According to Läkemedelsverket The number of backlistings of medicines increased during the second half of 2022. It is not a single factor that is behind the situation that has arisen, but rather several interacting factors.
The pharmaceutical sector is not immune to the external events that have affected the global economy. Increased manufacturing costs, rising inflation, increased global demand for pharmaceuticals in the face of a difficult-to-match supply, raw material shortages, increased energy prices and political demands for price caps on pharmaceuticals. All have to some extent affected the current deficit for certain pharmaceuticals.
In addition, the war in Ukraine and also a strict Chinese Covid policy, resulting in extensive lockdowns, play into the equation.
This has led to an increasing number of actors at all levels of the pharmaceutical chain reducing their stockholding for economic reasons. Often, it is older, well-established and less profitable medicines that are affected. When a link in this chain breaks, it has repercussions in other levels. In addition, the pharmaceutical industry has increasingly concentrated its operations in a few large manufacturing units outside Sweden's borders.
Limited stock at pharmacies
According to Pharmacy Association The majority of medicines are kept in stock at pharmaceutical distributors. These usually last for 3–4 months, while pharmacies normally have stocks that last up to 2 months. When pharmaceutical companies run out of medicines, a backlog occurs, with a visible effect on pharmacy shelves. This short-termism impairs the ability to handle disruptions.
However, backorders are not the only problem; shortages can arise for other reasons. According to the Swedish Pharmacy Association, only 10 percent of all medicines are so common that over half of pharmacies sell at least one pack each month. Even medicines for major diseases can be unusual as they vary in strength and size. The group of expensive medicines has also increased in recent years, which results in higher costs for pharmacies, especially for medicines that must be refrigerated. When a preparation remains unsold, the individual pharmacy bears the cost.
Treatment of serious diseases becomes more difficult
According to the Swedish Medical Products Agency, the backlog in 2022 was mainly due to manufacturing-related reasons (64 percent), followed by market-related (23 percent), distribution (10 percent) and regulatory (3 percent). The by far main factors behind these figures were production planning and production capacity at pharmaceutical companies, unexpectedly high demand for a specific product, delivery quotas and import and export volumes.
After the summer of 2022, the situation accelerated globally, mainly affecting drugs for the treatment of epilepsy and diabetes, but also antibiotics and estrogen therapy. This, combined with a hoarding of drugs, meant that the remaining listings in the fall of 2022 rose to slightly higher levels than during the beginning of the Covid pandemic in 2020.
Today, 764 medicines in Sweden are backlisted
However, the proportion of medicines that had an ongoing residual situation at the end of 2022 is relatively small compared to the total number of medicines marketed. The proportion of medicine packages with an ongoing residual situation is currently 4,8 percent, or 764 packages out of 16 marketed packages. See the Swedish Medical Products Agency's daily updated list of medicines with reported residuals in Excel format here.
Pharmaceutical companies are required to notify the Swedish Medical Products Agency at least two months before they can no longer supply a medicine, in order to be able to prescribe alternative medicines. However, according to the Swedish Medical Products Agency, this only happens in three out of four cases. In more complicated diseases where the patient has been testing medicines for a long time, switching too quickly can be problematic and entail an increased risk of complications. If, in addition, a substitute medicine is backlisted, the outcome for the patient can have significant consequences.
Are fines a sustainable solution?
In order to improve the availability of medicines and facilitate the management of medicine shortages, the government proposed several measures at the end of January 2023. This bill states that there is a greater vulnerability in the supply of medicines than before, caused, among other things, by reduced stockholding. The intention of the proposal is to strengthen the supply of medicines through faster information about emerging shortages and through strengthened stockholding.
One proposal is a penalty fee for companies that have not notified that the sale of a medicine will cease. The fee should be a minimum of SEK 25 and a maximum of SEK 000 million. The legislative changes may come into force on July 100, 1.
Two of the review bodies for the bill, Pharmaceutical Industry Association (LIFE) and The Association for Generic Medicines and Biosimilars (FGL), however, believes that the size of the fees could have the opposite effect and lead to reduced accessibility to medicines. LIF states that the sanction fees in many cases risk exceeding what the companies sell for in Sweden. LIF also sees a risk of overreporting with negative consequences. Both actors point out that medicines often have several strengths and packaging, which can lead to a very high total sanction fee. The Swedish Pharmacy Association, however, welcomes the proposal.
EU meeting in Malmö on drug shortages
There is no doubt that drug shortages are a difficult problem to deal with. One sign of this is that the EU set up a 'task force' last week. Its aim is to facilitate cooperation within the Union to deal with the situation. Read more here.
In addition, representatives from all EU countries' pharmaceutical authorities are currently meeting in Malmö to discuss this issue. Also representatives of the European Commission and emer cooke, Head of the European Medicines Agency EMA, is participating. The meeting in Malmö is the first of 22 that the Medical Products Agency will arrange during the six months that Sweden holds the presidency of the EU.
Whether the measures currently under discussion will provide better access to medicines and facilitate coordination in the event of acute medicine shortages remains to be seen. According to the Medical Products Agency, the situation with back-listed medicines in Sweden will persist at least through 2023.