The EU Parliament approved the report on shortages of medicines

The European parliament voted on 17 September the report addressing the root causes of medicines shortages; the need for an increased EU response to tackle this long-lasting problem is the key message, as acknowledged during the Covid-19 health crisis. The report follows the adoption on 13-14 July by the ENVI Committee of its own-initiative report on shortage of medicines.

According to the European Parliament, the number of shortages increased 20-fold between 2000 and 2018, and 12-fold since 2008. Easy to manufacture cheap starting materials and ‘mature’ medicines present the higher risk of shortages. Around half of medicines in short supply falls in the therapeutic areas of chemotherapeutics, products to treat infections (vaccines, but also antibiotics) and nervous system (epilepsy, Parkinson’s disease); other affected areas include anaesthetics and medications for hypertension and heart disease.

Considering the great dependance of pharma imports from third countries, especially China and India, according to the EU Parliament “The European response to the shortage of medicines must be based on three pillars: a return to health sovereignty by securing supplies, stepping up European action to better coordinate and supplement member state health policies, and enhancing cooperation between them”.

The main contents of the report

The approved motion highlights “the geostrategic imperative for the Union to regain its independence” with regard to all aspects of healthcare management, including the prevention of shortages and the fair access to the supply chain. 

A target that according to MEPs would require the establishment of a diversified supply chain for the Union’s pharmaceutical industry, and a medicine shortage risk mitigation plan to cope with vulnerabilities. The report recall the coordination role the EU should play with respect to the different national pharmaceutical and public health policies; a better harmonisation of terms such as ‘shortage’, ‘tension’, ‘supply disruptions’, ‘stock-out’ and ‘overstocking’, for example, would be required. To this instance, a starting point might be represented by the definition of ‘shortage’ proposed by the European Medicines Agency (EMA) and the Heads of Medicines Agencies (HMA) joint Task Force in 2019. 

The Parliament also asks the Commission to better distinguish between ‘medicinal products of major therapeutic interest’ (MITMs) and ‘medicinal products of health and strategic importance’ (MISSs), being for these last ones the interruption of treatment a cause of immediate threat to the patient’s life. The report welcomes the call for tender launched by the Commission for a study on the causes of shortages of medicines in the EU, which should be complemented by a second study on the impacts on patient care, treatment and health.

Suggestions for the future

The new European Pharmaceutical Strategy should represent the way to activate actions to address these issues; MEPS also proposed the Commission to incorporate measures for the pharmaceutical sector into the 2021 due diligence law proposal for companies.

From the patients’ perspective, the report underlines how access to medicines may be limited by higher prices of the substitute product proposed, a lower reimbursement rate or complete lack of reimbursement. The EU should become less dependent on third countries as for the supply of APIs and medicines of major therapeutic interest; the request to the Commission is for a map of EU’s production sites in third countries and an evolving map, to be used as a reference, of the existing and potential production sites within the EU. The manufacturing of essential APIs and medicines in Europe should be also encouraged from the regulatory point of view.

Transparency in supply chain management should be pursued through the fight of inadmissible business practices. The return to a more European-based industry should be also supported by financial incentives, protection of Europe’s strong pharmaceutical industrial base and support to relocation of pharmaceutical operations in the EU, for example by rewarding investments in the quality of medicines and in the security of supply. 

Compliance by the industry should be facilitated by the provision that “all public funding must be made conditional on the full transparency and traceability of investments, on supply obligations on the European market”. Obligations for MAHs under Directive 2001/83/EC should also be reinforced, and the Commission should release guidelines for member states on how to best implement the most economically advantageous tender (MEAT) criteria with reference to Directive 2014/24/EU in order to overcome the lowest price approach. Investments in the manufacture of APIs and finished medicinal products are an option, for example, as well as the number and location of manufacturing sites, the reliability of supply, the reinvestment of profits in R&D and the application of social, environmental, ethical and quality standards. Tenders leading to just one successful company, or only one production site of the basic substance, should be avoided as they may exacerbate vulnerabilities of the supply chain. The creation of one or more European non-profit pharmaceutical undertakings to manufacture medicinal products of health and strategic importance is another possibility foreseen by the EU Parliament. 

A better dialogue with all the stakeholders, with an eye on the improvement of the circular economy, is also mentioned with respect to agriculture, horticulture and forestry, in order to favour the production of active ingredients in the EU. A robust European intellectual property framework should be the tool to support the innovator pharmaceutical industry to invest in R&D and manufacturing in Europe; SMEs should be also better included in the pharma supply chain. More funding for medical-oriented R&D activities to be run within the new Horizon Europe is another priority set by the Parliament, while deploring the litigation cases aimed at delaying generic entry and asking the Commission to ensure the respect of the end of the commercial exclusivity period for patented drugs.

The possible role for EMA

EMA should represent the key node of a new European unit for preventing and managing shortages and, in the long term, should deliver marketing authorisations subject to the fulfilment of supply and accessibility requirements. The creation of common stocks and baskets of drugs for the treatment of cancer, infections, rare diseases and other areas particularly affected by shortages are other suggestions contained in the report. The digital transition should represent an opportunity to improve the real-time management of stocks in each member state. 

Mature medicines at risk of exiting the market may benefit of a special statute to support industrial investment in their continuity of supply. A European contingency reserve for medicinal products of health and strategic importance (MISSs) is also proposed by MEPs, which may possibly result in the creation of a European “emergency pharmacy”. Joint procurement at the European level should also be encouraged, especially in the field of rare diseases. The 10-year market exclusivity clause associated to Regulation (EC) 141/2000 on orphan medicines should be revised in order to reverse the burden of proof that the product is not sufficiently profitable to cover R&D costs. The report also discusses how to better face new shortages associated to health emergencies in light of the experience gained during the Covid-19. 

Comments from EIPG

EIPG signed on 6 December 2019 a joint statement on root causes of medicines shortages in collaboration with other stakeholders, including EPFIA, Medicines for Europe AESGP, EAEPC, GIRP and Vaccines Europe. The document represented a starting point for discussions on how to approach the issue, and clearly summarise in a table the main possible root causes from the industrial perspective and under the regulatory, manufacturing and QA, economic and supply chain dimensions. The main bias refers to centrally authorised medicinal products vs the ones authorised at the national level, that impacts on the possibility to market a certain product in the entire European market space and delays the filing and approval of variations.

Pharmaceutical manufacturing requires severe GMP’s standards to be put in place by companies, resulting in the need of high financial investments. Other factors that may play a role are the possible disruptions of production arising from natural disasters, manufacturing lag times linked to the complexity of processes, inaccurate forecasting resulting in surging demand, and quality issues with APIs or excipients. 

Many different actors take part to the pharmaceutical supply chain, each of them exerting a certain influence on the market conditions. The decision made by a company to enter or not a specific market is a typical example, together with the positioning in terms of price and reimbursement. Pricing policies are often intended to contain pharmaceutical expenditure, without consideration of factors that would require price adjustments. Single-winner, price-only tenders further exacerbate price erosion, explains the joint statement, impacting on the number of alternative sources for a certain medicinal product. Other measures often used to contain the expenditure (e.g. payback mechanisms, payment delays, etc.) are not appealing for the industry. All these mechanisms can finally result in the decision to withdraw the marketing authorisation for a product in a certain country; an occurrence that may have a dramatic effect on patients’ access, should it be taken by all the alternative suppliers of the product. 

The complexity of the pharmaceutical supply chain may also result in differences between the volumes released on a given market, the volume of exports and imports and the actual need of the said market. According to the associations, MAHs often apply supply quotas on distributors based on estimates of national patient needs, but this approach may nor reflect the fluctuation of demand. And the product might result available, but cannot be accessed by patients at the point of dispensing, for example if stocks are not positioned at the right location.

The joint paper asked for a harmonised definition of shortage as well as of the ‘risk of shortage’ for essential medicinal products. “High-risk” medicines should be prioritised, suggested the associations, and should be tackled by a more efficient European cooperation providing greater regulatory flexibility, efficiency and incentives. A predictable and sustainable environment for pricing & reimbursement would be needed to support a broader number of alternative suppliers in a certain market, a direction opposite to the short-term cost containment measures often utilised in many countries. 

Comments from the pharma associations

Several associations representing the different interests along the pharmaceutical supply chain commented the ENVI and/or EU Parliament reports on shortages of medicines. 

Medicines for Europe had positive reactions towards the clear recognition of the key role played by off-patent medicines to favour patient access to essential medicines and the indication for targeted guidelines on medicines procurement made by the EU Parliament. A more healthy competition for generic and biosimilar medicines is among the request of the association, which also asks to include the ENVI approach to root causes for shortages in the new pharmaceutical and industrial strategies under development by the EU Commission.

Regulatory flexibility on pack size and the introduction of electronic product information are other important points for Medicines for Europe, together with the amendment of the EU Variations Regulation and the implementation of the telematics reform. “While all companies have well defined supply obligations under existing contracts with established penalties for failure to supply, doubling penalties and fines on companies will discourage them from participating in tenders and will not help solve medicines shortages”, is the comment with respect to a possible punitive approach to procurement.

The European Healthcare Distribution Association (GIRP) welcomed the Parliament’s initiative, recognising the importance of the issue to be addressed by short, medium and long-term measures. “Due to the lack of availability of medicines, full-service healthcare distributors encounter difficulties ensuring the continuous supply of the full range of medicines”, said GIRP president, Bernd Grabner. The assessment of root causes and the call to implement an early warning system to monitor shortages have been particularly welcomed by the representatives of distributors. GIRP also support the use of early notification of potential and confirmed shortages by MAHs to full-service healthcare distributors (in addition to National Competent Authorities) as an essential tool to optimise the allocation of available medicines. As added by Mr Grabner, “Full-service healthcare distributors are perfectly suited to support a European mechanism and to guarantee the timely and continues supply of healthcare products wherever they are needed, even in case of crisis. They are an integral part of the solution.”

The European Public Health Alliance (EPHA) also commented the report voted by the EU Parliament and presented its list of priorities for the next steps to be planned. A European study on the impact of shortages on patient care, treatment and health is considered essential, as well as the clarification of supply and notification obligations for MAHs and wholesalers under Directive 2001/83/EC, and the availability of dissuasive and proportionate sanctions in the event of non-compliance. Diversification of suppliers for APIs, excipients and finished products is considered more important than the simple relocation of production in the EU.

The tool of a centralised digital platform should be used to declare available stocks at the European level and for reporting shortages, including real-time communication to healthcare professionals and patients. A harmonised approach to shortage prevention and management for MITMs is also envisaged, together with procurement tenders leading to multiple winners.

E-leaflets should not completely substitute printed information, which should in any case remain available to patients. A Joint Action funded by the new EU4Health programme to prevent shortages, the exploration of European non-profit undertakings for essential medicines at high risk of shortage and new innovative and coordinated strategies and exchange of good practices in the area of stock management and transparency are other actions supported by the European Public Health Alliance.