Episode 4.I - Inflation: How can it affect supply of medicines? Part I

Conversations on the EU Pharma

Medicines for Europe

Health & Fitness, Medicine

0 • 0 Ratings

🗓️ 22 February 2023

⏱️ 21 minutes

🔗️ Recording | iTunes | RSS

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Summary

The generic, biosimilar and value-added medicines industry provides almost 70% of dispensed medicines in Europe, yet accounts for less than 30% of pharmaceutical expenditure. This sector is at the core of expanding patient access to essential medicines and sustaining healthcare systems across Europe.

Over the last decade, the prices of off-patent medicines have been driven down as governments sought ways to deal with the pressure on healthcare budgets. This was a short term response to long term cost trends caused by ageing populations and the high cost of new innovative medicines. The result is the consolidation of the market and manufacturing, and an increased risk of disruption in supply, undermining patient access to essential medicines. This situation has been exacerbated by the COVID-19 crisis and the conflict in Ukraine, which have led to an increase in inflation, now over 10%, raw material costs rising to 160%, energy costs rising by up to 300% and transportation costs that can now reach 500% at peak times.

Inflation affects the off-patent medicines industry disproportionately, since off-patent medicines naturally have smaller profit margins due to competition between multiple manufacturers, and off-patent medicine price regulations which do not allow companies to adjust prices, unlike other industries where prices have risen in line with inflation and increasing costs.

We need to act now to ensure the availability of medicines in all European countries.

In the first half of this podcast episode, we would like to explore the challenges and impact of inflation on the off-patent pharmaceutical industry, and to address possible solutions to tackle the consequences of this inflation.

Episode host:

· Adrian van den Hoven (Director General, Medicines for Europe)

Expert speakers:

· Elisabeth Stampa (Board member at Medichem SA and President of Medicines for Europe)

· Bork Bretthauer (Managing Director, ProGenerika and Member of the Executive Committee, Medicines for Europe)

Transcript

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0:00.0	I'm Adrian Vandenobin, the Director General of Medicines for Europe, and I'm very pleased to host another episode of our podcast, this time devoted to the impact of inflation on the availability of medicines.
0:21.6	I'm here with two very knowledgeable experts of the industry.
0:25.6	Elizabeth Sampa is the board member of MediChem and also the President of Medicines for Europe.
0:31.6	Her company is involved in the production of medicines from the active pharmaceutical ingredient to the medicines
0:38.8	themselves and therefore has a good understanding of how inflation impacts the manufacturing
0:44.2	of medicines and therefore their supply. We also have Bork Brettauer, who's the Director General
0:50.1	of the Association of Generic Medicines in Germany called ProGenerica, Pro Biosimilars.
0:56.0	And he has a lot of experience with how the European markets, in particular the German markets,
1:02.0	should be adjusted to deal with inflation.
1:05.0	So inflation, everybody is facing that today, higher costs when you go to the grocery store, higher prices of gasoline
1:12.5	when you fill your car. But what does this mean for your access to medicines? For manufacturers,
1:18.9	inflation has a big impact. We see in Europe that the costs of many of the inputs for medicines
1:25.5	are increasing dramatically, such as raw material costs rising by over 150%, energy costs rising by up to 300%, and transportation costs sometimes up by 500%.
1:38.3	All of this needs to be integrated into the costs of manufacturing and of course the sales of the medicines. In Europe, this is a little bit more complicated because medicine sales are regulated by the government,
1:50.0	so the prices cannot really go up.
1:52.0	So we're going to discuss today how manufacturers are dealing with this complex challenge
1:56.0	and how market reforms might be introduced to deal with this as well.
2:02.8	Elizabeth, I'd like to ask you a question.
2:06.2	What is the perspective of the off-patent pharmaceutical manufacturers on the impact of inflation and on cost of goods?
2:12.0	Yes, Adrienne.
2:13.1	So the impact is that because we have in most of the European countries fixed price for the off-patent medicines,
2:21.9	and there is no option to review that price, the margins because of inflation keep going down.
	...

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