Workshop 2 Supply reasons

Reasons for medicines shortages

Big Yellow Taxi–Don't it always seem to go That you don't know what you've got Till it's gone They paved paradise And put up a parking lot

–Joni Mitchell (1970)

What are the causes of shortages – Regulatory (Tony Gill)

– API (Maura Kinahan)

– Production (David Gaugh)

– Distribution chain (Dawn Jennings)

– Economics, Incentive Business ( Julie Tam)

Regulatory 1. Needs to be consistency between the

regulators

2. Predictability of the regulation (transition)

3. Inspection of manufacturers sometimes cause delays

4. Many times there is a degree of understanding....

Regulatory - continue5. Rigid regulatory frameworks are restrictive and burdensome in some cases

6. May not be applicable to other parts of the world

7. Variations of interpretation

8. Backlogs of inspections, licensing expires whilst waiting for inspection

Regulatory - continue9. Lack of transparency can cause issues

10. Needs to be transparent

APIHugely complex. Key issues:1. Reliance on China and India – risk

perspective; and that they are both very different; how do you introduce standards

2. Lack of quality standards

3. Capacity of the API to handle global demands

4. Risk management- more inspections; turn around time; in terms of general business

API - continue

5. Lack of incentives, downwards pressure on price always. Keep pushing the price down and there is risk of breaking

6. Sharing inspections with rest of the world- avoid duplicity

Production

1. Regulatory actions need to be addressed more robustly, collaborating with reg affairs and companies

2. Need to be priority policies for expediting review of some products

Production - continue3. Production planning and specifically for injectables; need to know the plans and commit to the tender and ensure you can meet that need [tenders need to be tight]

4. Back up contingencies need to be in place.

5. Risk sharing – whether govt or some other company in another country. Are they willing to share the risk if the numbers tendered varied?

Distribution1. Community HCPs e.g. dentists no access to

GPO and access to resources to keep managing a shortage and help with costs

2. Forecasting is based on seasonal trends

3. Wholesalers are dependent on manufacturers and are obligated to wait for industry for allocation

4. No framework for just allocation or best practice in relation to distribution

Distribution (continue)

5. Stock piles in our region/ not in all countries

6. Distribution ; used to be no mediators – so many mediators make for a large level of opaque transparency

7. Sole suppliers – makes system vulnerable

8. Vulnerability for raw materials – seasonal

9. Emergence of new nations as suppliers and whether questionable GMP and more difficult to maintain supply

Distribution - continue10.Lean inventory instead of just in time

11.Lack of definition of necessary meds

12.Lack of ethical framework

13.Allocation differ in rules

14.Emergence and vulnerability of gray and counterfeit markets

15.Medicines open on the broad global market

Distribution (continue)16. Lack of oversight and an absence of indicators

pointing to potential

17. Stockpiling and govt

18.Contingency plans not robust

19. Responsible communication of drug shortages

20. Lack of coordination of production capacity

Economics, incentives business - continue1. Profitability; if they have the incentive they will

produce;

2. Need to incentivise manufacturers

3. Accountability: to whom? Shareholders? Patients?

4. Old vs new products profitability

5. Upgrade facilities

6. Consolidation of manufacturing

Economics, incentives business - continue7. Competition between countries

8. Purchasing/payer policies

9. Private vs public companies

10.Even within manufacturers some have long term and others short term decision making

11.Generic shortages exist; brand have 100% market

Economics, incentives business - continue12.Competition rules that do not allow to pricing

wars

13.Should profitability of drugs be the same as other products? E.g. drugs vs airplanes?

14.Should govt change profitability?

15.Trade agreements

16.Public health imperatives vs tax breaks

17.Regulatory bodies and payers cannot react as quickly as the profitability