Is our medicines supply chain stretched to breaking point?

The NHS principally runs on off-patent generic and biosimilar medicines, which fulfil nine out of ten patient prescriptions^​1​. These medicines enter the market when an originator product loses patent protection and — through competition — prices paid by the NHS typically decrease by as much as 90%^​1​. This model has been a knight in affordable armour for the NHS — delivering significant of annual savings. This affordability dramatically increases the number of patients who can access a medicine.

Historically, the off-patent sector has been adaptable and capable of absorbing shocks or crises. However, the supply chain is displaying signs of vulnerability that could have serious consequences.

The UK has long benefited from some of the lowest medicine prices in Europe. However, the question must be raised: when does that shift from being a great benefit to taxpayer value for money, to a threat to the safe and sustainable running of the NHS? The truth is we may already be at that point. Urgent policy action is required.

Owing to economic pressures and a need to maintain financial efficiency, the UK’s supply chains have become increasingly stretched across Europe, India and China. Around one-quarter of the finished-form medicines used by the NHS are made in the UK^​1​, but they rely on supplies of active pharmaceutical ingredients (APIs) and starting materials sourced from across the globe^​2​.

The need to reduce costs is clear when you look at the economics. Around 60% of off-patent medicines sell for less than £1 for a month’s supply^​3​. These are life-saving, life-enhancing treatments that we all rely on, yet pay so little for.

In a quest to maintain affordable supply, the UK has unintentionally become dependent on medicine supplies from a very small number of countries and is therefore highly vulnerable to disruptions. This reliance constitutes a critical risk to UK resilience — whether it be shipping disruptions, natural disasters or geopolitical turbulence.

Reliance on places such as India and China for medicine supplies is not unique to the UK, but more decisive action has already been deployed in other parts of the world. The European Union (EU) has for many years been developing its Critical Medicines Act^​4​, which covers measures to protect supply. In contrast, the UK’s life sciences sector plan has ignored resilience in the NHS’s medicine supply, despite today’s turbulence.

Unlike the UK, several major markets are taking concerted action to address resilience issues. For example, France has identified 42 essential medicines for which it is paying manufacturers to relocate production in-country^​5​, as well as rewarding domestically manufactured products with higher pricing.

Protecting the NHS’s medicines supply should be placed on a similar strategic footing to defence security. We need a sector plan to ensure patients can continue to reliably access the medicines they need, particularly in times of crisis.

The answers lie principally in two areas. Firstly, we must make the UK more attractive for more companies to supply and manufacture here, including API manufacturing. We will never produce all the medicines the NHS needs in the UK, but policy moves, including targeted incentives for manufacturing and further guaranteed purchase of critical medicines products, such as those seen in Project Revive — a collaboration between NHS England, the Medicines and Healthcare products Regulatory Agency and Medicines UK that seeks to reactive dormant licences and invest in new supply routes in strategically important areas^​6​ — would help.

As it stands, Innovate UK — the government’s innovation agency — does next to nothing to encourage domestic manufacturing of medicines despite listing life sciences as a key sector. It spent just £13m, which was split between 14 projects, to “revolutionise medicines manufacturing” in 2023 in a partnership with the Department of Health and Social Care^​7​. More recently, it invested a further £54m in more environmentally friendly, not necessarily more resilient, medicines manufacturing. That is a small proportion in the government agency’s £1.1bn annual budget^​8​.

This type of funding could be re-profiled to concentrate on critical and vulnerable medicines, as could money from the Sustainable Medicines Manufacturing Innovation Programme (SMMIP), up to £70m,^​9​ and the Life Sciences Innovative Manufacturing Fund (LSIMF), up to £520m^​10​.

The second answer to medicines resilience sits in our international relationships. The UK has signed free-trade agreements with the EU^​11​, India^​12​ and South Korea^​12​. We urge the government to further evolve these partnerships so they also focus on medicines supply.

For example, the EU does not allow British medicines to be exported to member states without additional, costly regulatory steps^​13​. Despite this, the UK does allow treatments to be imported from Europe with no such requirements^​14,15​. Thus, we strongly advocate for mutual recognition of batch testing, as the current imbalance drives investment decisions around where manufacturing is sited.

Priority of supply in times of crisis could be part of a broader agreement with India, as it supplies one-third of the NHS’s medicines^​16,17​. Resilience needs focus, but it doesn’t necessarily need new capital at a time when government spending is tight. Instead, a review of existing funding arrangements should be conducted.

Existing policy direction should also be examined with a medicines resilience lens. The UK’s Life Sciences Sector Plan has three core pillars, none of which mention resilience^​18​. The plan sets out its ambitions for growth and innovation, but it says little about the resilience of ‘business as usual’ medicines supply.

The government should give thought to how its own policies and the role they play impact resilience. For example, we have recently had measures, such as the ‘Extended producer responsibility for packaging’, which took no account of its impact on medicines supply and, as a result, risks driving vital treatments out of the UK market by making them uneconomic to produce.

This matters to pharmacies and pharmacists. Most medicines prescribed in community pharmacy are off-patent generics. Shortages or price rises caused by a lack of resilience directly impact patients but also critically impact the workload and financial viability of pharmacies — be they independently owned or those that are part of larger chains.

As Andy Burnham gets to grips with his role, including finding the funds for defence commitments, we urge his administration to consider the consequences of inaction around medicines security. For too long, the UK has complacently benefited from the cost of off-patent medicines — now is the time to build resilience, recognising their value.