The Chancellor is worried. In view of their otherwise rather stoic crisis communication, one should listen, even if it happens rather off the big federal political stage.
“With regard to India, we are now in a situation where we are concerned about the emergency situation there, that medicines are still coming to us”, quotes the portal “Politico” Angela Merkel (CDU) from a conversation with the EPP group in the EU Parliament, to which the CDU also belongs.
India – of all countries, which like to be called “pharmacy of the world” next to China, is experiencing a second corona wave, which even makes the pandmie-tired international community sit up and take notice. The 1.3 billion-inhabitant country currently records more than 300,000 new infections every day, and the official death toll per day is over 3,000. Even from the hospitals, people steal oxygen bottles in their distress in order to be able to breathe on sick relatives. The “pharmacy of the world” collapses – what a sad irony.
The EU is largely dependent on China and India
The very collapse described by the Chancellor in Brussels could well have consequences for the global community and Europe. Apart from China, India is one of the two major producers on the international pharmaceutical market. The geopolitical dimension is enormous, as the EU Parliament describes on its own website:
- 80 percent of the active pharmaceutical ingredients are produced in China and India
- 40 percent of the finished medicinal products sold in Europe come from China and India
- China and India account for 60 percent of the global production of paracetamol. With penincillin it is even 90 percent; with ibuprofen 50 percent
India’s share in the production of so-called generics, i.e. drug copies of drugs whose patent protection has expired, is particularly large. According to a study by the Association Pro Generika, around 41 percent of the corresponding active ingredients prescribed in Europe last year came from the subcontinent. With the region of Marahastra, the federal state in which the virus is currently raging most is regarded as the stronghold of production. In Germany alone, generics accounted for around 78 percent of the total drug supply in 2019. Francis Mascarenhas / REUTERS More than 300,000 people are currently infected with the coronavirus
Every day in India, it becomes clear in which dependency the industrial nations and thus also Europe are. “In the raw materials sector in particular, we have a strong reduction to a few production sites, primarily in China,” Morris Hosseini from the management consultancy Roland Berger also analyses in the FAZ.
For international pharmaceutical manufacturers, this means that, for example, the raw materials for later different antibiotic preparations may come from one and the same factory. In a 2018 study on the security of supply with antibiotics, Roland Berger describes Germany as a country “on the drip” of low-wage countries.
“We must not take this as a blueprint and rely on it that everything goes well next time”
“Of course, focusing on a producer is dangerous,” says Ulrike Holzgrabe, who teaches pharmacy at the University of Würzburg. As a result, supply chains would be vulnerable – both to the risk of natural disasters and technical failure. (Anzeige) Corona self – test for home-now on Amazon
Wolfgang Späth, CEO of Pro Generika e.V., also sees things in a similar way in October of last year, he said: Although there were no supply bottlenecks in Germany at the peak of the first COVID-19 wave, “this was an unprecedented effort, especially by generic companies. We must not take this as a blueprint and rely on the fact that everything will go well next time.”
What it can look like when things don’t go well and how fragile the international supply chains actually are was already shown in autumn 2016, when a major explosion occurred at a plant in Jinan, China. Because the antibiotic piperacillin is produced there, delivery difficulties occurred in many countries over several weeks and months.
India: The price indicates where production takes place
As in many other industries, the reason for outsourced production is above all the relentless price war among pharmaceutical manufacturers. As is so often the case, the one who can produce and buy most cheaply has an advantage: in India, for example.
Added to this is an industry-specific phenomenon. Common between health insurance companies and pharmaceutical companies are so-called discount contracts, which additionally fuel the price war. In this case, the manufacturer grants discounts to a health insurance company and in return receives a guarantee that the insured will be reimbursed exclusively for their own medication. Who produces cheaply, is therefore also here in the advantage.
There will be no quick solution
Meanwhile, the self-created dependency has suddenly caused a hectic pace in German politics as well. Even with the subject of protective masks, one in this country got to feel one’s immaturity unpleasantly. One had to think about “which instruments we can use to stimulate production and supply here in Europe again“, said Federal Health Minister Jens Spahn last October. But what measures could help?
A quick solution is unrealistic, believes pharmacy professor Holzgrabe, the interests between the individual groups are too different. The state, pharmaceutical industry and health insurance companies would first have to agree on whether and which drugs they want to produce in Germany or Europe. “Only when such a fundamental agreement exists can we move forward and possibly build up the appropriate infrastructure through incentives,” says Holzgrabe. However, she doesn’t sound really convinced.
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