The market breakdown in antibiotics is far worse than Lex indicates (“Big Pharma/antibiotics: bug bears”, March 29). Lex points to some high-profile victims, the developers of new classes of antibiotics, that see their contribution to fighting antibiotic resistance market rewarded by a collapse of their market cap upon approval from the Food and Drug Administration; but equally hit by an ineffective market are the off-patent injectable generics.
Penicillins and cephalosporins, the first line of defence in every medical doctor’s arsenal, have been plagued for years by shortages not only in the US but across Europe. Low-cost producers from Asia undercut traditional quality western injectable manufacturers, while regulatory requirements escalate inexorably and inspectors shut down plants. Rapidly evolving quality standards now demand more than two quality assurance specialists for every one qualified production operator. Some 99 per cent of producers use outdated manufacturing equipment but years of razor-thin margins do not allow retooling.
Once a medicine has generic versions approved by a regulator they all become perfectly interchangeable, indeed irrespective of reality they all are certified equivalent by the regulator. The lowest cost producer remains the leader, often with its capacity maxed out, but only so long as FDA does not shut it down for the very same non-compliance issues that gave it the lowest cost position in the first place — shortages ensue. Are patients left to die? No, hospitals find alternatives, but only after the shortages has played havoc with their treatment protocols and formularies, at significant cost.
To address this penny-wise, pound-foolish cycle of destruction, US hospitals representing 25 per cent of US hospital beds joined forces in 2018 and founded Civica Rx, the first not-for-profit generics company, to bring some order to this supply chain and pay a fair price for a good product that is difficult to make. Civica offers 10-year deals for half their needs and will anchor a low but viable market price.
Patients need two things: action by regulators and responsible companies. Can Lex please put up a big billboard saying “Private equity investors not welcome” — this is not a business that benefits from hot money seeking quick exits.
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