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Researchers suggest that increasing political commitment to provide universal health coverage can drive the production of falsified or substandard medicines. The problem of substandard and falsified medicines can harm people’s health and contribute to antimicrobial resistance, which was recently discussed at the World Health Summit, where experts deliberated the legislative and technological approaches to stopping the procurement and distribution of these products.

We interviewed first author of the study, Elizabeth Pisani, King’s College London, UK to find out more about the drivers for poor quality medicines and the actions that can be taken to protect medicine quality, and thereby public health.

Increasing political commitment to the provision of universal health coverage can drive the production of falsified or substandard medicines, according to research published in Wellcome Open Research.

The study by King’s College London and Erasmus University of Rotterdam, and funded by Wellcome and Erasmus University, found that poor quality medicines are often created where the political aspiration to provide more medicines to more people outstrips the available budget. Very broadly speaking, as governments pick up more of the tab for medicines, they work harder to push prices down, which in turn squeezes down profits for pharmaceutical companies.

In order to protect their profits, pharmaceutical companies cut costs, which can threaten the quality of medicines either through buying cheaper ingredients, switching packaging, or reducing quality assurance measures. They also pull unprofitable products off the market. This leads to shortages, drives consumers out of the regulated supply chain, and creates market opportunities for medicine falsifiers.

“We figured that poor quality medicines wouldn’t exist if there were no market for them, so we considered the economic incentives” says first author, Elizabeth Pisani, King’s College London, UK.

“If prices go too low, pharma companies may start to cut corners in ways that threaten quality. Of course, efforts to achieve Universal Health Care are accompanied by consolidated public procurement, then the state has a lot of power as a buyer. In some countries, they have used that power to push quality standards up. But to do that, the government must be prepared to invest financially in product regulation, while it must expend political capital on regulating the market, often in the face of strong opposition from pharma companies.”

Much of the current discourse about medicine quality focuses on strengthening the capacity of national regulatory agencies to oversee the production or import of medicine products, and their distribution. Certainly, well-resourced national medicine regulators are critical in assuring product quality. However, the group’s analysis revealed that many policies far beyond the reach of the medicine regulator contribute to shaping the market for medicines, sometimes incentivising the production or import and sale of substandard or falsified products.

“We found that unless quality is explicitly included in pricing and procurement policies, downward price pressures can actively incentivise the production of substandard medicines and facilitate degradation. No country can hope to achieve sustainable, effective UHC without quality-assured generic products, yet low-profit-margin generic products are especially vulnerable to corner-cutting in response to price pressures.”

The research group used empirical case studies and review of secondary literature to develop a ‘market risk’ analytic framework which predicts the effects of political policies and can help guide national plans to prevent, detect and respond to substandard and falsified medical products.

The framework is built on a literature review followed by comparative analysis of in-depth interviews in four diverse middle-income countries: China, Indonesia, Turkey and Romania. Manufacturers, distributors, insurers, pharmacists, doctors, patients, regulators and other informants were interviewed to examine economic pressures from production of medicines right through to consumption.

All four countries have sizeable domestic pharmaceutical industries and governments committed to achieving or sustaining universal health care. Though they differ in many ways, the researchers found common threads between them: cost-cutting in response to price pressures on producers, and profit-seeking by the pharmaceutical and health-care industries, which drives shortages in the market and irrational demand for high-priced products.

Elizabeth continued: “Medicine markets are incredibly complicated. There are so many things at play, such as disease profile, market size and regulatory requirements. So, by understanding what drives the making, selling or buying of substandard medicines, we can begin to predict which products are most likely to be fakes, and which are most likely to be substandard.”

The World Health Organization has reported the growing number of cases of fake and substandard medicines in the past two decades. The global health body estimates between 10 and 20 percent of anti-infective medicines in low- and middle-income countries could be substandard or falsified.