The Ukraine war and Covid pandemic exposed the fragility of two supply chains that we depend on for our survival: energy and medicine. Only energy is still being treated as an issue of national security.
Biologic treatments are among the most effective and innovative fields of medicine today, but access to manufacturing facilities in Europe is limited and biologics are technically hard to make, requiring the use of overseas plant and resources. A lack of domestic manufacturing capacity is therefore a major obstacle to greater healthcare independence, and leaves us more exposed to the price spikes and disruptions that are associated with over-reliance on politically volatile or far-flung parts of the world.
Forgotten lessons of the pandemic
Restrictions on flows of Russian gas in 2022 illustrated the economic risks we run by relying on a dictatorial regime for our energy needs. In the health sector, the Covid pandemic exposed different but equally important supply chain fragilities. Attempts at international co-ordination soon gave way to a national scramble for scarce medical supplies. Both crises resulted in dramatic price rises.
Despite these experiences, European procurement policies have not been adjusted to enable new technologies to mitigate the potentially existential risks that fragile international supply chains can present to the provision of essential medical treatments. Nor can procurement policies take advantage of the patent expiry of key biologics.
Biologics are large molecules such as recombinant proteins and peptides. They play an increasingly significant role in formulary of medicines and often provide the leading treatment for many serious health conditions. Original biologics in any class tend to be quite expensive however, and public health bodies have tough spending decisions to make based on independent cost/benefit analysis. This often limits access.
Tenders have unintended security consequences
Producers who participate in public tenders are required to prove they have reliable access to the necessary manufacturing capacity. When such manufacturing plant is expensive and in short supply this approach to ‘security of supply’ can unintentionally discourage competition. It serves to entrench the market dominance of large incumbents and maintain elevated prices for treatments. It can also make these treatments unaffordable to entire lower-income countries, while doing little to encourage healthcare independence.
To meet security of supply requirements, bidders have to own or secure access to the necessary scale of manufacturing plant – which are overseas. Paradoxically this reduces security of supply in the longer term.
How can biosimilars help security of supply?
Fortunately, there is a potential solution to this security of supply predicament: new technology being applied to biosimilars.
Biosimilars are generic versions of biologics that deliver bioequivalence – in other words, sufficiently similar molecules to the original product. As soon as the patent for the original ‘reference’ biologic expires, biosimilars can enter the market and compete on price, driving down costs.
Recently, new Quantitative Trait Loci (QTL) technology is enabling biosimilars to be reliably manufactured at scale in a way that is tailored to specific markets, using far less plant than conventional methods. This is significant for national health security because it could make domestic manufacture of biologics more viable.
This new generation of biosimilars can also be better placed to circumvent the patent ‘thickets’ that incumbent producers often deploy to extend their effective monopolies. Introducing a more innovation-friendly procurement policy could therefore improve and accelerate public access to key treatments while reducing pressure on the public purse – all good news for national health security.
Reforming the European tender process
Over the coming decade many important but costly biologic medicines will reach patent expiry, opening the way for biosimilars and other innovative products to compete on price and volume. Who tenders on what terms and at what price will impact both the quality of our healthcare and its sustainability in terms of costs for the taxpayer.
Policymakers need to create an encouraging environment for domestic manufacture and supply if European patients are to feel the full benefits of QTL-enabled customised biosimilars. If not, they must accept the risks associated with reliance on potentially vulnerable international supply chains for critical medicines, and the prospect of higher costs.
Health security deserves priority
Energy security is currently a high priority for policymakers, forcing difficult but necessary political decisions that strike a balance between our commitment to Net Zero and the certainty of supply that derives from domestic oil and gas exploration.
To avoid another supply chain crisis when the next pandemic hits – which many experts agree is inevitable at some point – policymakers should pay equal attention to health security. That too will require difficult but necessary political compromises between the interests of public health and the vested interests of incumbent biologic producers who might prefer the status quo.