In 2018, pharmaceutical distribution in Japan faced an unprecedented issue, a serious shortage of a critical antibiotic drug named Cefazolin. This shortage had been caused by unpredictable environmental regulation affecting the production of its ingredient in China. Supply of Cefazolin was completely disrupted. To make matters worse, it was difficult for drug manufactures to find alternative suppliers, because the Chinese company was the sole producer of this ingredient. Doctors and pharmacists were deeply concerned and they urgently requested the Government (Ministry of Health, Labor and Welfare, MHLW) to address this shortage. In March 2020, MHLW convened the expert meeting to examine and discuss how to address the problem. After several meetings, MHLW identified a list of some key drugs known as Anteikakuho Iyakuhin(key drugs whose supply requires special consideration) and proposed a program for monitoring and securing their supply chain in case of emergency.
This concept is based on supply chain management and shares same ideas with the “building resilient supply chain of specified critical products” articulated in Act on the Promotion of Ensuing National Security through Integrated Implementation of Economic Measures.
In 2020, a serious shortage of generic drugs occurred because some major generic manufactures failed to comply with GMP(Good Manufacturing Practice) and they were penalized. As a result, wholesalers, hospitals and pharmacies across Japan fell into confusion. After several expert meetings, MHLW began implementing measures to improve the quality management of generic manufacture and amended the Act on Pharmaceuticals and Medical Devices, and Medical Care Law to help secure and stabilize the pharmaceutical supply chain.
To build an efficient and stable supply chain, trade practices in distribution must be improved and modernized. Recently, there have been some reports of conflict between wholesalers and agents on price negotiation and payment collection for small pharmacies. Increasing number of pharmacies using these agents is placing a burden on wholesalersʼ operation. However, the business models of these agents remain largely unknown. Through further analysis, we aim to identify the ways to normalize trade practices in pharmaceutical distribution.
View full abstract