Medical drug market

Einleitung / Introduction

Medicine shortages reflect the lack of sufficient access to (essential) medicines, where at least temporarily supply cannot meet demand at a national level. Rarely linked to one factor in isolation, targeted interventions to mitigate shortages necessitate knowledge on the relationships between and across individual causes. Such evidence remains scattered. In this study, we first identify the individual causes of medicine shortages before and during COVID-19 and by regions (North America, EU, and Rest of the World). We then cluster these into meaningful categories and derive a causal framework elaborating the causal pathways underlying medicine shortages.

Methode / Method

We performed a systematic review of the causes of non-vaccine, human medicine shortages between 2000 and December 2021 in accordance with PRISMA guidelines. Peer-reviewed literature was retrieved from PubMed, Scopus, Ebscohost and WoS. Included papers either explore the causes of medicine shortages or provide insights into the mechanisms linking individual causes. Causes extracted were grouped using inductive thematic analysis, and later positioned in reference to the classification of root causes by the European Single Point of Contact Network (SPOC). We graphically illustrate these causes and their underlying mechanisms in form of directed acyclic graphs using graph theory. The causal framework is provided as an online tool for self-exploration and use-case specific application.

Ergebnisse / Results

112 studies met our inclusion criteria, containing 100 causes of medicine shortages. Thematically, most studies highlight causes relating to manufacturing issues (87/112), commercial reasons (74/112), distribution issues (48/112) and demand-specific reasons (46/112). While manufacturing issues remain the main cause for medicine shortages during and before COVID-19, mentions of ‘unexpected demand spikes’ and ‘global dependencies’ as a reason for shortages increase twofold between pre- and during COVID-19 periods. In contrast, commercial issues are mentioned less frequently during the COVID-19 period. Among manufacturing issues, the access to raw materials and high supply-side concentrations are major causes leading to medicine shortages in North America and EU, while in the rest of the world distribution issues are more prevalent. Within the commercial issues category, low profitability and low prices remain the primary reason for medicine across regions. These causes remain central in the causal pathways we derive.

Zusammenfassung / Conclusion

We identify the individual causes, the causes of the causes, and outline detailed causal pathways leading to medicine shortages. This framework allows localising scope for policy intervention and informs scholars in refining identification strategies attempting causal analyses in the field.

AutorInnen

Jan Panhuysen, Hertie School

Eva Goetjes, Universität Duisburg Essen

Prof. Dr. Katharina Blankart, Universität Duisburg Essen

Prof. Dr. Mujaheed Shaikh, Hertie School

Einleitung / Introduction

Medicine shortages describe situations where medicine supply cannot meet demand at national level. Shortages potentially jeopardise target 3.8 of the Sustainable Development Goals, to ensure access to (essential) medicines for all. The COVID-19 pandemic has laid bare the multidimensional nature of shortages leading to unexpected changes in both, demand and supply of medicines. We investigate the impact of the global unexpected shock in medical supply during the COVID-19 pandemic on the incidence and prevalence of medicine shortages in Germany. We examine the role of global dependency and how regulatory interventions to contain pharmaceutical expenditure (i.e. local factors) exacerbate or mitigate medicine shortages.

Methode / Method

We combine a national medicine shortage repository with pharmaceutical reference data for information on market type, reference pricing and local competition of active ingredients. We consider 1,860 prescription-only active ingredients with marketing authorization in Germany between 2018 and 2021. Using European catalogues that document location of certified production sites and approval data of biopharmaceuticals from industry reports, we calculate a global dependency of 754 active ingredients weighing the number of producers by distance to the production site. We capture reference price status and market type (off- vs. on-patent markets) of the medicines. Using a sharp regression discontinuity in time design, we quantify the effect of a global supply and demand shock caused by the Covid-19 pandemic on medicine shortage incidence (i.e. number of options per month reported short), considering March 2020 as a starting point when global supply chains were interrupted.

Ergebnisse / Results

Across the observation period, shortages were reported for 394 active ingredients, 55.6% of which classified as essential medicines. Most active ingredients are available as different options by different producers. On average, 0.299 (sd 2.98) options of an active ingredient were short. We find a discontinuity in shortages at the cut-off in terms of reported shortages per month. During the global shock, the number of options reported short per active ingredient increased on average by 0.157 (p<0.001), 52.5% of the mean number of options reported short. Controlling for local factors such as market type, reference pricing and competition the effect increases to about 0.179 number of options reported short per active ingredient (p<0.05). For active ingredients with a high global dependency (n=377), the number of options reported short increases to about 0.383 (p<0.1).

Zusammenfassung / Conclusion

Global shocks on health systems and supply chains increase the likelihood of shortages especially for active ingredients with a high dependency on global production sites.

AutorInnen

Jan Panhuysen, Hertie School

Mujaheed Shaikh, Hertie School

Katharina Blankart, University Duisburg-Essen

Einleitung / Introduction

Given the potential of generic drugs to substantially reduce health care expenditures, policymakers have implemented various programs to promote and incentivize generic substitution. Nonetheless, the ultimate purchase decision over the specific prescription drug often rests with patients themselves. To study the little-known factors influencing these consumer choices, we analyze roughly 140 million prescription drug purchases by 1.8 million clients of the largest health insurer in Switzerland over a 10-year period. The Swiss context is particularly suited to investigate generic substitution as the regulatory setting allows us to differentiate several factors. We first analyze how drug price differentials, i.e., relative and absolute, influence patients' choices under different cost contribution schemes. Costs to patients solely depend on the accrued medical expenditures in the current year: a) full (until the yearly deductible is reached), b) partial (co-insurance rate of 10% until a further 700 CHF), c) none (after exceeding both the deductible and coinsurance). Additionally, the co-insurance rate rises to 20% for original drugs if at least three sufficiently cheaper generic alternatives exist. Our results indicate that out-of-pocket price savings (based on drug price differentials) play a surprisingly small role in explaining individual drug choices. Even given the financial incentives, patients need to be aware of generics and the reduced costs thereof. Within a subset of roughly 12 million claims of 30 active chemical substance groups, the health insurer has sent approximately 300,000 letters to clients after purchasing one of these 30 original drugs, informing them about of available generic alternatives and the lower prices thereof. The mostly random timing of when patients receive these letters allows us to study the causal impact of information in a quasi-experimental setting. We find that the likelihood of switching to a generic alternative sees a threefold increase after clients have received such a letter. This level shift is both immediate and permanent over subsequent purchases, indicating that patients do not revert to the original drug even once they have exceeded their yearly deductible. With the myriad of individual-, drug-, and provider-level factors that potentially influence generic drug substitution in interaction, we also make use of the recent advances in causal machine learning and our rich data set by implementing generalized random forests to identify complex heterogeneities in the purchase choices after being informed about generics. Our paper thus provides valuable insights for the design of incentive schemes attempting to promote generic drug uptake by patients, particularly the role of information provision.

AutorInnen

Linn Hjalmarsson, University of Bern & CSS Institute

Christian P.R. Schmid, CSS Institute & University of Bern