Navigating scarcity: solutions for medicine shortages in the EU, Central and Eastern Europe

Kamila Seberova

Wolf Theiss, Prague

kamila.seberova@wolftheiss.com

Zuzana Hodonova 

Wolf Theiss, Bratislava

zuzana.hodonova@wolftheiss.com

Medicine shortages have become a troubling issue across the world, and Europe is no exception. A number of factors contribute to such shortages, ranging from economic and regulatory challenges to global market dynamics. The main reasons include manufacturing issues, regulatory hurdles, concerns over profitability and high rates of competition, quality issues and changes in demand.

The Covid-19 pandemic has contributed to these shortages, as available resources were used for other purposes and there were disruptions in production and distribution. The demand for certain medicines was also much lower during the pandemic, with the restoration of their production requiring significant time.

As regards the Central and Eastern Europe (CEE) region, these global shortage dynamics have been exacerbated by specific economic, regulatory and political conditions in the region. To outline one example, some producers can be discouraged from supplying certain medicines by reference pricing policies, with prices often set based on the lowest prices in baskets of EU countries, and by reimbursement mechanisms. These factors particularly affect medicines with lower profit margins and influence decisions over which countries to supply in case of limited resources. The lower prices of medicines compared to other EU countries also contributes to parallel exportation, whereby medicines intended for the CEE market are redirected to Western Europe for greater profits. This leads to a situation in which these markets become a lower business priority for suppliers. Other factors can be attributed to national regulations which limit the flexibility and attractiveness of CEE markets.

Efforts are ongoing at an EU and national level to find solutions to shortages which significantly affect access to treatment.

Following the Covid-19 pandemic, and in response to recent major shortages, the EU has proposed a comprehensive set of measures resting on three main pillars: the increased role of the European Medicines Agency (EMA) in monitoring and coordinating supply-related issues; measures introduced as part of the EU Pharma Package; and the European Commission’s recent plan to address medicine shortages in the EU.

Under new regulations, the EMA will now have a framework for monitoring and mitigating potential and actual shortages of medicines which are considered critical, with a view to addressing emergency situations which cannot be resolved without EU coordination. The EMA will be responsible for setting criteria for adopting and reviewing the list of critical shortages. Critical medicines identified by Member States will also be included in the EU list.

Marketing authorisation holders (MAHs) will also be subject to certain requirements, such as: notifying authorities of potential shortages earlier than before (at least 12 months before last supply or six months before temporary suspension); developing shortage prevention plans; and transferring marketing authorisations to third parties to limit the impact of medicines being withdrawn from the market. The inclusion of a product on the list of critical shortages will also impose new obligations on MAHs, in particular to report the outcomes of all measures taken, such as increasing or reorganising manufacturing capacity, and adjusting distribution to improve supply. Additionally, the Commission will be authorised to place contingency stock requirements on MAHs and other stakeholders.

In October 2023, the Commission revealed its action plan to mitigate medicine shortages, detailing immediate, medium and long-term actions and further initiatives aimed at solving the shortages issues in the EU. These measures include:

• establishing a voluntary solidarity mechanism to support countries which are experiencing shortages through redistribution from other Member States;
• publishing the EU list of critical medicines (the first list was published at the end of 2023 and will be analysed to identify the measures that need to be taken);
• accelerating the reform introduced in the EU Pharma Package with the list of features which are to be implemented as a matter of priority;
• launching a joint action on regulatory flexibilities to enable fast replacement of critical medicines with alternatives (including possibility to temporary extend shelf-life);
• guidance on procurement introducing practices which can help ensure the security of supplies such as choosing multiple suppliers; and
• using placement of production in the EU as a selection criteria or using joint procurement alliances (for antibiotics and treatments for respiratory viruses) to avoid problems with availability for smaller markets.

The Commission plans to set up a Critical Medicines Alliance (CMA), initially for a five-year period, which while serve as a consultative mechanism and network to allow national authorities, industry and EU agencies to develop coordinated actions at the EU level to address shortages of critical medicines. A call to join this alliance was published at the start of 2024. The first outcome should be to identify priority areas for action with respect to critical medicines identified as having supply chain vulnerabilities.

The project also foresees the introduction of a Critical Medicines Act, an EU mechanism which will support the production of Application Programming Interfaces (APIs) and medicines in the EU and will foster strategic partnerships with third countries for the production of critical medicines. It is intended that this mechanism will provide funding for research and development, infrastructure development and operating costs for production.

At a country level within the CEE region, other politically-driven solutions are being adopted. Although they may have a significant economic impact on the various players, they do not always have the desired outcome and may actually lead to increased costs and administrative burdens for MAHs, wholesalers and other players. Critics argue that these states are transferring their own responsibility for ensuring effective control over medicine stocks to private stakeholders.

As an example, the revised regulation in the Czech Republic imposes a requirement on MAHs to ensure that medicines will continue to be supplied for one-to-two months following the notification of a disruption or termination of supply. However, the obligation to maintain a monthly or bi-monthly stock of most prescription medicines available on the Czech market may seem inadequate.

The updated regulation also introduces the possibility to designate a product as having ‘limited availability’. Such a product may not be exported outside the Czech Republic, and pharmacies would be subject to specific restrictions on ordering (limits to prevent stockpiling), while distributors are obliged to supply the product within two working days.

All links in the supply chain, from the MAH to the final pharmacy, are required to provide the Czech Medicine Agency with updates on the current ‘limited availability’ of medicinal products to enable the Ministry of Health to gauge precisely the stock available for delivery to pharmacies against the stock still available at pharmacies. The Ministry will monitor whether the supply of medicines matches expected demand from Czech patients. If a potential shortage is identified, the Ministry will incorporate the medicine into the reserve stock system. Wholesalers will then be automatically required to maintain stock levels equivalent to the average monthly demand.

Another example of a specific regulation concerning medicine shortages comes from Slovakia. This issue is indirectly affected by the obligations placed on MAHs and wholesalers and by legislation regulating pharmacies, most notably by the Emergent System (which concerns the emergency ordering of medicines), which was introduced in 2017 to ensure the availability of medicines.

The Emergent System must be implemented by every MAH and must be made available to pharmacies online. Through the Emergent System, pharmacies can order medicines for patients directly from the MAH if they cannot be secured directly from a wholesaler. The Emergent System is intended exclusively for situations where the supply of a medicine requested by a patient on prescription cannot be secured from a wholesaler, and only applies to medicines for human use which are included in the list of categorised medicinal products.

The Emergent System must provide the MAH with an overview of which public or hospital pharmacy has supplied the listed medicinal product for which it holds the registration. Emergency orders can only be placed by pharmacists using this system, who must attach the anonymised prescription. The system secures rapid delivery of medicines ordered online. Medicines must be delivered to the patient within 48 hours (or 72 hours if the deadline falls on a Sunday) of their Emergent System order.

Where exporting a medicine that is included in the list of categorised medicinal products, the MAH must notify the Slovak Institute for Drug Control that is has exported such medicine no later than within seven days of its export. This measure is aimed at monitoring the export of medicine for human use.