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Drug shortages: a multifaceted problem

Drug shortages
Drug shortages

Drug shortages: a multifaceted problem

10 February, 2023

The number of backordered medicines in Sweden increased by over 50 per cent in 2022. Drug shortages, which are major problems across the EU, have led to a lively debate on how the region can ensure a stable flow of essential medicines. Right now, all EU countries’ medicines agencies are meeting in Malmö to discuss how to resolve the situation.

According to the Swedish Medical Products Agency, the number of backlogs of medicines increased during the second half of 2022. The problem is a multifaceted one.

The pharmaceutical sector is not immune to events wreaking havoc on the global economy. Several factors have affected the current drug shortage. Prominent examples are increased manufacturing costs, rising inflation, increased global demand for medicines vis-à-vis a difficult-to-match supply, shortage of raw materials, increased energy prices and political demands for price caps on medicines.

The war in Ukraine as well as Chinese tight covid policy also play into the equation.

As a results, more and more actors at all stages of the pharmaceutical supply chain have, for economic reasons, reduced their stockpiles. Often, this affects older, well-established and less profitable drugs. When a link breaks in this chain, it has repercussions in other ranks. As far as Sweden is concerned, the global pharmaceutical industry is concentrated into few and large manufacturing units outside of Sweden’s borders.

Limited stock in pharmacies

According to the Swedish Pharmacy Association, pharmaceutical distributors stock the majority of medicines. These normally last 3–4 months, while pharmacies usually have stocks that last for up to 2 months. When the drugs run out at the pharmaceutical companies, a backlog occurs. This leads to a visible effect on the pharmacy shelves. Overall, this short-termism impairs the ability to deal with disruptions in supply flows.

However, residual notes do not pose the only problem. Drug shortages can occur for other reasons too. For example, the group of expensive medicines has increased in recent years. This means higher costs for pharmacies, especially for medicines that require refrigeration. When a preparation is not sold, the individual pharmacy bears the cost.

Treatment of severe diseases is more difficult

According to the Swedish Medical Products Agency, the residual quotations in 2022 were mainly due to manufacturing-related reasons (64 per cent), followed by market-related (23 per cent), distribution (10 per cent) and regulatory (3 per cent).

The main factors behind these figures were production planning and production capacity of pharmaceutical companies. Other factors include an unexpectedly high demand for a specific product, delivery quotas, and import and export volume.

After the summer of 2022, the situation accelerated globally. This mainly affected drugs for the treatment of epilepsy and diabetes, but also antibiotics and oestrogen therapy. Since then, backlogs have risen slightly during the autumn of 2022 compared to the early parts of the covid pandemic in 2020.

Backorder of 764 medicines in Sweden

However, the proportion of medicines that had an ongoing residual situation at the end of the year 2022 is relatively small, compared to the total number of marketed medicines. The proportion of pharmaceutical packaging with an ongoing residual situation is currently 4.8 per cent, or 764 packages of 16,002 marketed packages. See the Swedish Medical Products Agency’s daily updated list of residual notified medicines in Excel format here.

Pharmaceutical companies need to notify the Medical Products Agency no later than two months before a medicine’s delivery deadline. This is necessary in order to be able to prescribe alternative medicines. However, according to the Agency, this only happens in three out of four cases. For more complicated diseases where drugs require longer testing periods, too rapid a shift can be problematic and entail an increased risk of complications for patients. In addition, a backorder for replacement drugs can cause significant consequences for the patient.

Are penalties a sustainable solution?

In order to improve the availability of medicines and facilitate the management of shortages, the Swedish government proposed several measures in a bill at the end of January 2023. The proposal is intended to strengthen the supply of medicines by speeding up the provision of information on emerging shortages and by strengthening stocks.

One proposed measure in the bill is a sanction fee for companies that have not announced the cessation of sales of a drug. The fee will range from a minimum of SEK 25,000 and a maximum of SEK 100 million. The amendments could be enforced from 1 July 2023.

The Swedish Pharmacy Association welcomes the proposal. However, two of the referral bodies to the bill, the Pharmaceutical Industry Association (LIF) and the Association for Generic Drugs and Biosimilars (FGL), argue that the size of the fees can have the opposite effect and lead to reduced availability of medicines. LIF states that in many cases the sanction fees risk exceeding what the companies sell for in Sweden. LIF also sees a risk of over-reporting with negative consequences. Both organisations argue that drugs often have multiple strengths and packaging. This can lead to a very high combined sanction fee.

EU summit in Malmö on drug shortages

Without a doubt, drug shortage is a difficult problem to deal with. One sign of this is that the EU has set up a task force to face the issue head on. Read more here.

In addition, representatives from all EU countries’ pharmaceutical authorities are currently meeting in Malmö to discuss the problem. Representatives of the European Commission and Emer Cooke, head of the European Medicines Agency (EMA), are also participating. The meeting in Malmö is the first of 22 that the Medical Products Agency will arrange during the six months when Sweden holds the presidency of the EU.

The question of whether the measures under discussion will provide better access to medicines and facilitate coordination in the event of an acute drug shortages, remains to be seen. According to the Swedish Medical Products Agency, medicine backorders in Sweden will remain at least through 2023.

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