How supply shortages of medicines endanger public health and promote illicit trade

Hundreds of medicines are not available in the European Union. The main reasons are a systematic failure in handling intellectual property rights and failure in control

The production of pharmaceuticals is particularly valuable – especially for manufacturing companies. For the European Federation of Pharmaceutical Industries and Associations the own industry is “Europe’s top performing high-technology sector”. An industry that gains high profits and focuses more and more on the emerging the markets in Brazil, China and India. 

In Europe, however, the high-tech sector is experiencing increasing delivery difficulties. The Health of Medicines Agency (HMA) states: “Shortage of pharmaceuticals which are of critical importance for patients is an increasing problem within Europe. The health status of patients is put at risk if they are not receiving their prescribed medicines in a timely manner. Shortages for patients can also translate to a lower quality and safety of care. Unavailability are therefore a considerable concern to national health authorities.” 

National regulatory authorities are currently listing hundreds of medicines that are unavailable for months or permanently. The unequal distribution of medicines within Europe is being exploited by resourceful wholesalers. “Of course, we give priority to distributing to those markets with highest prices. Other countries will not be supplied,” says an industry expert who wants to remain anonymous.

But the European Union has the knowledge of whereabouts of each individual pharmaceutical package at its disposal. Unfortunately, it does not use this knowledge so far. As part of the implementation of the “EU-Falsified Medicines Directive” (EU-FMD), each new pharmaceutical package is going to be provided with an individual tracking code since 2019. The whereabouts of each individual package are stored in a central database that is implemented and being built up since introduction of EU-FMD in early 2019. This database was created to prove the authenticity of each pharmaceutical package. The fact that the regional distribution can also be checked here has not yet been discovered.

If water damage occurs in a Chinese factory, many patients in Europe are left high and dry.

Patients who are dependent on drugs are thus virtually forced to make use of the black market (in this case international online trade) – not knowing whether the products are genuine or counterfeits.

Actually a debate on the problem of shortages of medicines starts in the European Union. One of the typical demands sounds like a Cold War scenario – a time when national authorities stored food and drug stocks in bunkers to save as many people as possible in the event of a nuclear strike.

The distribution and stockpiling of drugs does not solve the basic problem. This problem is due to regulations and to global procurement. If a drug is patented, the approval must also specify the producers from which the required raw materials are obtained. Deviations are not permitted. When a supplier of urgently needed additives for the medicinal product fails to deliver, the production of the medicinal product ceases altogether. Single sourcing therefore has a double impact on the pharmaceutical industry. Firstly, innovative drugs are protected under patent law, with the consequence that there is only one company that manufactures this drug. And this company usually relies on one or a few raw material suppliers. These are distributed globally. If water damage occurs in a Chinese factory, many patients in Europe are left high and dry. For patients it is too tempting to simply order the goods on the Internet then. Producers of counterfeit medicines do not know patent protection and “single sourcing”. They can certainly deliver.