Dutch bank urges price hike for generics to tackle drug shortages

ABN AMRO, the third largest bank in the Netherlands, has proposed that the country should raise the maximum price of generic medicines to address ongoing drug shortages. The bank's healthcare sector banker, Anja van Balen, highlighted that the current pricing structure leads to a preference for suppliers to prioritize neighboring countries like Belgium and Germany, which pay significantly more for medications. This situation has resulted in Dutch patients facing difficulties in accessing necessary drugs, especially during supply chain disruptions. The report indicates that in 2023, the Netherlands spent €54.8 billion on health insurance reimbursements, suggesting that an increase in generic drug prices would have minimal impact on policyholder premiums. However, the Pharmaceutical Group of the European Union has expressed skepticism regarding the effectiveness of raising price ceilings to alleviate shortages, citing a lack of evidence. The report also notes that 849 products were withdrawn from the market last year, primarily due to financial reasons, which ABN AMRO interprets as a consequence of low prices and high financial risks for drug producers. The bank's economist, David Bolscher, emphasized that while increasing prices could help, it is essential to consider other measures to combat shortages, such as subsidizing production in Europe. Additionally, a 2021 European Commission study pointed out that many reported causes of medicine shortages are linked to quality and manufacturing issues. The report advocates for a unified definition of medicine shortages across the EU and improved stockpile management to ensure better availability of essential medications.