Market stimulation needed for predictable supply of antibiotics with vulnerable supply chains in Europe
– by Christine Årdal

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Many old but clinically useful antibiotics are increasingly unavailable across Europe.¹ These include narrow-spectrum penicillins, like phenoxymethylpenicillin (penicillin V) and pivmecillinam.

Unsurprisingly, European consumption of narrow-spectrum penicillins is declining.² This is a vicious cycle: Guidelines inform physician prescribing but generally only contain those antibiotics that are marketed. Suppliers withdraw antibiotics with unattractive revenues, which are then removed from guidelines. The end result is that these antibiotics become “forgotten”.

Yet in Scandinavian countries, narrow-spectrum penicillins are not forgotten; they are first-line therapies. Phenoxymethylpenicillin is Norway’s most consumed antibiotic, followed by pivmecillinam.³ Ensuring their accessibility is essential to maintain relatively low levels of antibiotic resistance in Norway. Therefore, the dwindling global market size of narrow-spectrum penicillins is a concern, combined with a perception that penicillin production occurs mostly in China and India.⁴

These concerns led Norwegian politicians to commission a report asking: does Norway need to produce older antibiotics to maintain reliable access?⁵ The findings are likely to be informative for many countries.

Without greater transparency, it is difficult to reach conclusions about Europe’s reliance on non-European producers. If partial self-sufficiency is a goal for Europe, the first step must be to keep existing European manufacturers in business.

Antibiotic production capacity in Europe

Europe appears to have significant antibiotic production capacity, both of active pharmaceutical ingredients (API) and finished products. There is no doubt that China and India produce considerable amounts of antibiotic intermediates, API and finished product; however, the literature does not distinguish between human and veterinary production, likely due to source limitations.^4,6

Since animals consume an estimated 70% of antibiotics globally,⁷ it is uncertain how reliant Europe is on China and India for antibiotics for human consumption. Europe and India import similar amounts of antibiotic API, indicating sizeable European finished product production.⁴

In regard to API production, Uppsala University extracted the geographic location of the API producer for 25 important antibiotic substances (translating to 204 specific medicines) from Swedish regulatory dossiers. They found that 27% were produced solely by European-based API producers, and an additional 31% had API producers registered both in Europe and outside Europe, i.e., 58% had warm European API manufacturing sites.⁵

Without greater transparency, it is difficult to reach conclusions about Europe’s reliance on non-European producers.⁸ If partial self-sufficiency is a goal for Europe, the first step must be to keep existing European manufacturers in business.

European producers face increasingly less attractive markets

Sandoz, a multinational generics producer with a manufacturing base in Austria, consistently reports negative growth for their anti-infectives, which include narrow-spectrum penicillins.⁹ Biotika, a Slovakian producer of narrow-spectrum antibiotic API, also reports negative growth.¹⁰ Yet, almost all European countries focus on driving down and maintaining low prices for essential antibiotics.

In Norway the maximum pharmacy purchase price for a common package of phenoxymethylpenicillin is less than a good cup of coffee.¹¹ This pricing pressure is especially detrimental for small markets, like pediatric formulations. A Swedish study found that when medicines had annual revenues of less than SEK 1 million (€ 90,000), these medicines were likely to be withdrawn from the Swedish market.¹² In the Norwegian report, out of 10 important pediatric formulations, only two had annual revenues over NOK 1 million (€ 90,000).⁵

Establishing a new antibiotic producer (including API) is extremely expensive, will require public subsidies, and will not ensure a reliable supply of essential antibiotics. Cost estimates to establish Norwegian production of penicillins ranged from NOK 500m to 11,000m (€ 45m to 1,000m), with the lower estimate excluding costs to qualify for marketing authorization.⁵ Even at the lowest estimate, public subsidies would be needed to entice companies to build such a factory. Public subsidies are generally illegal except when there is no supplier or if production is needed in case of public health emergencies.⁵ Both legal exceptions do not improve access to antibiotics used and needed daily: Firstly, in Norway’s case, narrow-spectrum penicillins are marketed, but their supply is fragile, and secondly, in the case of public health emergencies, stringent infection prevention and control measures are likely to be taken, similar to those implemented during COVID-19. In Norway, during COVID-19, both consumption and shortages of antibiotics decreased in 2020 and 2021.^3,5

Europe needs to pursue market-stimulating interventions to proactively create a robust supply of essential antibiotics.

Improving market conditions to create a robust supply is key

Denmark, Iceland, and Norway have formed a pooled procurement mechanism for hospital antibiotics, where tenders are awarded primarily based upon surety of supply, good environmental practices, and user preferences – price is weighted only 25% of the award criteria. At least two suppliers are selected (one for Denmark and Iceland and the other for Norway), allowing for supply redundancy, even in this small market with a combined population of less than 12 million.^5,13

The Norwegian-commissioned report recommended dropping price completely from the award criteria and instead using governmentally fixed procurement ceiling prices, anticipated to double revenues.⁵ For antibiotics used in the primary care sector, the report recommended pursuing annual revenue guarantees for select antibiotics, especially narrow-spectrum, pediatric formulations.⁵ This was seen as the only way to ensure that the company with the marketing authorization would receive increased revenues, otherwise the private pharmacy may absorb the additional margins.

Europe needs to pursue market-stimulating interventions to proactively create a robust supply of essential antibiotics

The second EU Joint Action on Antimicrobial Resistance and Healthcare-Associated Infections (EU-JAMRAI-2) aims to actively work with interested European countries and European bodies like The European Commission Directorate General for Health Emergency Preparedness and Response Authority (DG HERA) and the European Medicines Agency to improve access to specific generic antibiotics.

Each country will identify nationally important antibiotics with vulnerable supply chains (targeting narrow-spectrum antibiotics and child formulations) and focus on both improving physician knowledge (demand) as well as supply. EU-JAMRAI-2 will work with European suppliers to identify potential interventions such as standardization of strengths, package sizes, and package leaflets; mutual recognition of marketing authorizations; and/or transparency regarding abandoned dossiers that could be reinstated. EU-JAMRAI-2 is expected to start in early 2024 and will hopefully provide valuable learnings about how countries can stimulate markets to ensure a predictable supply of vulnerable antibiotics.

References

1. Pulcini C, Mohrs S, Beovic B, Gyssens I, Theuretzbacher U, Cars O, et al. (2017) Forgotten antibiotics: a follow-up inventory study in Europe, the USA, Canada and Australia. International journal of antimicrobial agents. 49(1):98-101.
2. Bruyndonckx R, Adriaenssens N, Hens N, Versporten A, Monnet DL, Molenberghs G, et al. (2021) Consumption of penicillins in the community, European Union/European Economic Area, 1997–2017. Journal of Antimicrobial Chemotherapy. 76(Supplement_2):ii14-ii21.
3. NORM/NORM-VET (2022) NORM/NORM-VET 2021: Usage of Antimicrobial Agents and Occurrence of Antimicrobial Resistance in Norway. Tromsø / Oslo.
4. Boston Consulting Group, Wellcome Trust (2021) Understanding the antibiotic manufacturing ecosystem: A view of global supply chains, pressure points, and implications for antimicrobial resistance response. London: Wellcome Trust
5. Helsedirektoratet (2022) Mulighetsstudie for antibiotikaproduksjon.
6. Bjerke L. (2022) Antibiotic geographies and access to medicines: Tracing the role of India’s pharmaceutical industry in global trade. Social Science & Medicine. 312:115386.
7. AMR Review (2015) Antimicrobials in agriculture and the environment: reducing unnecessary use and waste.
8. Årdal C, Baraldi E, Beyer P, Lacotte Y, Larsson DJ, Ploy M-C, et al. (2021) Supply chain transparency and the availability of essential medicines. Bulletin of the World Health Organization. 99(4):319.
9. Novartis (2023) Annual Report 2022.
10. Biotika a.s. Annual reports. Slovenská Ľupča; 2021. 
11. Norwegian Medicines Agency. (2023) Apocillin – 660 mg tablet – 20 unit package [Available from: https://www.legemiddelsok.no/.
12. The Swedish Dental and Pharmaceutical Benefits Agency (Tandvårds- och Läkemedelsförmansverket). (2017) Availability of antibiotics: Interim report 2 – Economic reimbursement models for new antibiotics and older prescription antibiotics (Tillgänglighet till antibiotika: Delrapport 2 – Ekonomiska ersättningsmodeller för nya antibiotika samt äldre förskrivningsantibiotika).  
13. Pettersen MS, Wangen AK (2022) Perceptions of non-price criteria in pharmaceutical tenders: A case study on the Norwegian market for generic antibiotics. Oslo: BI.