**Brussels**: A report from the Critical Medicines Alliance reveals significant shortages of generic medications in the EU, primarily due to low-profit margins and reliance on a few manufacturers, threatening healthcare provision and highlighting the vulnerabilities in the supply chain. Action is urgently needed.
A significant issue concerning the availability of critical medicines in the European Union has emerged, primarily impacting generic medications and those without patent protection. Shortages in these areas are attributed to low profit margins, which dissuade pharmaceutical companies from investing in substantial production capabilities. The current healthcare landscape within EU member states increasingly favours the procurement of generics at the lowest prices possible, a move designed to mitigate financial pressures on national healthcare systems.
This pressing concern was underscored in a working version of a report sourced by “Rzeczpospolita” from the Critical Medicines Alliance (CMA), an organisation comprising several hundred entities, including countries, pharmaceutical companies, and business organisations. The CMA was established at the behest of the Health Emergency Preparedness and Response Authority (HERA), with the intent of formulating strategies to counteract the ongoing shortages of critical medications across the EU.
The report highlights that generics constitute approximately 90 per cent of the medications listed as critical within the EU framework. These medications are deemed essential for sustained healthcare provision, and their uninterrupted supply is vital to prevent shortages. However, the reliance on a handful of manufacturers for many of these generics has rendered supply chains precarious and excessively dependent on a limited number of suppliers.
Among the challenges identified by the Alliance is the substantial dependence on specific geographical regions for the supply of active pharmaceutical ingredients (API) and raw materials required for generic production. The industry has seen a trend towards relocating API production to countries such as India and China, where lower production costs and more lenient regulatory standards exist. Consequently, it is estimated that the overall costs associated with developing, testing, producing, and marketing generics in these regions are approximately 20-40 per cent of those incurred in Europe. Recent shifts have seen 60-80 per cent of the production of crucial active ingredients for generics being transferred to Chinese manufacturers.
Additionally, the CMA report illustrates the erosion of the EU’s domestic production capabilities across all phases of the supply chain, including marketing authorisation license holders. The fragmentation within the industrial value chain is another critical issue, as there is a growing disparity between manufacturers engaged in initial stages—those producing intermediates and APIs—and those involved in high-value activities in later stages, such as formulation and packaging. This division diminishes the investment potential available to API and intermediate suppliers, further complicating the manufacturing landscape within the EU.
As stakeholders assess the findings, the discussions surrounding the robustness of the European supply chain for critical medicines continue to gain importance amid the ongoing challenges highlighted in the CMA’s report.
Source: Noah Wire Services
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