News & Trends - Pharmaceuticals

Landmark Agreement to minimise risk of medicine shortages

Health Industry Hub | September 15, 2021 |
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Pharma News: The Generic and Biosimilar Medicines Association (GBMA) recently announced the signing of a new 5-year Strategic Agreement with the Australian Government, with patient access to medicines at the core of its objectives.

Guy Strong, Country Head of Sandoz Australia and New Zealand and GBMA Executive Board member, talked to Health Industry Hub about the landmark Agreement and how it aims to minimise disruption of patient care and mitigate the risk of medicine shortages.

The medicine supply ecosystem has evolved significantly during the COVID-19 pandemic. According to Mr Strong, the initial shock in the early days of the pandemic was profound. There was quite a strong nationalist urge from certain countries, like India, to cease the export of essential medicines. The limited manufacturing in Australia also placed organisations and patients at risk.

“We also saw the follow-on impacts of reduced capacity as the manufacturing sites needed to implement social distancing measures. This created bottlenecks in supply and in addition to extended difficulties in transport including international flights to Australia, created a supply issue. We coordinated with government, and the Novartis group, access to chartered flights that were centralised and managed out of our headquarters in Basel, but it really did impact us.”

In March and April of last year, patients were seeking six months’ worth of prescriptions dispensed at the pharmacies in one visit. Pharmacists and dispensary techs were working up to 18 – 20 hour days due to the volume of people, followed by restocking of shelves overnight.

“Several hospitals wanted to order two years’ worth of essential medicines which prompted conversation around equity of supply across the country, including rural pharmacies, in ensuring patients could access required treatments.

“With the latest delta variant, we have not seen the same craziness as we did in the initial days of the pandemic. Many of the nationalistic tendencies of governments to not allow export has now subsided. We still have capacity issues at manufacturing sites due to COVID. However, that has also been alleviated as people have found workarounds and other ways of dealing with it better.”

Since his arrival in Australia over three years ago, Mr Strong has been struck by the number of medicine shortages in the market. The centrepiece of the new Agreement is a commitment from the affordable medicines industry to hold an agreed increased level of stock in country, to better protect patients against supply volatility.

“I think it is a function of two things. One is not having the manufacturing base in Australia and the long lead times to get products from the rest of the world to Australia as the geographic expanse of the country itself makes logistics somewhat challenging.

“Additionally, with low prices for generic medicines, our contract manufacturers place us at a low priority level because they have other customers who are more profitable. That is fundamentally what is creating the stockouts.

“In this Agreement, we worked with the government to have more sustainable pricing on the high volume low price chronic disease products, and in return we agreed to increase the level of stock holdings from 1 – 1.5 months to 6 months of inventory in our warehouse, regardless of the stock levels in wholesalers and pharmacies, to minimise the supply disruptions.”

While this is not an insignificant expense, both on the ability to house the additional inventory and the potential write off costs if the market changes, it should better protect patients against supply issues relating to critical medicines.

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