Without decisive government action, the reported medicine shortages in hospitals will only be the tip of the iceberg (Hospitals in England hit by shortages of common drugs such as paracetamol, 29 September). Medicine supply chains are complex and global, with multiple points of potential failure that are especially sensitive to geopolitical shocks. Brexit has made us even more vulnerable, as we no longer have access to EU medicine reserves, and cross-border logistics are further complicated.
Our research shows that these shortages tend to be concentrated in (off-patent) generic and biosimilar markets. It’s true that low prices for off-patent medicines are important in driving health system savings and promoting affordability. The problem is that when prices are driven an unsustainable low, manufacturers exit, leaving markets with too few suppliers and dangerously exposed to any supply disruption or demand spike. The NHS bears the cost when a shortage does occur, in the form of higher prices, expensive substitutes and a heavy staff burden in managing emergency procurement and, sometimes, rationing. Patients pay the highest price in delayed treatment and worse outcomes.
The government needs to weigh pricing controls against the costly damage that a drug shortage can cause. The answer lies in using regulatory, pricing and approval decisions to encourage competition and nurture supplier resilience. There is a critical balance between affordability and medicine security that needs to be struck.
Amanda Cole
Director, Office of Health Economics
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