Dutch Minister of Care announces mandatory "base stocks" to prevent medicine shortages
20 December 2019
On 4 November 2019, the Dutch Minister of Care wrote a letter to the House of Representatives, proposing a solution for medicine shortages. In order to prevent shortages, additional stocks of medicines should be built up by obliging medicine manufacturers and wholesalers to build up mandatory buffers ("base stocks") of five months' duration, starting in 2020. The Minister of Care proposes that these base stocks should be divided equally between the parties:
- Manufacturer: three-month base stock.
- Wholesaler: two-month base stock.
- Pharmacy: two to three weeks of work stock.
These base stocks will have to be constantly supplemented to remain at a certain minimum level. It is expected that this will cover 85% of the temporary medicine shortages.
In his letter, the Minister of Care emphasised that a European approach was also important to tackle the shortages on a structural basis. He is therefore now in discussions with other EU member states to bring the production of crucial medicines and raw materials back to Europe.
It is estimated that building up such base stocks will cost around EUR100 million. Pharmaceutical manufacturers and wholesalers account for half of this. Because less money will be spent on more expensive replacement medicines, the Minister of Care expects that this will result in a saving of EUR25 million. The Minister of Care will discuss the financing of the stocks with health insurance companies, manufacturers, wholesalers and pharmacists. The intention is that these parties will work together and will be jointly responsible for combating drug shortages.
Pharmacists and wholesalers believe that these high costs will make the Netherlands less attractive for manufacturers to do business, which could lead to potential new shortages. Additionally, pharmacists fear that the obligation for base stocks will lead to the greater waste of medicines.
A prior version of this post was originally published by the same author in Practical Law – Life Sciences, December 2019 Issue (Thomson Reuters).