Impact of Covid-19 on global pharmaceutical production and trade

Drugs & APIs shortage is a global issue with an evident impact affecting all the people independently of their geographic or economic position. A complex problem never has a single motivation but there are different factors that cause this trouble: supply issues, demand issues, regulatory issues, procurement, unavailability of raw materials, logistics and finally even trade disputes. In this long list we cannot forget to mention the heavy impact that has accelerated all of these difficulties in the last 3 years: the effects of the Coronavirus on the global drug supply chain. Finally, let’s not forget Medicine shortages harm patients and push up costs: surveys conducted by the European Medicines Agency (EMA) and others regulatory Associations in Europe report that medicines shortages have a significant impact on patient care. Shortages can lead to failure to treat, delayed treatment, the use of less desirable, often expensive, alternative products, an increased potential for errors or adverse events related to using alternative medicines or dosages, and exclusion from treatment, to list just a few of the reported outcomes. Only by bringing some pharmaceutical products back to Europe, which have been managed elsewhere for too long, will be possible to keep these issues under control. All this will be possible through economic investments and by evaluating the product not only on the basis of the most advantageous cost, but also on the basis of the quality, safety, traceability and certifications provided. For these reasons will be difficult to maintain the same current prices which will inevitably increase but with some important guarantees which will protect us from the current problems which we have to face and manage today

IMPACT OF COVID-19 ON GLOBAL PHARMACEUTICAL PRODUCTION AND TRADE The coronavirus crisis has brought to the fore the geopolitical dimension of these shortages, that is, the EU’s dependency on countries beyond its boundaries, especially China and India, for the production of many active pharmaceutical ingredients and medicines. Inability to provide curative treatment or delaying chemotherapy as a result of shortages can have significant consequences for patient outcomes, including survival rates. At various levels, in Europe, there have been and are ongoing discussions and commissions on how to overcome this new needs which require an effort to ensure compliance with European social and environmental standards are complied with in pharmaceutical production. Solutions to the problem are believed to entail collaboration and joint action, as well as the involvement of multiple stakeholders, including regulators, industry, patients, healthcare professionals, and international players. The Organization for Economic Co-operation and Development and the World Health Organization, in particular, are conducting work to improve access to medicines. Medicines supplychain stakeholders have all weighed in on the debate, offering explanations and recommendations for addressing the problem. Key EU institutions, several Council presidencies and the Member States have addressed the challenge of shortages and more broadly, that of safeguarding access to medicines, through various initiatives. The European Parliament has specifically addressed the issue in a March 2017 resolution. Ensuring the availability of medicines and overcoming supply-chain problems revealed by the coronavirus crisis are also expected to be important topics in the Commission’s forthcoming pharmaceutical strategy

The effect of the Covid-19 pandemic on global supply chains provided new fuel for the debate about international trade with drugs, particularly with respect to generics. Large quantities of these medicines – the patents for which have expired – are imported from Asia. Today around 60% of APIs worldwide are manufactured in India or China. India alone accounts for 18 percent of global generic drug manufacturing, most of which is exported. China is also not only a major manufacturing location itself, but produces 70 % of the APIs for India’s generics industry. This situation makes these two countries major players in the global market for generic medicines. According to WHO estimates, China accounts for 20 % of global API manufacturing. Its production capacities were hit hard by the strict measures put in place by authorities to stop the infection, resulting in a decrease in manufacturing output.

EUROPEAN MEDICINES AGENCY AND HEADS OF MEDICINES AGENCIES NETWORK According to the European Medicines Agency (EMA), improving the availability of drugs & API-s authorized in the EU is a key priority of the European medicines regulatory network. As the EMA notes, shortages or other problems with the availability of medicines, create challenges for the supply chain, which can have serious consequences for human health. Because of the EU’s subsidiary competence in matters related to health, most medicines shortages are dealt with by the national competent authorities. The EMA can be involved, for example, when a shortage is linked to a safety concern or affects several Member States. The EMA states that ‘regulatory authorities within and outside Europe are increasingly working together to prevent shortages and to limit their impact whenever they occur’. The EMA produces a public shortages catalogue that provides information and, if relevant, recommendations, to patients, healthcare professionals and other stakeholders. Some concrete measures adopted therefore indicate a clear willingness on the part of the European Commission to investigate the root causes that expose European patients to obtain medicines where needed and when requested. It will be therefore important to monitor this strategy over time: there is too much at stake to afford mistakes! We look forward to a continued partnership with the EC and other concerned stakeholders to ensure quality medicines are accessible for all and that this strategically important industry remains a competitive advantage for Europe, especially at a time when economic and public health recovery is intertwined.

REALISM AND INVESTMENTS Today, some medicines have a higher risk of shortage, such as injectables and generics. High costs caused by strict cGMP protocols for injectable medicines and low prices for generics lead to a few manufacturers and a vulnerable supply chain. The solution of this gap is not simple or even manageable in a short time but requires important economic and political investments which must involve both public and private funding. Without this alliance, it will be difficult to achieve effective results in the right time. Europe should therefore think about how to incentivize available pharmaceutical manufacturers and strengthen domestic production to bring medicines and APIs back to the European Union.

HOW TO INCREASE THE PRESENCE OF BIG PHARMA IN EUROPE? Let’s start with one consideration: the huge market of American multinationals also buys APIs from contract manufacturing European companies. A production capacity and flexibility already demonstrated in various partners such as CMOs, CDMOs, CRDMOs. Certainly some regulatory improvements could speed up the entire production process and further increase the attractiveness for Europe and for foreign investment, but how could this growth be further increased and facilitated? Certain times for authorization and the possibility to extend the notification procedure also to phase 2 clinical studies, and not only to phase 1 trials, are among the priorities regulatory commissions should address. Another request coming from big pharma is the possibility to facilitate the production of the new generation anti-tumoral active ingredients, which are no longer part of the highly potent and cytotoxic APIs. Another plus of the European “way” to API’s production which shall distinguish the country from other competitors is the increasing attention paid to the health & safety assessment  (HSE): a plus that find the increasing interest of big pharma in order to fulfil their environmental policy and sustainability. The costs sustained to improve HSE could represent for European suppliers an important opportunity of growth, as environmental audits are more and more common as a way for big pharma to decrease the regulatory burden and to achieve reduction of costs related to the management of incident’s risk and plants’ closure. However, reversing that trend is going to require an open and candid conversation on how we value the production in Europe of essential medicines. The status-quo – where a medicine’s value is determined only by its price and where Europe’s regulatory regimes are effectively playing against Europe’s manufacturing sustainability and security of supply – is simply not fi t for purpose.

We need to start looking not just at the cost but also at the value that having a sustainable manufacturing network and footprint in Europe brings. While we are not going to be able to make everything in Europe, diversifi cation of the supply chain will remain important. However, we must ensure that systemic and sustainable policy reforms will underpin such ambition.

CARLO LUSSO
Custom Synthesis Manager, Chemical Development and Manufacturing, Angelini Pharma S.p.A. | Fine Chemicals Business Unit, Italy