enhanced and more immediate. Those organisations trying to achieve “just in time” delivery are most adversely affected. Impact on the NHS Medicine shortages are beginning to have a profound effect on the NHS and the patients it serves. The impact can be seen in number of ways: Increased use of unlicensed drugs In order to satisfy patient demands there has been increased purchasing of alternative unlicensed drugs. These unlicensed supplies have been obtained from either a limited number of UK generic manufacturers or from the few hospital production units that have managed to survive. The risk of more NHS production units closing causes additional pressure to obtain alternative products. On occasions it has been possible to acquire licensed products from abroad. However, these would still be regarded as unlicensed in the UK. The growth in use of unlicensed drugs, apart from the additional workload in their management, will increase the medicines risk for the patient, pharmacist, doctor and NHS trust. Increased costs The purchase of alternative drugs usually requires the production of smaller batches from alternative manufacturers or the importation of unlicensed drugs. In almost all cases both these measures will result in increased costs. This additional cost will occur despite using the clawback process for NHS hospital contracts that can deliver the differential costs when a supplier is unable to supply. Other costs include the extra manpower involved in sourcing stock through a shortage period and the management of unlicensed drugs. Increase risk to patients There are a number of medicines in short supply that have no clinical alternative on the market. Patients will then not be treated with the most effective medicine for their needs; occasionally they may not be treated at all. Attempts to resolve the problems The growing problems associated with medicines shortages has led to a number of initiatives being implemented or considered: National Shortages group A group comprising representatives from the Purchasing and Supply Agency, the Department of Health and hospital procurement staff has met to monitor specific shortages of critical hospital products. The group has liaised with manufacturers and has tried to co-ordinate alternative supplies from hospital or industry production units or have facilitated importation of product from abroad. Rapid alerts system of communication A “rapid alert” cascade communication process to hospitals is in place. The communication network is able to highlight the need to limit stock in short supply for critical products. The recipients are then able to take appropriate measures to preserve stock and inform local clinicians of the supply problem. UCLH Trust “Solutions” newsletter and website The pharmacy at UCLH has developed a newsletter and website which provide details of products with supply problems. The details provided include the cause of the supply problem, expected duration of the shortage and possible alternative product(s) available. Department of Health and Association of the British Pharmaceutical Industry initiatives The DoH and the ABPI have successfully worked closely together recently to produce joint guidelines on managing product discontinuations. The guidelines should assist the NHS by providing staff with more time to seek alternative suppliers of products before they are discontinued. Discussions have just started with a view possibly to obtain a further set of guidelines on managing shortages. Pharmacy market support group Following a review of the NHS generic contracting process, plans are under way to form a national pharmacy market support group that would focus on trying to stabilise the market. The group, although it would have no statutory power, would try to facilitate and encourage suppliers into niche markets as well as to ensure that the NHS obtains the best value for money. Ensuring capital requirements for hospital production units The recent difficulties of one generic injectable supplier has served only to highlight the existing problems in matching medicines supply with demand. Frailties of the existing supply chain systems are becoming more pronounced. In particular, the limited number of generic injectable suppliers together with the declining attraction of the small hospital market have only compounded the problem. The need for hospital production units to remain in order to resolve shortage problems is self-evident. The review last year of NHS production units, which has yet to be circulated, may assist in providing some solutions to the problems of capital funding which have caused closures in the past. Conclusion In past years, pharmaceutical supply problems have been few and have passed by generally unnoticed. Today, for a variety of reasons, this is not the case. Doctors and patients are increasingly becoming aware of the problems and will need to cope with increasing medicine shortages. However, questions are now being raised as to why vital medicines are in short supply. There is greater difficulty in explaining the reasons for so many shortages, especially when the pharmaceutical industry has such a broad base in the UK. Sadly, the recent Government initiative towards effective medicines management might flounder without the appropriate medicines in stock for NHS staff to manage. The solution to the problem is a complex one and will certainly involve a great amount of further collaboration between all those involved. |
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US hospital drug shortages growing. Scrip 2001;(2616):15. |
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Allan Karr is pharmacy business services manager at the University College London Hospital NHS Trust’s Pharmacy Business and Distribution Centre, 140 Hampstead Road, London NW1 2BX |
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