Apotex decision a warning bell

Apotex’ decision to pull two of its PBS-listed products should ring an alarm for the health and pharmaceuticals sector, says Belinda Wood, CEO of the Generic and Biosimilar Medicines Association.

Yesterday Apotex announced that it will be ceasing supply of two PBS listed prescription products from its portfolio: paracetamol/codeine tablets 500mg/30mg blister pack 20; and Cephalexin suspension, in 125mg/5mL bottle 100ml and 250mg/5mL bottle 100mL.

This is the first time such a large supplier has pulled medicines and specifically stated that the decision is due to the pricing environment.

Apotex managing director, Roger Millichamp said yesterday that ongoing price reform pressures have placed these products’ pricing to customers at less than the cost of product manufacture.

Wood told the AJP that for some generic medicines, there’s no further for prices to fall.

As Allan [Tillack] said at APP, medicines prices are at the endgame. There’s not a lot further to fall than a paracetamol/codeine combination at 74c – it just can’t go any lower than that,” Wood says.

“Everyone’s looking at their portfolios, looking at those medicines that are commercially unsustainable.”

During APP she warned that further delistings and resulting stock shortages – as other suppliers scramble to fill gaps in the supply chain created by the removal of some products – were likely in the near future.

“The fact that Apotex, which is a major supplier of PBS medicines, has taken a commercial decision to withdraw these medicines should really send alarm bells to all of us to say, ‘actually, maybe something’s not right here’,” Wood told the AJP.

“Of course commercial entities will make commercial decisions, that’s what they do. However the impact on this can be on patients, and that’s what we really have to look at.

“Considering that Cephalexin suspension would usually be used in a paediatric indication, I can only imagine how it would be for a pharmacist trying to explain to a patient that they don’t have any Cephalexin suspension when there’s a child crying there in the pharmacy.

“That’s a real situation. Pharmacists are going to have to explain why there’s a stock out, or why a patient might have to wait 24 hours to get that Cephalexin delivered to the pharmacy.”

Wood stresses that while there is a great deal of concern about low-priced medicines at the moment, “it’s not all doom and gloom”.

“What’s really important here is pricing policy, continued supply and viability – those are the number-one priorities of the Generic Medicines Working Group,” she says.

“I’m confident that through that group we and the Department of Health will work to find a resolution here that will result in a fair price for medicines, ongoing supply of medicines to patients and viability of this sector.”

The Generic Medicines Working Group was established under the Strategic Agreement signed by the Minister for Heath, Sussan Ley, and the Generic and Biosimilar Medicines Association in May 2015.

“It’s really only through the generics companies bringing generics to the market that any savings flow to the PBS, so we need a strong, competitive generic sector to keep them flowing and make medicines ultimately more affordable,” says Wood.

“Pharmacists should feel confident that something is being done here, and the GBMA feels confident that through the working group we will reach a solution.”

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1 Comment

  1. Russell Smith

    If Apotex cant make a buck from either cephalexin mixture or Codeine/Paracetamol, who can?
    Maybe the other suppliers are cross-subsidizing just to stay in the market – or maybe the real costs of the products are beyond our health minister’s comprehension.

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