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The Netherlands should increase the maximum price of generic drugs sold to Dutch patients to help ease medicine shortages, ABN AMRO said in a recent report.
In 2023, medicine shortages in the Netherlands increased by 51% compared to 2022. In 2023, there were 2,292 cases where patients were unable to get the medicine they needed, up from 1,514 in 2022.
The country’s Medicines Evaluation Committee (CGB) attributed 68% of the shortages to generic drugs, cheaper versions of branded medicines with the same active ingredients.
ABN AMRO, the Netherlands’ third-largest bank, believes that raising the prices of generic drugs rather than lowering them could increase the availability of these relatively cheap drugs in the country. “The large shortage of generic drugs is mainly due to the fact that drugs in neighboring countries are 25% more expensive,” Anja van Balen, a healthcare banker at ABN AMRO, wrote in a report. Report Address drug shortages.
Lower pricing factor
Van Baaren argues that because the Netherlands has a stricter price cap, countries such as Belgium and Germany are being given priority by suppliers as a result, suggesting the Netherlands should raise its maximum price for generic drugs to match those of other countries.
ABN Healthcare Economist David Bosher Such a measure would help alleviate medicine shortages in the Netherlands, as suppliers would be more willing to sell medicines in the Netherlands, Euractiv told.
“We’ve experienced supply chain disruptions where suppliers would prefer other countries over the Netherlands because prices are lower here,” Borscher said, noting that during these disruptions, Dutch patients were able to drive to Germany and Belgium, where they found the drugs they needed were still available.
However, a spokesperson for the EU Pharmaceutical Group (Prostaglandin E), an organisation representing community pharmacists in the European Union, told Euractiv they had no evidence that raising the price cap on generic medicines would help alleviate shortages.
From his perspective, Borscher acknowledges that lower pricing in the Netherlands is not the only factor at play.
“Health insurers should also stop or adjust preferential policies that tender to only one supplier. It is important to maintain multiple suppliers in case one supplier runs short,” Bolscher said. “(…) Some shortages are global. Therefore, it may be wise to have a policy covering the whole of Europe,” he added.
Raising the cost cap 170 million euros
Van Baaren estimates that the proposed increase in the price cap will cost 170 million euros. The Netherlands spent 54.8 billion euros on reimbursements as part of its basic health insurance scheme in 2023.
“The €170 million increase in expenses represents just 0.3% of costs. This increase will therefore have hardly any impact on the premiums paid by policyholders,” van Balen said.
However, Van Baaren warned that raising drug prices would not solve the entire problem as “there will always be temporary or structural shortages around the world.”
CBG reported that 849 products were withdrawn from the market last year, mainly for financial reasons, which ABN Amro interpreted as low drug prices and high financial risks for drug manufacturers.
The new cabinet, led by Prime Minister Dick Schauf, has pledged to increase health spending. However, Borscher said the spending would mainly be used to reduce health insurance premiums and reverse previous cuts in care for the elderly.
“I don’t see any increase for health insurers or drug budgets in general. However, the government is implementing additional measures to prevent drug shortages,” Borscher said. These include increasing drug stocks from six weeks to two months starting in January, and then again to two and a half months starting in July.
Asked whether Europe could benefit more from increasing production of needed drugs closer to home, Borscher said that was not a cost-effective option because Asian companies could produce needed drugs at low cost.
“Generic drug prices are already so low that European production cannot go beyond that level. However, it may be valuable to subsidize some of the production in Europe to avoid shortages. This would be necessary to prevent full-scale shortages when larger supply chain disruptions occur,” Bolscher said.
EU needs common definition
According to the PGEU, drug shortages can be caused by different economic, manufacturing or regulatory reasons, including the global nature of pharmaceutical manufacturing, changes in demand and pricing strategies.
The organization also highlighted the study The European Commission’s investigation showed that most reported medicine shortages appeared to be related to quality and manufacturing issues.
The PGEU calls for effective policy measures to enhance supply resilience and mitigate shortages, a PGEU spokesperson told Euractiv. These measures include developing a common definition of medicine shortages across the EU, allowing community pharmacists to find alternative treatments for patients, and optimizing European and national stock management through the gradual construction of rolling stocks.
(Author Christoph Schwaiger, editors Vasiliki Angouridi, Brian Maguire | Euractiv Advocacy Lab)
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