2024-10-28 17:28:00
Analysis of the SP’s demand
Nationalizing Sandoz wouldn’t be so absurd – but it would be wrong
The USA and France are sometimes taking drastic measures to ensure a secure supply of basic medicines. The SP’s idea, on the other hand, falls short.
What can be done about the medication shortage? The SP is calling for the federal government to buy the pharmaceutical company Sandoz. The delegates at the party conference in Davos voted clearly in favor of the purchase.
Foto: Gian Ehrenzeller (Keystone)
If you want to get reliable biscuits, you don’t have to buy the entire bakery. This applies even more to pharmaceuticals. Nonetheless demands the SP from the federal government, Sandoz as the world’s largest manufacturer of patent-expired drugs for 15 billion francs (its market value). This should put an end to the notorious shortages of flu drugs and antibiotics.
However, nationalization is not necessary to ensure a secure supply of basic medicines. But functioning supply chains – where the state can intervene more efficiently.
Austria shows this: Sandoz operates the last fully integrated Production of antibiotics in Europe – from the active ingredient to the packaging. Penicillin production could only be maintained in Austria because the federal government and the state of Tyrol subsidized the modernization of the plant in Kundl with 50 million euros.
France invests in paracetamol
Or for example France: The pain and fever medicine Dafalgan is to be manufactured 100 percent in France from 2026. The manufacturer UPSA receives investment aid from the French state. The aim is to produce not only the tablets themselves, but also the active ingredient paracetamol entirely in France. This is more expensive than importing it from China. But crucial for delivery security.
The Dafalgan sold in Switzerland also comes from French production, which was built up with state money. The company guarantees security of delivery for the upcoming 2024/25 cold season as well as for all coming winters.
Things are different with the fever and anti-inflammatory drug Algifor: Here, the manufacturer Verfora, which is part of the Galenica Group, is “confident” that it will be able to deliver reliably this winter. In the winter of 2022/23 there was a shortage – especially children’s syrup ran out. For a normal flu season, Algifor – including for children – is “already in stock for the entire season,” says Galencia.
China could harm the West with a blockade
Guaranteed delivery security costs. State aid for investments in production in Europe is not necessarily necessary. A medication surcharge can also help. Or storage paid for by the state.
In addition to security of supply, there is a second, geopolitical reason why the state should pay more attention to the pharmaceutical industry and its supply chains: If China wants to seriously harm the West, all it needs to do is block exports of active pharmaceutical ingredients.
In the US, a law supported by both Democrats and Republicans is on the way that will ban pharmaceutical companies from working with certain Chinese biotech companies if they want to continue to be accepted by state health insurance companies. This is justified by national security interests. The Biosecure Act is not just about the production of active ingredients, but also about the possible collection of genomic data by China, which should be prevented.
Pharmaceutical companies like Novartis are currently combing through their supply chains in order to be able to comply with the possible new US law.
In view of the increasing interference in pharmaceutical production, the SP’s call for the nationalization of Sandoz is not absurd. But far too little targeted – and too expensive.
Sandoz IPO in October 2023: Celebration in Zurich on the first day of trading with the president and top management.
Photo: Yvon Baumann
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The article discusses the current medication shortages, particularly in the context of calls from the Socialist Party (SP) in Switzerland for the federal government to consider buying the pharmaceutical company Sandoz. At a recent party conference in Davos, delegates voted in favor of this proposal, citing Sandoz’s position as the largest manufacturer of off-patent drugs with a market value of 15 billion francs. The SP believes that nationalization could help end shortages of essential drugs like flu medications and antibiotics.
However, the article argues that nationalization is not a necessary step for ensuring a secure supply of basic medications. Instead, it suggests that improved supply chains and state intervention could be more effective solutions. The text draws comparisons to examples from other countries, such as Austria and France, which have made government investments to ensure stable local production of essential medications.
The article also highlights geopolitical concerns regarding the pharmaceutical supply chain, particularly the potential for China to disrupt exports of active pharmaceutical ingredients. It mentions legislative efforts in the U.S. that may impact pharmacy operations tied to Chinese biotechnology firms, reflecting broader national security concerns.
Ultimately, while the call for Sandoz’s nationalization addresses real supply issues, the article posits that targeted, well-resourced interventions would be more effective without the high costs associated with outright government ownership of the pharmaceutical company.
