Drug shortages and impact on health outcomes: Is it only the tip of the iceberg?

While the economic factor has contributed significantly to the shortages being experienced now, underlying factors that were there prior to the economic downturn and which are still there, contribute to shortages of drugs and medical supplies 

“On the night of April 14, 1912, though, only a few days into the Titanic’s maiden voyage, its Achilles’ heel was exposed. The ship wasn’t nimble enough to avoid an iceberg that lookouts spotted (the only way to detect icebergs at the time) at the last minute in the darkness. As the ice bumped along its starboard side, it punched holes in the ship’s steel plates, flooding six compartments. In a little over two hours, the Titanic filled with water and sank” – ‘The Secret of How the Titanic Sank’ by Justin Ewers

Although the mystery surrounding the sinking of the Titanic is yet to be fully unravelled, logically, the fact that the extent of the iceberg below the water and which was not visible, compared to what was above the surface, and the underestimation of or not knowing the extent below the surface was the primary cause for the sinking cannot be denied or disputed. 

This article attempts to present a point of view that the current drug shortages arising from possible shortfalls in funding maybe likened to the tip of an iceberg, where in fact, underlying medical supply chain issues, the part of the iceberg below the surface, could be a very significant contributor to the shortages.

Health outcomes will get affected whenever critical drugs are out of stock or in short supply. However, even prior to the COVID invasion and the global economic and health destabilisation it caused, medicine and medical supply shortages have been a common occurrence in most developing countries. Sri Lanka was no exception and no doubt experienced this although such situations did not attract headlines in the media and politicians did not raise this as a critical issue that affects health outcomes, except when it suited them do so for political gain.

International agencies including the WHO, ADB, Global Fund, World Bank, and development entities like USAID, UK AID, Australian AID, spend considerable amounts of funds to address this issue in developing countries. The emphasis of such donor funded programs is to strengthen health systems while in some instances, material assistance is provided for some commodities to overcome acute situations that would otherwise exacerbate health outcomes. 

For example, the Global Fund is a leading international entity that supports health systems strengthening while providing financial assistance for procuring drugs needed for Malaria, TB and HIV AIDS patients. Other agencies also provide similar support to a lesser or greater degree and based on country needs and their willingness to address common reasons that result in drug and medical supply shortages. Such reasons are manifold. Systemic, structural, shortfalls in funding and capacity issues are commonplace in many countries, and the lack of a strategic approach arising from SWOT analysis (strengths, weaknesses, opportunities and threats) is often not considered as a necessity as it is not understood or misunderstood or ignored in favour of short-term stop gap measures. 

A common thread also weaves around the system and its shortcomings, that being the corruption element prevalent in these countries. Perversely, the “opportunities” component in a SWOT analysis becomes the opportunity that a systemic failure provides for corrupt activity. In this context, one does not have to be an Einstein to understand that corruption feeds on systemic shortcomings and therefore addressing such shortcomings would be counterproductive and detrimental to those engaged in corruption. This is one of the reasons why some influential figures within many dysfunctional country systems do not want shortcomings addressed as they benefit personally within such dysfunctional systems through corrupt activity. 

Fundamentally, shortages are often the creation of those who stand to benefit from them, such as emergency procurement at exorbitant prices by doing away with standard procurement procedures on account of the “emergency”. Contrary to the belief that these activities are in the domain of relative small timers in the system, the long arm of corruption extends very far, and to senior officials and ministers or even more highly placed politicians. 

Development partners naturally would not go into these areas and to act as spies or policemen and policewomen to expose corruption. Their task would be to carry out SWOT analysis of existing systems, structures, capacity issues, resource issues, and to submit their assessments and findings and submit recommendations as to how gaps identified may be addressed.

No doubt such assessments may have been carried out in Sri Lanka, and efforts taken to address gaps that may have been identified. However, some doubts exist whether adequate attention has been given to the overall systemic, structural, and capacity issues considering the misconception that the current headline grabbing publicity about drugs and medical supply shortages have all been entirely consequential to the current economic crisis and the resulting lack of funds to procure these items. 

Sri Lanka has a mixed system of public and private sector stakeholder participation in the drugs and medical supplies importation and local manufacture to serve the needs of the public. 

Going back in history, in 1972, the government of Sirimavo Bandaranaike entrusted the task of reforming the pharmaceutical policy of Sri Lanka to Pharmacologist Professor Senaka Bibile and Parliamentarian Dr. S.A. Wickremasinghe, and consequently, far reaching reforms were introduced including the rationalisation of the drug formulary from some 3,000 plus items (many brands of the same item) to less than 700, introduction of the ABC classification to identify essential items (lifesaving and mostly without alternatives), important items (with availability of at least a few alternatives) and less important drugs (with several alternative formulations), the formation of the State Pharmaceuticals Corporation (SPC) and assigning the task of undertaking all imports of pharmaceuticals, both for the State and private sector, to the SPC and a quality assurance process under an institution for all imports of drugs. A State-sponsored local manufacturing program was commenced by the SPC, and this was the precursor to the State Pharmaceuticals Manufacturing Corporation in (SPMC) in later years.

Professor Bibile died under mysterious circumstances in 1977 while on a mission to introduce his policies in the Caribbean through UNCTAD. Despite this setback, his policies however internationalised and over the years, and institutions like the WHO have adopted many of his policies. 

In Sri Lanka much of Professor Bibile’s policies have been reversed since the advent of the open economy policies of the government elected in 1977, and once again, the private sector has become a large scale of importer of drugs today with questionable drug quality assurance processes, and a proliferation of brands of the same generic drug. Although the State sector is supplied primarily by the SPC and the SPMC, it is no secret that it has had funding issues to procure its requirements, and it has, time and again, resorted to directing patients who patronise public hospitals to obtain their drug requirements from the private sector.

Clearly, besides policy dilution over the years, structural issues, logistics issues, capacity issues, forecasting and quantification issues, and of course corrupt activities, have impacted on the overall system. While the economic factor has contributed significantly to the shortages being experienced now, underlying factors that were there prior to the economic downturn and which are still there, contribute to shortages of drugs and medical supplies. This is particularly so in the public sector.

While urgent funding is required to source drugs, particularly the A and B types of items, pouring more money into a system that is dysfunctional to lesser or greater extents in different State institutions, will not address a recurrence of shortages, and an avoidance of shortages, in a consistent manner.

Globally, the pharmaceutical industry (or as some refer to it, the “pharmaceutical mafia”), is a very powerful industry and a very powerful lobby group. Internationally, the pharmaceutical industry is rated as the second biggest one in the world next to the arms industry, and it wields considerable power and influence over governance issues. (Note; as per the link noted here, the world pharmaceutical market was worth an estimated $ 1.2 trillion at ex-factory prices in 2020: https://www.businesswire.com/news/home/20220314005621/en/Global-Pharmaceuticals-Industry-2021-2022-and-Beyond---Huge-Opportunities-in-Precision-and-Genomic-Medicine---ResearchAndMarkets.com).

Sri Lanka is not immune to the power of this industry considering the reversal of far-reaching policy and process reforms introduced during the time of Professor Senaka Bibile.

Essential drug shortages will have an impact on health outcomes, and it is therefore important to address such shortages with an adequate supply of such items. However, this could be just a short-term band aid solution unless a thorough assessment is done of the medical supply chain in Sri Lanka to identify gaps in it, and then find effective and efficient mechanisms to address any such gaps.

Firstly, as a structural issue, pharmaceutical policy settings related to rational use, importation and manufacture will have to be reviewed. While health outcomes of the public should be key objective in determining policy settings, the efficacy and efficiency of the existing policy in the context of Sri Lanka’s economy also needs to be a priority consideration in any assessment of the medical supply chain.  

One of the factors that drove Professor Bibile’s policy perspective on drug rationalisation would have been the questionable need for a plethora of brands of the same drug, and the need for several pharmacologically similar drugs to be in the drug formulary in relation to the objective of health outcomes. 

Perhaps a relook at drug rationalisation and the drug formulary maybe timely to assess the efficacy of the current policy in a general sense, and specifically on account of the economic challenges faced by the country. Considering that some 9 million people are reportedly in poverty now, with more likely on the edge of poverty, coupled with an increasing malnutrition rate, it is very likely that health outcomes will get adversely affected if those in poverty or at the edge of it are unable to obtain their drug requirements from public hospitals, and they are forced go to private pharmacies where they may either forego buying the drugs prescribed or buy half or one-third of a prescription due to the very high prices of drugs and medical supplies. 

Secondly, a study will have to assess the accuracy of the quantification and forecasting of demand for drugs as this one single factor that perhaps maybe identified as the commencement point of a medical supply chain although such a point does not exist in a chain. Quantification requires reliable usage data that should be supported by morbidity data. Accurate quantification is a major factor for a medical supply chain to function without interruption.

Thirdly, the methodology used to assess the quality of drugs imported, and the credentials of the suppliers will have to be assessed as substandard drugs could have adverse effects on health outcomes. It is not certain how the private sector as well as the public sector assesses the quality of drugs imported and what quality assurance processes are in place. 

Fourthly, the prices paid for drugs imported, and raw materials imported for the local manufacture of drugs, are also key factors that effect the budgets allocated for imports. Whether procurement procedures are adequately competitive in the State sector, and whether large scale emergency procurement has been done at high prices are factors that will have to be investigated. It is unclear whether private sector imports are subject to a pricing mechanism such as a pricing formula or whether they are free to determine their market prices. The high retail prices of many drugs are perhaps indicative of the latter.

Last but not least, the environmental impact on drugs during transportation and storage is a key area that needs to be looked at as adverse environmental conditions could affect the efficacy of drugs and therefore health outcomes.

In some countries, waste that occurs due to some of the above-mentioned factors has amounted to anything between 20-30% of the annual expenditure on drugs. Hopefully, this has been minimal in Sri Lanka. However, this and all above mentioned areas should be investigated as the immediate drug shortage issue and possible impact on health outcomes could be just the tip of an iceberg and underlying factors mentioned above could be the hidden part of the iceberg that has been creating shortages and an impact on health outcomes for a long time.