Medicines in short supply? How production could be brought to Europe
Feverfew for children, Tamoxifan as a breast cancer drug: supply bottlenecks for a wide range of medicines show the problems of dependence on Asia.
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SARS-CoV-2 brought home to us the fragility of global pharmaceutical production. To this day, supply bottlenecks are spreading. Whether it's the breast cancer drug Tamoxifen, fever juice for children, or now the stroke drug Actilyse - the shortage economy is new suffering for patients and pharmacists in the West. Supply chains, once just-in-time wheels of efficiency, now falter again and again. The cause is bottlenecks in the production chain. An active ingredient or a precursor sometimes comes from only one factory worldwide. If this factory cannot deliver, the global supply is in jeopardy.
If a bacterium were to trigger the next pandemic, the consequences would perhaps be even more devastating than during the current virus pandemic: those infected would need masses of antibiotics, worldwide. But 90 percent of antibiotics come from Asia. "We would have had an extremely difficult time covering our drug needs if it were possible that nothing could be exported from countries such as China and India when we had enormous domestic demand," says Matthias Braun, managing director of pharmaceutical production and manufacturing at Sanofi in Germany until May 2022. Global labor specialization and monopoly formation are one thing above all: profitable. Crisis-proof, on the other hand, they are definitely not. Against this backdrop, in the course of Germany's presidency of the EU Council in 2021, the then Federal Minister of Health, Jens Spahn, announced that the production of important pharmaceutical substances would be brought back to Europe.
Not much has happened since then. The production of pharmaceuticals has been shifting eastward for a long time and continues to do so inexorably. The number of producers in the EU has been shrinking for years. According to the German Institute for Economic Research, the number of pharmaceutical companies in China grew by 1.3 percent each year from 2010 to 2018. In Europe, including Switzerland, it shrank by 0.8 percent per year over the same period. Nearly all generic drugs, those medicines whose patents have expired and are sold cheaply, come from China and India. These drugs are basic medical care, such as preparations for fever, headaches and flu. Can such a trend, which is subject to the enormous driving forces of the market economy, be broken? Can pharmaceutical production be deglobalized?
The eastward drift of the pharmaceutical industry
The reasons for the migration of pharmaceutical production to Asia are trivial, as the example of the commonplace drug paracetamol shows: more than 15 years ago, Chinese manufacturers entered into nitrophenol production. Nitrophenol is toxic and suspected of being carcinogenic. As always, the environmental and occupational health and safety requirements for handling the chemical in China were unacceptably low compared with the EU, and so were wages. But nitrophenol is the basic substance from which paracetamol is made. European companies were quick to buy their nitrophenol cheaply and willingly in China, as this increased their own profit margins. Even today, the local pharmaceutical industry still says: "The profit is in the purchase. The only deciding factor is price; strategic and moral motives play practically no role. Since the production of paracetamol does not require any dedicated pharmaceutical expertise, but rather the molecule is manufactured on an industrial scale in two reaction steps, Chinese manufacturers soon began to produce the painkiller themselves.
"These people then systematically knocked European manufacturers out of the market with low prices and then raised prices," Sanofi manager Braun recounts. Of 120,000 metric tons of paracetamol required worldwide, two-thirds now comes from China and India. Turkey and the USA share the remaining capacity.
