COVID-19 puts medicine supply security in Europe's spotlight

It's time to talk about what that really means

This article represents Teva’s view in relation to the proposed new European Commission Pharmaceutical strategy that will be published on 24 November 2020.

Adapting to life in a pandemic requires resolve, flexibility and a realisation that it won’t last for ever, even if it’s here for now. Although many people are experiencing COVID fatigue, we have also adapted to the reality we currently live in.

At Teva, resolve and flexibility have been central to our COVID response. As a manufacturer of essential medicines, we remain vigilant but optimistic that we can meet the challenges posed by any second wave.   This is in large part because we were able to get through the first one without any meaningful disruptions to production or supply, meaning patients were able to get their medicines when they needed them.   

For us, the challenge in Europe was less about supply and more about the allocation and management of demand.  For example, when non- EU manufacturing countries like India introduced export bans on essential active pharmaceutical ingredients such as paracetamol this further fuelled concerns over being able to meet demand.

This led to stories about shortages, even though it has been shown that the industry as a whole stepped up production capacity and in general, met the European demand.

Having a short supply chain in Europe helped, as did the enthusiasm and commitment of our Teva team.  Staff at our 31 manufacturing, research and development facilities across Europe worked around the clock to make sure we were producing enough medicines to meet the surge in demand, while caring for those who rely on us every day. Chronic and life-threatening conditions don’t disappear during a pandemic, and being able to ensure the ongoing supply of vital prescription medicines we provide to patients across Europe has been crucial in supporting healthcare systems as they battle against COVID-19.   

In Germany and Austria, our warehouse and distribution teams responded to a doubling of orders by changing their shift patterns, people came back early from their holidays and everyone from apprentices to managers took on extra work.

In Croatia, even an earthquake of magnitude 5.3 Mw hitting Zagreb, couldn’t stop our team. Affected production lines were repaired and restarted in record time, and a much-needed antiseptic was even developed and approved for local use – some of which is being donated to regional crisis and medical centres fighting COVID. And indeed, all of our factories across Europe continued to produce medicines at the same levels as they did prior to the pandemic.

Political attention in Europe has now understandably turned to security of supply for essential medicines both during and outside pandemics. The EU and various national governments are even talking of offering financial grants to medicine companies who re-shore their manufacturing operations back to Europe from China and the East.

From our perspective, this approach puts the cart before the horse because it ignores the reasons why many companies left in the first place and why other manufacturers might do something similar in the future. Let’s look at why we should shore up existing manufacturing in Europe before we talk about re-shoring from Asia.

At Teva, we’re proud of our contribution to the economy and wellbeing of Europe. We employ almost 20,000 people and contribute roughly $26bn to the GDP of 12 EU countries.  As a company we produce 93% of our EU medicines and 40% of their API in Europe, including generics which save EU healthcare systems more than $9bn a year in costs. At the same time, we are constantly working to lessen the impact of our manufacturing and daily operations on the environment.  That’s real value for the healthcare ecosystem.

To be in Europe for the long haul, we need to have an honest conversation with politicians about how to make the landscape we operate in more predictable and more sustainable for manufacturers. Some of these changes are simply about cutting bureaucracy, such as having more digital interactions between industry and regulators, or moving from paper to e-leaflets for medicine packets. Others involve having a frank conversation about long-term trade-offs between pricing and manufacturing investments that we need to decide on now, especially in the traditional generic sector. The current pricing model does not allow adjustments to reflect real changes in the cost of goods, manufacturing, regulatory procedures and/or distribution. It also fails to recognise investments to protect supply chains or green energy and technology. It is essential to design new pricing models in cooperation with policy makers and payers to systematically address the economic root causes responsible for medicines shortages and/or for driving production out of the EU.

At Teva we value our history in, and relationship with Europe. As a company we are committed but as a continent, we need to cherish our vital industries.