International Pharmaceutical Federation (FIP) International Summit on Medicine Shortages

International Pharmaceutical Federation (FIP)

International Summit on Medicine Shortages

Reasons for medicines shortages

WORKSHOP 1 – DEMAND (and ECONOMIC) REASONS

EMA PAULINO (FACILITATOR)

Reasons for medicines shortages (120’)

1.Introduction to the workshop format (5’)

1.Introduction of participants (15’)

2.Introduction to the topic (5’)

3.Group discussion – Major categories - reasons and contributing factors (15’)

4.Small group discussions – Each category – reasons and contributing factors (40’)

5.Group discussion and workshop 1 wrap-up (40’)

International Summit on Medicines Shortages



PHARMACEUTICAL GROUP OF THE EUROPEAN UNION (PGEU)

“The medicines supply chain is highly complex and its efficiency relies on the performance of each individual supply chain actor including raw material suppliers, manufacturers, wholesalers, community pharmacies and intermediaries. If there is a disruption at any point of the supply chain, shortages can occur.”

Reasons for Medicines Shortages - Demand

Categories Sub-categoriesWhich

medicines?



medicines?

Shifts in Demand – Population/Society

1. Emerging markets (increased demand, lower supply, increased incentive to manufacture; 2. Natural disasters/War

(exceptional); 3. National Health Systems (government/3rd party-payers vs out-of-

pocket) 4. “Value of quality” – prices too low to support manufacturing – decrease

innovation; 5. Harmonization

Shifts in Demand – Supply Chain

1. Value in the system – payers and patients (low prices?); 2. Movement

towards formularies and clinical guidelines (e.g. NICE); 3. Parallel trade (price

differences) creates distortions; 4. Stockpiling (speculating/grey market); 5. Reference

based pricing; 6. Cross-subsidization with non-drug products – artificially low prices; 7. New

remuneration model for pharmacy



medicines?

Shifts in Demand – Health System

1. Tendering for sole source contracts (exclusion of other players in the market)

– reduces alternatives, changes manufacturing priorities, changes

country’s “standing” in priority of access; 2. Inadequate forecast of demand in

payers contracts – pull resources from other lines to meet contractual

obligations; 3. Clinical practice and guidelines changes (little time to meet demand), latest “clinical trials” – quick change by clinicians; 4. Integration or lack thereof of jurisdictional or health buying group policies; 5. Decisions on who must hold stock and for how long

(community service obligation? / different intervention points /industry, wholesaler,

purchaser?)

Solutions and recommendationsfor medicines shortages - Demand (180’)

1.Introduction to the workshop format (10’)

2.Summary of yesterdays’ groups discussions (10’)

3.Small group discussions – Each category – solutions and recommendations (60’)a) Solutionsb) Recommendations (3-4)c) Prioritization

4.Group discussion and workshop 1 wrap-up (60’)a) Recommendations (6)b) Prioritization

Solutions and recommendations - Demand

file://localhost/Users/emapaulino/Desktop/2013.06.20_Mailing_Farmácias.pdf


Categories Solutions Recommendations

Shifts in Demand – Population/Society

1. Globalisation of GMP standards to minimize fragmentation (allows re-allocation)

2. Develop global critical medication list (include 2 API sources, 2 manufacturers) – value delivered by protection price (minimum cost per unit of issue) – shared risk

3. Pooled global risk and build manufacturing capacity redundancy – incentive programs



Shifts in Demand – Health Systems

1. TENDER CONTRACTS1. Multi-source contracts2. Duration3. Conditions of contracts

clearly stipulated upfront4. Knowledge on “other”

evaluation criteria apart from price

2. FORECASTING1. Understand “influencers”

(market dynamics, historical accuracy)

2. Joint effort

3. CHANGES IN GUIDELINES1. Structured/Planned/

Global context

1. Multi-source contracts with contingency plans (criteria not solely on price)

1. Involve all stakeholders for more credible forecasts, based on reliable information



Shifts in Demand – Health Systems

4. JURDISDICIONAL HEALTH BUYING GROUPS

1. Transparency

5. ESTABLISH SAFETY STOCKS1. Clearly defined

throughout whole chain

4. COMMUNICATION (HOW, WHAT)

1. Public, Health professionals

2. Intra/Inter Country

3. Document current practice – Share best practices – Develop best practice model – Implement global best practice model to deal with medicines shortages



Shifts in Demand – Supply Chain

1. Identify critical/medically necessary (definition?) medicines and assure production

2. Do not treat medicines as commodities . Need a new model of purchasing (role of government)

3. Partner Governments and Industry to accurately forecast demand and capacity (minimize distortions)

4. Subsidize (Government) IF rational and necessary


Recommendations

Preamble: •Medicines not commodities / Free market does not apply•Short-term (quick fixes) vs Long-term (strategies)

1.To establish a critical medicines supply list (which may vary within countries/regions) – incentive programs may need to be in place;2.To make information available to decision-makers, other stakeholders and the public, on a regular basis, on:

a. medicines needs (includes tenders/requests for proposals/contracts)b. existing stock throughout the whole supply chainc. best practices (tendering, dealing with shortages, etc) - benchmarking

3.To more accurately forecast (short-term – tenders, and long-term – emerging economies) a. framework for forecastingb. contingency plans, be aware/take into account possible distortions

4.To attribute value to qualitya. build capacity redundancy (within same company and/or pooled with other

companies)b. new model for purchasing/incentivising stakeholders

i. promote multi source contracts (at least 2 APIs and 2 manufacturing sites)ii. not solely based on price (include quality, multi-source,…)

5.To institute global standards on:a. manufacturing requirements (GMP)b. regulatory (inspections, product approval, reciprocal recognition systems)

Documents

International Pharmaceutical Federation (FIP) International Summit on Medicine Shortages