The generics landscape

With shortages of one type of generic medicine or another now a regular issue, what are pharmacy trade bodies doing to mitigate the situation?
Sasa Jankovic investigates…


Generic medicine manufacturers supply close to 70 per cent of prescription drugs in Europe which, thanks to their cost efficiency, have doubled access to medicines for the most prevalent chronic diseases over the last 12 years.

But stories of community pharmacies struggling to get hold of certain generics continues to hit the headlines.

While The Guardian recently reported that a leaked DHSC document showed a lengthy list of medicine shortages, Mike Dent, the PSNC’s director of pharmacy funding, stresses that “There is no publicly available list of medicines in short supply.

“The Specialist Pharmacy Service (SPS) website holds some information to support healthcare professionals in providing advice to patients, but this is only accessible via an NHS account login.

“It is also worth noting that some problems can be regional rather than national (such as a change in the level of demand), making it difficult for any organisation to hold a comprehensive list.”

From the distributors’ perspective, Martin Sawer, executive director of the Healthcare Distribution Association (HDA), says HDA wholesalers and distributors are “currently struggling to source between 100-150 different products where there is often a manufacturer problem or regulatory issue.”

But Sawer adds “the majority of availability issues seeming to affect so-called branded products – branded generics or off-patent brands – where there may not be enough competition or an alternative product immediately available – so not true of generic medicines.”


Ebb and flow of supply

Warwick Smith, director general of the British Generic Manufacturers Association (BGMA), says that this ebb and flow of supply is “normal.”

“We have some twenty thousand products in the UK with complex supply chains so every now and again it’s to be expected that something goes wrong”, he says.

“However, what is different at the moment is we have 3-4 high profile products with significant difficulties in supply which is what makes the news, so overall it is pretty normal other than those small number of high-profile products.”

Shortages may also, in part, be “caused by the low drug prices in the UK (largely because of the effectiveness of pharmacy purchasing), making it a less attractive market for manufacturers,” says Mr Dent, adding that “price concessions are linked to pricing issues with medicines and these are often but not always associated with supply issues.”

The European Healthcare Distribution Association (GIRP) appears to place the blame at the start of the supply chain, stating in a recent position paper that manufacturing problems are causing “more than 60 per cent of medicine shortages” across Europe, and Mr Sawer says this is “certainly a factor in the UK.”

Indeed, he says: “The HDA believes that the majority of the medicine shortages begin with a particular manufacturing difficulty, and it is often the pressures associated with the knock-on effect on other products that causes broader availability issues.”


API issues

One example of this comes from China, which has started to consolidate its active pharmaceutical ingredients (API) industry to improve environmental protection and supply for its internal market, but this has had a major knock-on effect on API supply to Europe.

“China is moving its chemical plants from urban centres to more rural areas,” explains Mr Smith, “but the Chinese government closed the old plants before opening up a new one so things have not been ’managed’ as smoothly as they might, which has caused a ‘shock’ in terms of shortage of pharmaceutical ingredients, leading to an increasing cost, which is double whammy.

“In some cases the market has not come back to normal as quickly as it could because, due to downward pressure on cost, manufacturers have not kept as many different API suppliers on their licences as they normally would.”


FMD and stockpiling

The implementation of the EU serialisation rules against falsified medicines has also impacted production cost, complexity and capacity.

“Manufacturing capacity in Europe is also quite tight in significant part from FMD as printing the unique code reduces production capacity by around 10 per cent,” explains Mr Smith.

“Plus some manufacturers stockpiled leading up to FMD implementation and now for Brexit, so raw materials go short, production capacity goes down and people stockpile.”

Mr Sawer says the HDA is also aware of a small number of WDA(H) holders who may be offering to buy small amounts of stock from many different wholesalers and then hoard – for price gain purposes – or export the aggregated medicine packs collected this way – a process pejoratively known as ‘skimming.’

“Clearly, this remains an issue that needs to be resolved”, he says, adding: “HDA distributors take very seriously any disruption to the supply of medicines to any patients in the UK. Our member company business objectives are predicated on meeting demand with supply and preventing patient harm.”

With the generics sector firmly established as an international market, Mr Sawer says that medicine availability has become a growing issue across the globe, often due to global manufacturer production consolidation and pressure on medicines pricing by payors, but stresses that it is important to note that the generics market supply in the UK has improved in 2018-19.

“Prices and supply have stabilised, as the natural mechanisms of a commodities’ market have taken effect, although that said, action could still be taken to reduce the impact of future issues on the supply of generics.”


Greater patient access

Despite continuing market and manufacturing flux making these issues unlikely to be totally resolved in the near future, a new independent report by economics consultancy Oxera commissioned by the BGMA nonetheless champions the positives of UK generic medicines sector and how, via free competition, it provides sustained and significant savings to the NHS creating greater patient access.

The Oxera analysis, which focused on primary care and sales of medicines through community pharmacies, found that average actual manufacturer selling prices for readily available generics are typically around half the Drug Tariff or reimbursement price and concluded that the market for the supply of generic medicines in the UK is functioning well and delivering significant price reductions to the NHS of more than £13 billion annually following loss of patent exclusivity from originators.

Mr Sawer says the HDA “welcomed” the findings as “a fair reflection of the efforts made by manufacturers and wholesalers to provide equitable and fair distribution across all the four countries in the UK.”

Mr Smith, meanwhile, says that while the report “mostly reinforced what we already know, it did show the importance of flexibility for the market.”

He said: “For example, you might assume that if prices go to low manufacturers would pull out but actually they don’t; they sign dial down their volumes for a time which allows them to then increase them again quickly when the market recalibrates – and it’s the first time we’ve had this evidence.

“It also showed that most comparisons done with price look at the reimbursement price, which is very far off from the manufacturers’ actual price, so by comparing manufacturers’ actual sale price it showed we are the lowest in Europe. This is something we knew, but it’s useful to have and independent report confirming it.”

The shortages may also not be having as startling an effect on community pharmacies as the popular news media would suggest.

Andrew Grierson, a pharmacist at Wyvern Pharmacy in Accrington, Leicestershire, says: “We are actually doing alright, probably because as an independent we can pick from so many wholesalers, which means we end up recruiting customers from the other bigger chains because we have access to more stockists than they do.

“Customers then spread the word that we can help, and it is things like this that build customer loyalty.”


Brexit preparedness

Nonetheless, with Brexit rushing up to meet us, there is still the prospect of more layers of supply chain issues to come.

Mr Sawer says the government and the Department of Health & Social Care have worked hard alongside stakeholders, including the HDA, to put in place several contingency measures such as the unilateral recognition of EU medicines regulations; the plans to stockpile an additional six weeks of medicines; the intention to continue to recognise the EEA regional trademark exhaustion regime, and the proposal to continue using, until further notice, the current regulatory framework for the medicines supply chain.

However, he says the HDA still has a number of real concerns regarding the impact of a no-deal Brexit on the supply of medicines to patients across the UK, adding: “The HDA proposed and welcomed measures such as the Serious Shortage Protocols (SSPs) for pharmacists, but more would surely need to be done in the event of a Brexit that did not allow for some form of regulatory alignment.”

Over at the PSNC, Mr Dent also name-checks SSPs as well as steps to prevent the export of medicines such as adrenaline auto-injectors and HRT products from the UK as both positive measures that “should help to ensure that community pharmacies can continue to source the medicines that their patients need.”

But he adds the PSNC would be “keen to explore with GPs the tools needed to enable pharmacists to dispense appropriate alternative preparations or dosing when supply issues make that necessary.”

Collaboration and open communication remains a key request from Mr Sawer, who calls for transparency.

“The HDA would like to emphasise that we as a body, along with our members, are working closely with partners and stakeholders throughout the supply chain to try to mitigate supply challenges and work to reduce the amount of medicine availability incidents,” he says.

“One way, we believe, might be to introduce greater visibility of the reason medicines are being requested from wholesalers and which part of a particular business is buying them.”



From factory to pharmacy

The HDA has developed an educational infographic which aims to explain some of the reasons behind issues of drug availability and provide helpful information to all those who are involved in dispensing and delivering vital medicines to UK patients.

The HDA Infographic is available at the link here: https://hdauk.com/hda-news/press-release-hda-launches-infographic-explain-medicine-availability



Picture: AntonioGuillem (iStock)





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