It is a fundamental sector in the health sector. It allows citizens-patients to have effective medicines at affordable prices, and hospitals to buy medicines at low cost. But that’s not all: its impact on employment growth has been significant – 1,100 units in the last 4 years, for a total of 9,550 employed.
Generics are good for the economy
Its production rises (+6 percent on 2019, +15 percent on 2018) and ensures that Italy is always on the podium of leaders in terms of number of companies and employees, closely followed by Germany and France. And yet, as Lucio Poma, chief economist of Nomisma and scientific coordinator of the Observatory on the “Generic drug system in Italy”, whose 2022 edition was presented today in Rome, recalled today, it is a sector in trouble, and which demands attention to the institutions.
Our health system? Serious and chronically ill. The Gimbe Plan in 14 points to save it
by Tina Simoniello
“Production is growing, it is true, but revenues remain constant. Having low-priced drugs is an advantage for the community, but it must not jeopardize companies”, explains Poma, illustrating the survey which involved a sample of 21 member companies of Egualia, which represents the generics, biosimilars and generics industry value added medicines in Italy.
A progressive erosion of marginality that has been going on for several years, and which is due to multiple factors. But which in this historical period, thanks to the pandemic (and post-pandemic growth), the energy crisis, the invasion of Ukraine and the consequent sanctions against the Russian Federation, has reached levels that are no longer sustainable.
Because costs are rising
The materials intended for packaging have a particular impact on the production costs of generic drugs, more than the active ingredients and excipients: glass, paper, aluminum, polyethylene, or what is needed for blisters, vials, bottles, leaflets. Aluminum, for example, costs 37 percent more today than a year ago, and 60 percent more than in 2019. Glass and plastic have increased by 9 percent.
The result is that with the same number of goods produced and resources used for production, the total production costs of generic drugs have grown by 21 percent compared to 2021, for a total of around 937 million euros. Not to mention – underlines the Nomisma study – the cost of transport, which has increased by 100 percent (the rental price of a container has increased by 131 percent between the first half of 2020 and the first half of 2022).
Complicating the picture is the extreme volatility of the market. “The price of gas can go up from 20 to 100 in one day”, continues Poma, “and not all companies have the possibility to work on inventories or have adequate capitalisation, which in these cases acts as a buffer against uncertainty “. In this panorama, companies are forced to move from an organization based on risk management to a system based on the management of uncertainty. Therefore, adds Poma, today we need support policies that help companies embark on a new organizational trajectory.
Made in Italy drugs to solve the lack of active ingredients
by Irma D’Aria
The competitions favor the big names
Another node of the sector is that which concerns the procedures for the purchase of equivalent medicines by hospitals through tenders. In 2021, the Report reads, the number of tenders announced increased and at the same time the number of lots announced decreased, which makes it more difficult for medium and small-sized companies to participate. And the rate of participation of companies in tenders is inversely correlated to the number of years that have elapsed since the patent expires: in other words, companies compete in the years immediately following the patent expiry, while they are less inclined to participate if the patent has long since expired. And this – adds Poma – puts the “biodiversity” of drug production at risk, and limits accessibility to drugs which, albeit of an “old generation”, are still widely used in clinical practice and, as demonstrated by the Covid emergency -19, can be essential in the management of emergencies and extraordinary situations.
“To protect the sector – remember Joseph Busia, president of the National Anti-Corruption Authority (ANAC) – which produces wealth for the country, it would be important to include corrective adjustments in contracts, especially long-term ones. Otherwise, the risk is that what has been negotiated will not be implemented or that the race will go deserted”.
Solutions are not just around the corner, above all because, as Busia points out, it is not enough to face the emergency, a long-term balance is needed.
Simplify to face the crisis
The sector’s proposals then primarily concern the adjustment of the price calculation criteria: according to the president of Egualia Enrique Häusermann, a 20% increase in the prices to the public of drugs under 5 euros would be necessary, which today is not sustainable since industrial point of view. But, adds Poma, support is also needed for the financial capacity of companies with the simplification of some authorization regulations in the production sector. And finally a “political” intervention by the State which takes up the characteristics of the Chips Act, launched by the EU Commission in February according to which State aid may be eligible in the case of intense technological innovation (chips) but also when the need for a good it is such as to fall “in the public interest”, as is the case with medicines.
“The quality and safety of medicines are fundamental for citizens and require robust, well-functioning international supply chains, also through the strengthening of domestic production. Because the shortage of medicines on the national territory – concludes Poma – is the most serious risk we already run in the short term, in the absence of ad hoc interventions by institutions and regulatory agencies”.
Drugs, the new EU rules: less bureaucracy and more chances for experimental doctors
by Beatrice Lorenzin
But be careful not to unload the crisis in the supply chain onto the shoulders of citizen-patients, whose wages are already being put to the test by inflation – he cautions however Beatrice Lorenzin, senator today in the Budget Commission. “On the other hand, it is necessary to make financing choices in terms of health, and to find solutions in which the state and the regions are committed to economic and regulatory policies to support companies in the sector”.