POLICY BRIEF

Stabilizing the supply of antimicrobials
Executive summary• Fragmented antimicrobial supply chains, with very few players at some stages of the chain, increases the risk of global
antimicrobial shortages.
• High labor costs and low profits have reduced Japan’s antimicrobial market, leading to a situation in which Japan is dependent
on overseas manufacturers for the continued supply of antimicrobials.
• Fragmented supply chains and weak market conditions are global problems. Antimicrobial shortages account for 15% of all
global drug shortages.
• A risk-management perspective is needed to help companies and countries stabilize antimicrobial supply chains. Responses
should include efforts to ensure that multiple routes exist for regularly used antimicrobials.

Introduction
Many different players are involved in antimicrobial supply chains, moving the product from manufacturers to consumers. Putvery simplify, active pharmaceutical ingredients (APIs) and excipient manufactures deliver their products to drug manufactures.
From there, antimicrobials are manufactured and then sent out for packaging. The completed drug is distributed to primary or
secondary wholesalers, which deliver the antimicrobials to hospitals, pharmacies, and patients.
However, the supply chains for antimicrobials are highly fragmented, consisting of many players at some stages of the chain
and very few players at other stages. This is especially the case for APIs, the biologically active ingredients of each
pharmaceutical. For example, China provides 40% of global APIs.1 Therefore, if an overseas API manufacturer halts production
due to contamination, it can cause a bottleneck in the supply chain, resulting in global antimicrobial shortages. Such antimicrobial
shortages are already happening throughout the world, including Japan.
During antimicrobial shortages, many doctors are forced to use suboptimal alternatives. In the US, 55% of physicians
indicated that they used less effective, more toxic, or costlier alternative and second line agents during antimicrobial shortages,
potentially causing accelerated antimicrobial resistance. 2

Background of the Issue: Japan
In 2019, Japan faced a major shortage of cefazolin, an “essential” antibiotic used to prevent infections related to surgeries.3
While the Ministry of Health, Labour, and Welfare provided a list of alternative drugs, these substitute agents were also in short
supply. About 42% of physicians claimed that the cefazolin shortage had an effect on their practice.4 According to a survey ofJapanese hospitals that faced cefazolin shortages, the proportion of prescriptions that would be considered appropriate
antimicrobial use decreased, whereas the proportion of prescriptions of broad spectrum antimicrobials increased, suggesting thatthe shortage had an impact on antimicrobial stewardship. 5
The cefazolin crisis exemplifies many of the issues regarding the supply of antimicrobials in Japan. Prior to the drug revisionin April 2020, the price of 0.5g cefazolin is about ¥96 compared to its manufacturing cost of around ¥120. 6 Therefore, companies
were selling cefazolin at loss, making continued production unsustainable. While the price was raised to ¥156 in response to thecrisis, the Four Academic Society has expressed concerned about acquiring antimicrobials during an emergency.
Furthermore, labor costs are too high in Japan for companies to enter the active pharmaceutical ingredients (APIs) market.
As a result, Japan depends heavily on manufactures based in countries where labor costs are lower, such as China and India. A

failure at any of these off-shore manufacturing plants can lead to a national shortage of antimicrobials.
Despite efforts by the public and private sector to stabilize antimicrobial supplies domestically, it has not been enough stop
the decline of Japan’s antimicrobial market. The market for systemic antimicrobials decreased from ¥965.5 trillion to ¥200 trillion
from 1989 to 2018.7 Therefore, it is essential that Japan continues to take more action to improve market conditions byimplementing strategies to incentives investment. 8

Stakeholders and Countermeasures: JapanStakeholderCountermeasure

Nichi-Iko PharmaceuticalCompany, ltd.

• $15 million investment into its factory in Shizuoka. 9

Four Academic Societies(Japan Society for Infection
Prevention and Control. Japan
Society of Chemotherapy, theJapan Association of Infectious
Diseases, and Japan Society ofClinical Microbiology)• Four Academic Society’s Policy Recommendations for the stable supply of antimicrobials- list of ten
key drug, as well as proposals for understanding the current situation of antimicrobial drug
production and systems, developing an environment for national manufacturing of antimicrobials,and reviewing the price of existing antimicrobials. 6

Government (G20)• Okayama Declaration of G20 Health Ministers - the declaration highlighted the need for private
market incentives to guarantee the sustainable access of new and existing essential antibiotics. 10

Background of the Issue: Global
Around the world, antimicrobial shortages occur frequently, accounting for around 15% of all drug shortages.9 From 2001 to2013, 148 national antimicrobial shortages occurred in the US alone,12 and as of June 29, 2020, 10.5% of all antimicrobials are in
short supply.13 Currently, a penicillin shortage is affecting at least 39 countries. As well as its effects on health outcomes, theestimated economic cost of an antimicrobial shortage is between €20-€30 million (¥2.9 billion to ¥4.3 billion). 14
While unnecessary antimicrobial use contributes to these shortages, long-lasting shortages are primarily due to weak marketconditions. The US Food and Drug Administration (FDA) stated that 62% of all drug shortages in the US are a result ofmanufacturing and quality issues. 15 When profits are low, companies either exit the market or relocate manufacturing to countries
where production costs are lower. For example, China accounts for approximately 40% of global active pharmaceutical ingredient(APIs) production. 1,16 Also, Puerto Rico is home to 49 pharmaceutical companies and more than 70 medical device manufacturers
because labor costs are the lowest of any US territory.17 Notably, more than 30 drugs and 10 biologics without good therapeutic
alternatives were made primarily or exclusively on the island. Consequently, if only one or two producers exists, any failure along
these supply chains can result in rapid regional or global shortages.
Antimicrobial shortages are not restricted to high-income countries, but also have major impacts for low- and middle-income
countries. Weak supply chains, a lack of oversight and regulation, and high medical costs prevent many people in low- andmiddle- income countries from accessing antimicrobials. Currently, a lack of access to antimicrobials kills more people thanantimicrobial resistance in low- and middle- income countries. Of the 21 new antibiotics entering the market between 1999 and2014, less than five were registered in Sub-Saharan Africa. 18 In addition, the greatest increases in demand for antimicrobials havebeen observed in low- and middle- income countries. In 2015, four out of six countries with the highest antibiotic consumption
rates were low- and middle- income countries (Turkey, Tunisia, Algeria, and Romania).16 Therefore, it is important to ensure that
antimicrobial supply chains are also reaching low- and middle- income countries.

Stakeholders and Countermeasures: GlobalStakeholder

Countermeasure

CARB-X• Global public-private partnership focused specifically on antimicrobial innovation. CARB-X isinvesting more than $500 million between 2016-2021, including the development ofantimicrobials. 20

Access to Medicine Foundation• White paper highlights the underlying causes of the antibiotic shortage and recommendations forgovernment, regulators, the pharmaceutical industry and others. The paper focuses primarily on
three countermeasures: demand planning, ensuring uninterrupted supply, and strengthening thedistribution chain. 12

United Kingdom’s five-year planon antimicrobial resistance• First national pull-incentive to increase antimicrobial prices depending on their public health value. 21

Stakeholder

Countermeasure

Drive-AB• Joint undertaking between the European Union and European Pharmaceutical Industry Association,including 15 public and 7 private partners from 12 countries. Created policy recommendations
strengthening antibiotic pipelines. 22

UK’s AMR Centre and Shionogi& Co., Ltd.

• Public-private partnership on the antimicrobial COT-143. The AMR Centre will be responsible for
manufacturing the complex active ingredient and will work on future strategies to commercialize thedrugs once clinical trials have been successfully completed. 23

GlaxoSmithKline• Works with WHO in anticipating supply and demand needs of antimicrobials. 17

AMR Industry Alliance• According to a 2020 report, 81% of member companies have comprehensive strategies to improveaccess and 63% have partnered with NGOs, industry trade groups, local healthcare institutions, andothers to expanded patient access to AMR-relevant products. 24

AMR Alliance Japan Recommendations• The Government should invest appropriately to help companies realize the stable supply of antimicrobials, based on a riskmanagement perspective (including through the consideration of increasing the premiums attached to antimicrobials within themedical fee system).
• The Government should support companies in their efforts to ensure that multiple production routes exist for regularly used
antimicrobials, and to make it possible to increase the supply of antimicrobials when needed.

References1.
2.

Medicines and Healthcare Products Regulatory Agency. “International Strategy” (London, UK, 2017)
Gundlapalli, Adi V., Susan E. Beekmann, Donald R. Graham, Philip M. Polgreen, and Infectious Diseases Society of America's Emerging Infections
Network. "Perspectives and concerns regarding antimicrobial agent shortages among infectious disease specialists." Diagnostic microbiology andinfectious disease 75, no. 3 (2013): 256-259.
3. Honda, Hitoshi, Shutaro Murakami, Yasuharu Tokuda, Yasuaki Tagashira, and Akane Takamatsu. "Critical national shortage of cefazolin in Japan:
management strategies." Clinical Infectious Diseases (2020).
4. Asahi Shimbun. “Suspension of cefazolin, surgeries affected, hospitals in panic”
5. Komagamine J, Yabuki T, Hiraiwa T. “A trend in prevalence of antimicrobial use and appropriateness of antimicrobial therapy in an acute care
hospital from 2018 to 2019: repeated prevalence surveys in Japan.” BMC Res Notes 12, no.1 (2019): 811.
6. Japan Society for Infection Prevention and Control. Japan Society of Chemotherapy, the Japan Association of Infectious Diseases, and Japan
Society of Clinical Microbiology “Recommendations by four academic societies for the stable supply of antimicrobials” (Tokyo, Japan, 2019)
7. Mix. “IQVIA Heisei era’s drug market: Antibacterial drugs in the first half, lifestyle-related drugs in the second half, antitumor drugs in the second
half dominate” (Tokyo, Japan, 2019)
8. Honda, Hitoshi, et al. "Critical national shortage of cefazolin in Japan: management strategies." Clinical Infectious Diseases (2020).
9. Nikkei Medical. “Nichi-Iko invests 1.5 billion yen in stable supply of cefazolin” (Tokyo, Japan, 2019)
10. G20. “Okayama Declaration of the G20 Health Ministers” (2019)
11. Quadri, Farha, Maryann Mazer-Amirshahi, Erin R. Fox, Kristy L. Hawley, Jesse M. Pines, Mark S. Zocchi, and Larissa May. "Antibacterial drug
shortages from 2001 to 2013: implications for clinical practice." Clinical Infectious Diseases 60, no. 12 (2015): 1737-1742.
12. Cogan, Deirdre, Karrar, and Jayasree K. Iyer. "Shortages, stockouts and scarcity." (Amsterdam, Netherlands, 2018)
13. World Health Organization. Meeting report: antibiotic shortages: magnitude, causes and possible solutions: Norwegian Directorate of Health,Oslo, Norway, 10-11 December 2018. No. WHO/MVP/EMP/IAU/2019.02. World Health Organization, 2019.
14. FDA Drug Shortages. Current and resolved drug shortages and discontinuations reported to FDA. https://www.accessdata.fda.gov/scripts/drugshortages/default.cfm. Accessed 6/29/2020.
15. Food and Drug Administration. “Drug Shortages: Root Causes and Potential Solution.” (Maryland, US, 2019)16. Aitken, M. "Prescription drug shortages: examining a public health concern and potential solutions." Parsippany, NJ: IMS Institute for Healthcare
Informatics (2011).
17. Stone, Judy. “Fragile Antibiotic Supply Chain Causes Shortages And Is A National Security Threat” Forbes. (New Jersey, US, 2018)
18. Center for Disease Dynamics, Economics & Policy. “Access Barriers to Antibiotics” (Washington DC, US, 2019)19. Klein, Eili Y., Thomas P. Van Boeckel, Elena M. Martinez, Suraj Pant, Sumanth Gandra, Simon A. Levin, Herman Goossens, and Ramanan
Laxminarayan. "Global increase and geographic convergence in antibiotic consumption between 2000 and 2015." Proceedings of the National
Academy of Sciences 115, no. 15 (2018): E3463-E3470.
20. CARB-X. “About CARB-X - Overview.” (Boston, US, 2020)
21. HM Government. "Tackling antimicrobial resistance 2019-2024: The UK’s five-year national action plan." (London, UK, 2019)22. Drive-AB. “About Drive-AB.” (Geneva, Switzerland, 2014)23. Shionogi & Co., Ltd. “Shionogi announces out-licensing agreement with AMR Centre on COT-143, a humanized monoclonal antibody targeting
the PcrV protein of Pseudomonas aeruginosa” (Osaka, Japan, 2019)24. AMR Industry Alliance2020 “PROGRESS REPORT EXECUTIVE SUMMARY” (Geneva 20, Switzerland, 2020)