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The supply of medicines in Europe is in danger

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Alexander Krujatz, chief commercial officer at Centrient Pharmaceuticals, explains the decreasing resilience of the supply chain of essential drugs to European patients, and what can be done to safeguard the essential medicines for patients in Europe.

Key insights:

In the last 40 years, a significant share of generic medicine manufacturers, especially those producing active pharmaceutical ingredients (APIs) and intermediates, relocated or outsourced their manufacturing capabilities to Asia driven by comparative cost advantages. The shift is especially true for the European pharmaceutical market.

According to a recent study conducted by consultancy MundiCare on behalf of the German industry association of generic and biosimilar companies Pro Generika, the European generics market underwent dynamic growth and massive shifts in the past 20 years. Two-thirds of the CEPs approved (Certificate of Suitability of Monographs of the European Pharmacopoeia) required to produce active substances are now held in Asia, and more than half of the manufacturers are based there. The number of active ingredient certificates has increased fivefold between 2000 and 2020. Much of the growth is attributable to Asian market participants. Most generic medicines prescribed and dispensed to European patients are produced elsewhere, putting the supply chain of essential medicines at risk.

Several recent global events further underscored the importance of securing the European supply chain of medicines, especially the off-patent types. Off-patent drugs constitute 92% of treatment volume in the European Union. The recent COVID-19 pandemic, the ongoing war in Ukrainian, and the steep increase in energy costs in Europe all disrupted the global supply chains for all goods, including medicines. According to the European Central Bank, inflation continues to surge, and Harmonized Index of Consumer Prices (HICP) inflation rate is expected to stay above 9% for the rest of 2022. Transportation costs are increasing dramatically (up to 500%), and manufacturing input costs have risen by between 50-160%. All these factors keep impacting the production output and may negatively impact the medicine supply across Europe. Examples of recent shortages include breast cancer treatment tamoxifen in Germany and Amoxicillin suspension in Europe and the US.

Today, there are few API manufacturers left in Europe. Centrient Pharmaceuticals' sites in Spain and the Netherlands are some of the few remaining manufacturing supply networks based in Europe that produce Active Pharmaceutical Ingredients (APIs) and intermediates for first-generation Cephalosporin antibiotics. This type of beta-lactam antibiotic is included in the WHO's Essential Medicines List and is generally prescribed to patients allergic to penicillin. The energy bill at Centrient's production site in the Netherlands grew eightfold in the last 12 months and has become the most significant cost driver in producing high-volume and high-energy consuming yet low-margin generic drugs. The growing pressures on European pharmaceutical producers leave many important considerations for maintaining a European manufacturing base. What can be done to safeguard the essential medicines for patients in Europe?

1. The pressure on global supply chains underlines a growing need for deeper collaboration between the European Union, governments of European member states, the industry, and other healthcare stakeholders to secure the European supply of such essential medicines as antibiotics. Pricing policy and maintaining a solid European manufacturing footprint for drugs consumed in Europe should be the priority.

2. Creating an environment that fosters innovation — empowering research and development capabilities will make European-produced medicines more competitive globally. European governments need to support innovative, sustainable production that reduces environmental impact and requires less energy, fewer raw materials, chemical solvents and other harmful substances. This can be achieved by including sustainability criteria in procurement processes.

The urgent need for sustainable manufacturing

One of the ways to safeguard the supply of essential medicines to patients in Europe is by looking into enhancing sustainable manufacturing capabilities in Europe. Even though antibiotics are classified as essential drugs, the environmental impact of irresponsible antibiotic manufacturing sparks global concerns for the Asian region and the rest of the world. If factory wastewater is left untreated, remaining high concentrations of antibiotic residue can create hotspots of resistant bacteria which may lead to AMR. Seven hundred thousand people die yearly due to drug-resistant diseases, and the number of AMR-related deaths is forecast to reach 10 million by 2050 unless urgent action is taken. The World Health Organization recently declared antimicrobial resistance (AMR) as one of humanity's top global public health threats.

Sustainable manufacturing is the only way to preserve the environment and combat the spread of antimicrobial resistance, keeping the current antibiotic treatments effective. Established in 2017, the AMR Industry Alliance created the Common Antibiotic Manufacturing Framework (CAMF) and set stringent Predicted Non-Effect Concentration (PNEC) targets for use in environmental risk assessments of antibiotics to be self-reported as a part of this framework. The PNEC discharge target is the concentration of an antibiotic in water at which there is unlikely to be a risk of adverse environmental effects or of AMR developing. For the first time, the pharmaceutical industry, as member companies of the Alliance, have released the existing antibiotic data for antimicrobial resistance and eco-toxicity. This year’s Progress Report shows that an impressive 85% of Alliance members involved in manufacturing antibiotics are assessing their sites against the Alliance’s Common Antibiotic Manufacturing Framework (CAMF).

As a founding member of the AMR Industry Alliance, we fully commit to innovative, clean manufacturing. In May 2022, Centrient Pharmaceuticals was the first generics company to publicly announced 100% compliance with the stringent PNEC discharge targets set by the AMR Industry Alliance (AMRIA) for clean manufacturing of its full oral antibiotics product range. The Pure Actives enzymatic platform pioneered by Centrient Pharmaceuticals enables a 63% reduction in carbon footprint compared with the traditional chemical process. It requires fewer raw materials and no hazardous solvents or other chemicals – preserving the environment for generations to come.

The growing pressure on the European supply chains of medicines underlines an urgent need for deeper collaboration between the European Union, the European governments, the pharmaceutical industry, and other healthcare stakeholders to build and maintain a strong manufacturing base in Europe. Developing practical policies paired with incentivising local green production and is vital to safeguard the supply of medicines to European patients. The time to act is now.

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