Drug shortages are about quality, but also about price

If you are a patient or parent who can't get medicine you or your child needs to survive or live better, business profit prospects and government policies don't matter much.

However, in a system with free enterprise but also taxpayers paying much of the drug bill, both are very real factors in how, when, where and at what price drugs are sold.

Two aspects of that arose Monday, one in Philadelphia and another in Europe.

The Drug Information Association's 48th annual meeting at the Philadelphia Convention Center was the site of a panel discussion with U.S. Food and Drug Administration chief Margaret Hamburg, Health Canada's Paul Glover and the European Medicines Agency's Guido Rasi. A link to the Inquirer story is here.

"There are complex factors that underlie the shortages and we need more knowledge," Hamburg said. "There are economic factors as well as quality factors."

Most shortages are in the sterile injectable area. With fewer, mostly generic companies making such drugs - at lower profit margins - the room for error is less, meaning if one production plant shuts down with a quality problem, the supply is affected.

Glover was more direct.

"We approve the drugs," Glover said, referring to himself and other regulators. "We don't make the drugs. This is an industry problem. We do as much as we can. Industry has to look at its supply chain. The health system has to look at pricing models."

Meanwhile, Europe's fiscal and financial problems manifest themselves in drug supply and pricing situations. As mentioned in a Wall Street Journal story and in a letter released by the European Federation of Pharmaceutical Industries and Associations, GlaxoSmithKline chief executive officer Andrew Witty said national pricing policies are hurting drug companies and creating supply problems in especially problematic countries. A link to the Journal story is here.

Greece, among others, have cut reimbursement prices paid to drug companies, prompting less troubled nations to seek the same discounts. The price differences have led to shortages and black market re-selling of drugs.

Just like American executives who warn about profit-limiting policies forcing business to go overseas, Witty warned European leaders that European Union policies on prices for drugs could force companies elsewhere, including the Unites States and Asia.

"The best way to support innovation is to use innovation and reward it by paying fair prices for added value," Witty said in the letter. A link to the letter is here. "My industry has significant concerns about the implications of pharmaceutical pricing and reimbursement policies that are being implemented across the EU. These policies take a short-term perspective, and fail to strike the right balance between managing budgets and securing current and future patient access to medicines and vaccines. They undermine both patient benefit and the status of Europe as a home for innovation."