The federal government is racing to pass legislation to ease long-standing issues in the drug supply chain. However, pharmacists and drugmakers have warned that the plans do not go far enough.
When Berlin pharmacist Fatih Kaynak last restocked his shop, he added raspberry flavoring to the list. “We now make liquid paracetamol ourselves,” he said. The idea came to Kaynak as fever-reducing medicines for children became more and more difficult to obtain.
Getting the raspberry flavor required several rounds of taste-testing among colleagues and approval from the medical staff at a local pediatrician’s office. Now, Kaynak said enthusiastically, “ours tastes even better than Ratiopharm,” one of Germany’s leading brands.
Beyond that, the pharmacist has had little good news to share since DW first caught up with him in December 2022. The medicine shortage has become even direr in the interim, he said.
“We still lack penicillin, various antibiotics, but also blood pressure drugs, cancer, stomach and cardiac drugs,” Kaynak said.
The dearth is being felt across Germany. According to the official national database at PharmNet.Bund, which documents these kinds of shortages, 425 drugs are listed as not available at all.
The pharmacists association of western Germany’s North Rhine region recently sent a survey to members about their business situations, getting responses from 400 pharmacies within 48 hours. Their conclusion: almost every second prescription submitted to them by customers is now affected by shortages and the additional workload results in monthly costs of around €3,000 ($3,200) per pharmacy.
“More than 130 respondents particularly emphasized the unbearable burden of the as-yet-unpaid extreme expenditure of time and the associated loss of sales and earnings,” association chairman Thomas Preis said in a statement.
On the hunt for available medicine
Kaynak took a slightly more relaxed view. “It’s very difficult, but we’ve managed to deal with it quite well so far because we’re constantly hunting down what we can get.” Every hour, he checks availability with wholesalers and orders as soon as something becomes available.
“But,” he conceded, “if I order 100 packs, I might get five.”
One thing that has helped, he said, was the Health Ministry’s partially suspending statutes on drug pricing.
“Health insurance companies still suggest giving the cheapest possible drugs to our customers, but now we can offer whatever manufacturer we have in stock,” he said.
The current suspension of fixed drug prices will last until May, at which time the Health Ministry plans to propose legislation to fundamentally reorganize drug pricing. This could cost health insurers several million euros in additional costs.
This plan is not without controversy within Germany’s governing coalition of the center-left Social Democrats (SPD), the Greens and the neoliberal Free Democrats (FDP). Despite this, Health Minister Karl Lauterbach (SPD) said that the country can’t afford for the process to be hindered in any way. At the end of last year, he said it was “unacceptable” that fever-reducing medicine for children was available abroad, but not in Germany.
Regulations blamed for shortage
Discount contracts and fixed-price regulations, which come with cost-cutting requirements, are seen as the main causes of supply problems. In the case of generic drugs, health insurers generally pay for only the cheapest supplier, with whom they have usually negotiated a contract at a fixed price.
That price was €1.36 for a bottle of liquid paracetamol, for example, an amount that had not increased in 10 years. However, in 2022 the price of the active ingredient in the medicine went up by about 70%. Of the 11 manufacturers of liquid paracetamol that existed in Germany in 2012, by June 2022 only one was left.
Most drug production now takes place in Asia, and the European Union is dependent on a few cheap suppliers. “The problem is that we have outsourced everything,” said Kaynak. “If China and India can’t supply the drugs or raw materials — or say we need them for themselves — then we’re just out of luck.”
Kaynak has also heard from manufacturers about difficulties in procuring necessary materials for drug production. “Sometimes it’s paper, then the materials to seal packaging, because another supply chain broke down because the ship was stuck in the Suez Canal or the factory had to close because of COVID-19.”
The Health Ministry’s bill would only allow for increased prices of generic drugs that are in short supply. Particular attention is to be given to medicines for children, for which prices could be as much as 50% higher than before.
Health insurers are now seeking to negotiate rebate contracts with manufacturers. Furthermore, in the future precedence is to be given to drug producers within the EU or who have contracts with states of the European Economic Area. Policymakers hope this will ensure that supplies remain secure even in times of crisis.
None of this is enough for pharmaceutical companies. “Selective fixes and additional burdens for manufacturers are not a solution to major challenges,” said Hubertus Cranz of the German Association of Pharmaceutical Manufacturers. “The issue of supply security for generics is getting attention, which is good in our opinion. But that is a far cry from a comprehensive approach to improving the overall situation.”
Kaynak also didn’t think the situation would improve quickly. “If something has been going in the wrong direction for years, you can’t fix it in a very short time,” he said, agreeing with something Health Minister Lauterbach said in December.
“Policies prioritizing cost-cutting and discounts have continuously worsened the drug supply for decades,” Lauterbach noted. “Turning that back can’t be done overnight.”
This article was originally written in German.
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Author: Sabine Kinkartz