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Pharmaceutical company Stada has told P3pharmacy it uses ‘dual sourcing’ of drug molecules to prevent supply shortages – but believes cost concerns are holding other industry players back from doing the same.  

Stada chief executive Peter Goldschmidt (pictured) was speaking at the June 26 launch of a global health report by the company, which owns the Huddersfield manufacturer Thornton & Ross and operates in around 30 countries.

Commenting on the company’s efforts to tackle shortages of active pharmaceutical ingredients (APIs), Mr Goldchmidt said: ‘What we have done is build more inventory so in case of crisis we have it available.

“But the real thing we have done is [use] two sources. If you have an API production which is not working in India and you have a problem, then what can you do? Nothing.

“But if you have a second source in China, Spain or the US, you have alternatives.”

But he said few companies are taking the same approach, explaining to P3pharmacy: “Why do [they] have one source? Because it’s the cheapest. If you go for a second source, you dilute your margin.” 

“It’s costly, but it’s smart,” he said of Stada’s approach, commenting that dual sourcing “gives us much more security than others”.

Eighty per cent of the company’s top 50 molecules are dual-sourced, he added. 

Mr Goldschmidt said he has had difficult conversations with politicians in Germany and elsewhere in Europe about governmental efforts to drive down national medicines bills – often described as one of several factors behind rising shortages in the UK and elsewhere.

He said governmental attempts to push down prices risk pushing established manufacturers out of certain markets and forcing national commissioners to use others that are “not reliable” and don’t “have a track record”. 

“If you push the price down too much, you create the issue yourself,” he said. 

But he detected a shift in attitudes among policymakers: “The good news [is] the politicians in Europe have understood it’s not only the price [that matters], in the end it is supply reliability. Not having the product is more expensive."

Earlier today (July 8) the All-Party Parliamentary Group for Pharmacy (APPG) published a report detailing the impact "chronic" shortages of key medicines are having on patients and pharmacy teams across the UK. 

The report advises the Government to reform medicines pricing and reimbursement policies to better reflect market realities, among numerous other recommendations.