Yacine Sellam, president of the Algerian Society for Regulatory Affairs & Pharmacoeconomics, examines Algeria’s recent issues around medicine shortages, its root causes, and the measure being taken to counter it.
The smooth operation of the drug distribution chain in Algeria is compromised by its multiplicity of actors – from individual firms to the various ministerial departments and agencies involved in pricing, quantities, stocks and labelling
The Algerian National Union of Community Pharmacists (SNAPO) has reported 244 drugs to be out of stock in the country. The issue of drug shortages is also prevalent elsewhere, with 652 drugs having recently been declared to be in shortage in France in at least five percent of pharmacies. Attempting to remedy the issue in Algeria, on April 25 2019, the Algerian Competition Council released a sector study report on the competitiveness of the Algerian medicine for human use market.
This report has been expected since 2015, when the study was initiated by the Competition Council in accordance with its advisory missions. In 2018, the study benefited from an EU program in support of the implementation of the Algeria-EU Trade Association Agreement, through the assistance of three international experts specialized in competition law and market analysis. Coincidentally, April 25 also saw the release of the 2019 edition of the US Trade Representative (USTR)’s Special Report 301, which highlights the measures taken by Algeria to ban the import of certain drugs which can be manufactured locally. The USTR interprets these measures as a denial of “fair” market access to US intellectual property right holders.
The conclusion of the Competition Council’s report emphasizes the importance of the pharmaceutical market in Algeria, the largest in Africa, which benefits from political willingness to encourage its development via greater domestic production (which covered 55 percent of needs in value in 2018). There is no definition for a medicine “shortage” in Algerian regulation (in France a medicine shortage is defined as being the inability to dispense a drug to a patient within 72 hours), but the Competition Council’s report put particular emphasis on ensuring the smooth operation of the drug distribution chain, both in the hospital market managed by the Central Pharmacy for Hospitals (PCH) and in the city market supplied by wholesaler-distributors.
The smooth operation of the drug distribution chain in Algeria is compromised by its multiplicity of actors – from individual firms to the various ministerial departments and agencies involved in pricing, quantities, stocks and labelling. There are even doubts as to the true number and nature of such actors, with 634 wholesalers registered as such but only 120 actually operating in wholesale distribution. The resulting complexity is making it difficult for the Ministry of Health to establish a robust real-time information system for monitoring the quantities available throughout the distribution chain across Algeria. As a result, the expected impact of decisions taken to address supply tensions (for example, by signing amendments to import programs) is not always forthcoming, given the late detection of these tensions, when they are not recurring from year to year.
In addition, there is the continuous quantitative and qualitative evolution of needs common to drug markets worldwide (population growth, epidemiological evolution, changing prescriptions, the advent of innovative products, etc.), which is leading to decisions being made in uncertainty (a problem to which the great management schools can only provide partial solutions). These decisions must be continuously reviewed and corrected to adapt to each new situation. The reasons for the supply shortage are indeed multiple, for example the globalization of production (a single factory for the whole world) and the demand; the prioritization of sales, in the event of limited availability, to countries with the most advantageous prices or with the most severe penalties; a sudden increase in demand (new therapeutic recommendations, or switching prescriptions of one drug to another); and lastly, difficulties related to production such as insufficient production capacity, incapacity or delay in production, lack of raw materials (responsible for 17 percent of shortages in France according to the National Agency for the Safety of Medicines (ANSM)), or a deficiency in medicine quality that may lead to the suspension of production.
From this perspective, the press conference organized at the headquarters of the Ministry of Health, Population and Hospital Reform in Algiers on May 2, 2019, on the question of the medicine “shortage”, in addition to recognizing a real fact, was an opportunity to announce flagship curative measures. These include weekly meetings with the watch committee (installed on January 10, 2018) until the end of all market disruptions, as well as the revision of the deadlines for the submission of the annual import forecast programs set for July 31, 2019 (instead of October 2019) for the 2020 exercise, with a target release date before November 2019. These measures aim to allow better scheduling of production and shipments to Algeria. For the 2019 exercise, the finalization of programs releasing (probably that of the latest import programs) was announced via the official press agency on April 2 2019.”
Other preventive measures were also announced, including the obligation for domestic producers to ensure the availability of essential medicines within three months of their production (their list is yet to be defined in Algeria). In case these medicines are not made available within this time period, supplementary import programs will be resorted to (this will even be made possible in the event of a total import ban, as provided for in Article 3 of the July 9, 2015 Order), as well as coercive measures for defective producers in the same way as for “importers” who do not honor their commitments. In addition, the principle of revising the “very low” prices of some locally produced medicines in order to dissuade producers from abandoning them because of negative margins has been proposed. The National Union of Pharmaceutical Operators (UNOP) exposed this problem during an event organized on March 5, 2019, supported by a comparative study of the selling prices which remained the lowest among the countries usually benchmarked by the authorities.
Finally, another decision taken on the same day (i.e. on May 2, 2019), but this time during the Government meeting, was the adoption of a draft Executive Decree setting out the missions, the organization and the functioning of The National Agency for Pharmaceutical Products (ANPP) which is expected to play a role in the regulation and organization of the pharmaceutical market, while preventing any “shortage” of medicines, especially those for chronic diseases. On the same topic, the Competition Council recommended, in its sector study report on the competitiveness of the medicines market, the allocation of the necessary financial, human and material resources to the ANPP to enable it to regulate pharmaceutical activity effectively, as well as the clarification of its missions to avoid overlaps with those of the Ministry of Health. The term “regulation” should also be clearly defined in this context, because if we refer to Article 3 of Ordinance 03-03, it also consists of “strengthening and guaranteeing the balance of market forces and free competition”. In this respect, it is not envisaged that the aforementioned agency will replace the Competition Council, particularly when it comes to eliminating all unjustified barriers to market access, or to instructing and sanctioning speculative practices in the medicines distribution chain that could lead to shortage situations.
Original article (in French) published in El Watan newspaper on May 12th, 2019: https://www.elwatan.com/