A lot of ingredients for all kinds of drugs come from China and India, says Christian, who has spearheaded the development of a supply-chain monitoring tool for the U.S. Pharmacopeia. He has found that 41% of drugs’ key starting materials are made solely in China, meaning that the health of people around the world relies on Chinese companies continuing to make and provide those ingredients.
What’s the way forward?
At the moment, hospitals “are heavily incentivized to find any drug that is the cheapest upfront cost,” says Christian. “But there’s no real mechanism for hospitals to pay more to ensure greater resilience.” As the shortages prove, these drugs aren’t products where market dynamics lead to a consistent, reliable manufacturing system. “They should be cheap and high-quality,” says Scholtes. “They are essential.”
Generic drugs in general should be like water coming from the tap, he says. It’s a model that inspired a group of U.S. health systems to start a non-profit, U.S.-based drug manufacturer in 2018, which Scholtes, who co-authored a paper about it, calls a “health care utility.” The company, called Civica, is based in Petersburg, Va. and capable of manufacturing a small handful of generic drugs in a U.S. facility and ensuring consistent supply at a sustainable cost. But currently, Civica only produces certain medications—not including chemotherapy drugs. Few companies have similar models and missions, but one, called Phlow Pharmaceuticals, was founded in 2020 to produce active ingredients for drugs in the U.S. in order to mitigate reliance on overseas sources.
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