Pharmaceutical Supply Shortage Law Fails to Improve Medicine Availability

The legislation introduced to mitigate pharmaceutical supply shortages in Germany has been found to be largely ineffective, according to a recent evaluation by the country's statutory health insurance association. The law, known as the Pharmaceutical Supply Shortage Mitigation and Care Improvement Act (ALBVVG), was enacted in 2023 as a response to persistent disruptions in the availability of essential medications, a problem which intensified during the COVID-19 pandemic.

Key provisions of the ALBVVG were designed to bolster the stability of medicine supplies. These included the exclusion of generic children's medicines from rebate contracts, a requirement for health insurers to consider at least one manufacturer within the European Union during rebate tender processes, and a mandate for pharmaceutical companies and wholesalers to maintain sufficient stockpiles of critical active ingredients to ensure six months of uninterrupted supply.

Despite these measures, the statutory health insurers' umbrella association (GKV-SV) concluded that the law has not led to any significant improvement in supply security for patients and pharmacies. The evaluation, referenced by several industry reports ahead of its official publication, highlighted that while expenditures for medicines affected by shortages increased by approximately 100 million euros annually, this additional spending did not translate into improved delivery or availability. Pharmaceutical manufacturers reportedly had the capacity to demand up to 500 million euros more, but refrained from doing so, which insurers interpret as evidence that current price levels remain profitable for the industry.

The findings suggest that the increased financial outlay under the ALBVVG has not yielded a corresponding benefit in terms of medicine availability. As a result, the GKV-SV considers the law difficult to justify amid rising health insurance contributions and ongoing supply challenges. The association instead advocates for alternative strategies, such as enhanced stockpiling of essential medicines, greater use of imports from other EU member states when necessary, and the establishment of an early warning system to detect disruptions in production countries before they result in shortages at the national level.

The pharmaceutical industry has also criticized the law, labeling the approach as inconsistent and insufficient to address the underlying causes of supply bottlenecks. Industry representatives argue for a more comprehensive strategy that addresses global supply chain vulnerabilities, production capacities, and regulatory hurdles affecting the timely distribution of pharmaceuticals.

As Germany continues to grapple with medicine shortages, the debate over effective solutions remains active among policymakers, health insurers, and the pharmaceutical sector. The current evaluation underscores the complexity of ensuring reliable drug supplies and the need for ongoing reforms to safeguard patient care against future disruptions.