For Carmela Bocale and thousands of other Canadian breast-cancer patients, the drug tamoxifen is like an insurance policy.
Taken for five or more years after the initial treatment, it helps prevent the disease making an unwelcome reappearance.
So Bocale was taken aback when her pharmacist announced two weeks ago she could pick up just a fraction of her usual supply, and cited a widespread shortage of the medication.
“I was surprised, because you think that you don’t have to worry about this kind of thing,” said the retired human-resources professional from Regina. “You always think there’s going to be a supply.”
In fact, the tamoxifen scarcity is just the latest mini-crisis to underline what has become a chronic, perplexing problem in Canadian health care.
Close to 2,000 drugs are currently listed on Health Canada’s site as being in shortage, a problem that has recently also afflicted children with leukemia, Parkinson’s sufferers and depression patients.
Governments and industry typically blame a standard litany of production glitches: factory shutdowns, regulatory interventions and a dearth of raw ingredients.
But those reasons fail to explain some curious facts. Drug shortages suddenly emerged as a major issue only in 2010, they have not abated much since then and, rather than being a local Canadian issue, affect countries worldwide.
“People have forgotten that it wasn’t always there,” says Dr. Jackie Duffin, a hematologist and recently retired Queen’s University professor who has long tracked the problem. “It wasn’t like this 10 years ago. We didn’t have these problems. Why do we have them now?”
Industry experts and government and academic reports suggest some surprising, and seldom-discussed, root causes, many dating to the late 2000s, just before shortfalls became ubiquitous.
They include a dramatic pharmaceutical-industry consolidation, globalization of the medicine supply chain and a watershed drug scare in 2008.
It wasn’t like this 10 years ago. We didn’t have these problems. Why do we have them now?
Dr. Jackie Duffin
At the same time, governments and private-sector health organizations have been driving down the price of generic versions of medication. That deflation offers relief to ballooning health budgets, but can also curb the incentive for multiple suppliers to produce a given drug, providing a safety valve when one manufacturer has problems.
So one of those production hiccups can have huge consequences.
“In many cases, there are one or two plants that produce the world supply for a single drug,” says Barry Power of the Canadian Pharmacists Association. “When you only have one or maybe two manufacturing sources, they are much more vulnerable to disruptions.”
Expert reports in Canada and the U.S. have recommended that governments and private firms who procure drugs in bulk give credit to a maker’s ability to sustain supply – not just having the lowest price.
The “vast majority” of shortages involve medicines whose patents have expired — often long ago — allowing generic makers to compete, said Duffin. About 70 per cent of shortages involve actual generic companies, the rest the original brand-name manufacturer, her analysis concluded.
But where there were once numerous competitors turning out copies of a given off-patent drug or its raw ingredients, various factors have steadily shrunk that pool.
One is an escalating number of mergers and acquisitions in the industry. That concentration reached a peak in 2008 with 800 M&A deals, including 15 “megadeals” that included Roche Holding AG’s purchase of Genentech Inc. for US$47 billion, according to a 2017 study by Duke University business professors. The result is “fewer options for end customers,” Canada’s “multi-stakeholder” drug-shortage committee has said.
Health Canada, the FDA and other regulators, for instance, issued a recall on various brands of heart medicine last year that contained a tainted version of the drug valsartan. The raw ingredient for most came from a single producer in China.
Coupled with the growing concentration has been the same kind of manufacturing globalization that sees everything from cell phones to toys and clothes made in low-cost locales. An estimated 80 per cent of the raw ingredients of the world’s drugs are made in China and India.
The drug supply chain is “longer, more complex and fragmented,” making it tougher to respond to a production disruption, noted a recent U.S. Food and Drug Administration (FDA) report.
And then there was another milestone event that occurred in 2008, two years before shortages became a hot issue.
The United States was rocked by tainted versions of the heart drug heparin, traced to a factory used by manufacturer Baxter International Inc. in China. More than 80 patients died. The scandal prompted the FDA to step up previously rare inspections of foreign drug suppliers. It was a welcome change, but more inspections mean more disruptions to address troubles — and more shortages.
When regulators find a problem and a company has to curb or shut down production to fix it, the impact “cascades in a domino effect throughout the global supply chain, affecting many countries and many end users,” said the Canadian multi-stakeholder group.
“If you can draw a direct line between the opioid crisis and Oxycontin, you can draw a direct line between heparin and drug shortages,” said one generic-industry insider, not authorized to speak on the record.
Underlying all those root causes may be the most visible trend in the industry, a precipitous drop in the price of generic drugs in many countries. With Canadian provinces either mandating or negotiating prices that can be as low as 10 per cent of the brand version, the cost of generics overall fell by 60 per cent from 2007 to 2018, according to Ottawa’s Patented Medicine Price Review Board.
The trend is mirrored in the U.S., where a handful of private-sector “group purchasing organizations” have similarly used their leverage to make generics cheaper. The pricing “race to the bottom” provides little incentive for firms to produce low-profit medicines and is “root cause 1” for drug shortages, concluded that FDA report.
“We carried products that were losing money for a long time,” notes Jordan Berman, a spokesman for Canadian generic giant Apotex. “Companies leave the market because they can’t afford to make products at a loss.”
Tamoxifen may be a clear illustration.
When the brand version came out in 1985, it sold for $2.88 per 10 mg. tablet in current dollars, according to an analysis by Duffin. Today, it goes for 17 cents a pill.
After the patent lapsed, as many as 11 companies once produced the drug, but most have dropped out, leaving only three Canadian suppliers.
The pricing ‘race to the bottom’ provides little incentive for firms to produce low-profit medicines and is ‘root cause 1’ for drug shortages
The shortage began when the largest of them, Apotex, decided to change its manufacturing and formulation process at an Ontario-based plant, said Berman.
It supplies two thirds of the market, and the other two makers, fellow generic Teva and brand-name producer Astra Zeneca, couldn’t fill the temporary gap.
The shortage is already resolving itself, with Apotex ramping up production again this week. Bocale says she has not had to miss a dose of Tamoxifen, but realizes now that such a disruption is quite possible.
“If I go to the cancer clinic in a month and they say ‘We’re totally out,’ I would hope there is a plan B for me,” she says. “Because I can’t go without something.”