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Editorial: Considerations in a Global Pharmaceutical System
As we (the U.S.) are dependent upon other countries for active pharmaceutical ingredients (APIs), we need to be aware of some inherent problems, a few of which are discussed in this newsletter, that are associated with this situation.
First, if there is a political disagreement between the countries of the provider and the purchaser, the provider may not be able to "sell" to the "purchaser" for political reasons. This would leave the country purchasing the APIs without the needed medication.
Second, there may be a situation when sanctions are placed upon a provider country and the purchaser cannot order and receive the APIs to produce their medications.
Third, since many people in some countries receive their health care, including pharmaceuticals, from their government, when the government has severe budget problems and drops the prices they are willing to pay for pharmaceuticals to help balance the budget, the company simply stops selling to the buyer country. This is the case in Greece, where it was reported this past week that the government was not willing to pay the price for insulin that was required by patients with diabetes. It isn't that the company necessarily wants to stop selling to Greece; it is that the lower price the government is willing to pay because of the economic conditions is lower than the price at which the seller is willing to sell for. Consequently, they choose to not sell their product rather than sell at a loss. This may put patients with diabetes that live in Greece in a very dangerous situation.
Fourth, quality issues may surface and quality standards may not be met. For example, many providers sell different quality levels of drug substances to different purchasers/countries, and the price difference may be such that the seller prefers to sell the lower-quality drug substance at lower prices and may not wish to do the additional work required to produce higher-quality APIs.
Fifth, one may not always know the "actual owners" of a company, or they may not always know the actual company that does the synthesis of the APIs since there may be numerous "middle-men" or brokerage firms involved.
Sixth, many companies stopped synthesizing APIs here in the U.S. because of the increased OSHA and EPA standards and the fact that it can be done less expensively in other countries with less personnel costs and issues. However, what happens when these countries start increasing their prices and we no longer can source the API from other providers?
The U.S. has about 70% to 80% of their APIs synthesized in other countries (primarily China and India), which is potentially a dangerous situation. Maybe it's time that U.S. companies started looking at what it would take to bring this industry back home so that the U.S. manufactures its APIs instead of importing them.
Loyd V. Allen, Jr., PhD, RPh
Editor-in-Chief
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