Representatives of ČAFF and AIFP about medicines shortages and stockholding obligation in the CZ

How frequent are medicines shortages in the Czech Republic?

9,000    locally registered medicines

6,500    locally traded drugs covered by public health insurance

150       approximate amount of medicines shortages per month

2 %       amount of medicines shortages percentage

10–20  amount of irreplaceable or hard-to-replace medicines per month in shortage

88 %     of medication in lack are replaceable by another drug (the year 2022)

12 %     of medicines groups were in shortage and not easily replaceable (three or fewer brands in a particular group, the year 2022)

Source: State Institute for Drug Control, ČAFF

„These data confirm that the highest risk of unavailability relates to groups with the decreased competition. Unfortunately, the competitiveness in these groups is threatened by the long-term pricing pressure of the state and health insurance companies. This happens without finding out whether these required savings will affect the amount of traded variants of medicines on the Czech market,“ says Filip Vrubel, Executive Director of the Czech Association of Pharmaceutical Companies (ČAFF).

What are the causes of medicines shortages?

• Increased patients demand in seasonal periods, household stocking-up,

• lack of alternative medicines (secondary unavailability),

• delayed or limited supply of raw materials or packaging materials (e.g. bottles, blisters or paper),

• long-term pricing pressure on the lowest price of medicinal products,

• regulatory rules, e.g. they don´t allow to import of a foreign-language version of OTC into the CZ,

• or export medicines to other countries with a higher price level.

„We can find the causes of medicines shortages across the whole distribution-supply chain, which has been still disrupted by the effects of the covid-19 pandemic and the war in Ukraine,“ says David Kolář, Executive Director of the Association of Innovative Pharmaceutical Industry (AIFP).

How did the price of inputs increase in 2022?

50-160%   year-on-year rise in raw material costs 

10%           EU inflation rate

65%           gas prices increase in connection with the war in Ukraine

30%           energy prices increase in connection with the war in Ukraine

400%         transportation costs rise

                                                                                                                Source: Medicines for Europe (data in 6/2022)

„Over the last year, there has been an unprecedented increase in the manufacturing and importing costs of medicines. In many cases, because of price regulations, it is impossible to reflect them in sales prices. At risk, there are particularly cheap medicines, which manufacturers supply to the market in the value of tens of crowns or low hundreds of crowns. Among them are life-saving medicines, which often cost tens of crowns, such as medicines for hypertension, antibiotics, pain medicines or cholesterol,“ warns Filip Vrubel.

What is the role of medicines manufacturing?

8+ months is the medicines production being planned in advance

60%     of medicines production takes quality and safety control

100+     possible content components of some drugs

Tens      amount of locations where pharmaceutical ingredients are being manufactured 

„The production of each drug batch must meet the strict, internationally binding conditions of Good Clinical Practice (GCP). Moreover, some medicines contain hundreds of different components manufactured in various locations in other countries worldwide. Therefore, medicines manufacturing is often planned for eight months or more (for some groups of drugs, e.g. vaccines, significantly longer),“ adds David Kolář.

How to deal with medicines shortages?

• Simplification of the regulatory environment,

• controlled channel of delivery of medicines for emergencies, i.e. building a direct pipeline of delivery of a specific medication to a pharmacy to a particular patient (e.g. based on a valid recipe) in case of some medicine there is only a limited amount and demand exceeds the amount in stocks in the Czech Republic,

• increase the efficiency and accelerate the adoption of measures relating to the ban on the export of medicines that reexport threats, based on current data on their usage,

• adjustment of the maximum price of medicines,

• adjustment of the reimbursements by health insurance companies (no increase of additional charge for patients),

• medicines manufacturing resilience of the EU in the production of off-patent drugs as well as API,

• creating new manufacturing capacities.

Does the amendment of the Act on Pharmaceuticals of the Ministry of Health of the Czech Republic offer a solution?

The Ministry of Health of the Czech Republic (MoH) has prepared an amendment to solve medicines shortages. The amendment lays down the stockholding obligation for medicines manufacturers to hold up to two months' stocks of all prescripted drugs. The effect of the amendment on improving the availability of medicines is debatable. Moreover, the new regulation will cost manufacturers hundreds of millions, which the government does not want to compensate, but penalties of up to CZK 20 million are possible in case of failure of this duty.

„Several EU countries also have legislation establishing a minimum of stock requirements. But a more common pattern is that certain obligations have pharmaceutical companies, distributors, and possibly pharmacies and hospitals, such as in Germany. Some countries also compensate for these obligations, such as Finland, which has a huge system of mandatory stocks (obligated including pharmacies and hospitals), compensates everyone for these costs associated with storing the goods and pays interest on the value of the goods, thus lying in stock,“ describes Filip Vrubel. „All countries that have introduced a certain volume of stockholding obligation are countries in Western Europe with medicines prices higher than in the Czech Republic. For example, France has not introduced compensation for pharmaceutical companies. Still, there the regulation is not "global" but is aimed at the main therapeutic groups, and the price level of medicines in France is not comparable to the situation in the Czech Republic,“ concludes Filip Vrubel, director of the ČAFF.

 „I do not think the proposed solution by the MoH will improve the situation with medicines shortages. We cannot prevent all medicines shortages, so we should look for solutions to minimise patient impacts. The current proposal doesn't solve it. If the proposed solution is to bring about any improvement, it should precisely target those groups of medicines where failures occur repeatedly. At the same time, it is necessary to consider that not all groups and types of medications manufacturers can store for a long time (e.g. individually prepared drugs, gene therapy), for these proposed obligations are not fitted at all,“ says David Kolář.

About ČAFF

The Czech Association of Pharmaceutical Companies (ČAFF) unites the main producers and suppliers of generic and biosimilar drugs in the Czech Republic, including domestic pharmaceutical manufacturers. It represents our local pharmaceutical industry and supports its social status and development. We are a member of the European Association of Pharmaceutical Companies - Medicines for Europe, which represents companies in our field in all of Europe. Thanks to that, we provide a connection between the Czech Republic and the European pharmaceutical industry, the European legislation and drug regulation. We also form part of the membership network of the Chamber of Commerce and the Union of Labour Associations in the Czech Republic.