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Supply reliability

Supply bottlenecks are a growing problem in Switzerland and all over the world. There are many reasons why they happen.

Bottlenecks in the medicines supply chain are a global problem. The globalisation of manufacturing and distribution systems results in production being concentrated in one or just a few locations. This has been a problem in the USA since the late 1990s. Supply bottlenecks are nothing new in Switzerland, but they are repeatedly attracting a lot of media attention. They are usually due to particular circumstances that generally have their origin in the countries where the products are manufactured.

The core of the problem is the globalisation of markets and the concentration of production at just a few companies, together with just-in-time supply chains and the associated decrease in the size of inventories held by the manufacturers and in the supply chain, e.g. wholesalers, hospitals, etc. Technical manufacturing problems such as stability or sterility issues can also lead to a temporarily restricted supply situation.

Generally increasing global demand can also result in bottlenecks, since production capacities cannot be adapted overnight; it takes years to bring a new production facility with complex operations on stream. One example is the manufacture of vaccines. Demand for vaccines is currently not only rising all over the world but is also very variable due to the changing spectrum of pathogens, new vaccination recommendations and pandemics.

Not all medicines are equally affected

Active substances that are manufactured in only a few facilities worldwide and older medicines that are off-patent or were authorised a long time ago are in a particularly exposed position. 95% of all supply bottlenecks occur with active ingredients whose patent has expired. Medicinal products that are still protected by a patent are less often affected by supply bottlenecks.

Many supply bottlenecks are annoying for patients but not critical. Sometimes the situation can be resolved simply by replacing an unavailable pack size with a different size, or by using a medicine from another company. A supply shortage, on the other hand, is a more serious problem. This arises if no therapeutic alternative is available and the supply of an entire product range is limited throughout the system.

Vaccines

Vaccines are manufactured by a limited number of companies that operate on a global basis. The complexity of the manufacturing process means that production can only be adapted over a very long period of time.

Vaccine manufacturers also have to cope with non-harmonised authorisation procedures and complex reimbursement processes.

Pharmaceutical manufacturers are required to report supply bottlenecks

Since early October 2015, pharmaceutical companies have been required to report a supply bottleneck if it persists for longer than two weeks. The process is overseen by the Federal Office for National Economic Supply (FONES). If a bottleneck is imminent, the FONES identifies alternatives in the form of generics or other types of treatment. The pharmaceutical industry co-sponsors the FONES reporting platform and has contributed constructively to the process from the outset.

Since supply bottlenecks are caused by different factors, there is no single approach capable of overcoming them. Immediate actions that can be taken include a quota system in the distribution chain to prevent stockpiling and the creation and updating of lists known as registries. Mandatory stores can be set up for medicinal products and active ingredients needed to treat rare or life-threatening diseases and for which no alternative is available. Mandatory stores are regulated in the National Economic Supply Act (NESA). In the past, they have ensured a supply of medicines during times of shortage on multiple occasions. If a medicinal product is needed urgently in Switzerland and is still available in another country, the product can be obtained by way of exception from the manufacturer or through a pharmacy in the original packaging intended for that country.

Further information

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Interpharma, the association of Switzerland’s research-based pharmaceutical industry, was founded in Basel in 1933.

Interpharma informs the public about issues that are important to the research-based pharmaceutical industry in Switzerland, including the pharma market in Switzerland, healthcare and biomedical research.

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