LMWH value & manufacturing
Sanofi has observed that some procurement practices aimed at realizing short-term savings may disrupt the market balance leading to long-term market unsustainability.
In some cases, this may unintendedly disincentivise manufacturers to supply in certain markets increasing the risk of challenges in the supply chain and medicines shortages. This situation could lead to an overall increase in healthcare expenditure.
In the past demand was more predictable within the LMWH market; this led to a more sustainable market with manufacturers able to maintain continuity of supply and financial stability. Today this market has been impacted by the following issues:
- Increased production costs
- Unsustainable prices
- African Swine Fever
- Voluntary scheme for branded medicines pricing and access (VPAS)
Furthermore, with the emergence of biosimilars alongside a continuing pattern of International Non proprietary Names (INN) prescribing, the predictability of demand in this market is becoming ever more complex.
Price-orientated procurement practices also have the potential to increase the availability of parallel imports which could destabilise the supply of LMWHs further.
Demand for LMWHs has been increasing over the past 10 years.
Sanofi project the global market to continue growing at approximately 5% per year between 2022-2028.*
In recent years, the average procurement cost of pure heparin has increased; (for Sanofi this has more than doubled over the past 5 years) with pure heparin accounting for >50% of Clexane (enoxaparin) production costs.
Increased global demand for syringes and component parts has also contributed to difficult market conditions.
Currently, these difficult market conditions are exacerbated by global inflation which also increases procurement costs. At the same time, price-centric tendering practices are contributing to an unsustainable situation by commoditizing the LMWH market.
Due to the length of the supply chain and difficulties in accurately forecasting, the industry faces challenges in responding rapidly to changes in procurement policies and demand. Communication between industry and the NHS is essential in matching supply with demand.
Sanofi believe that if the number of suppliers in each market decrease, vulnerabilities in supply chains can become more exposed which increases the strain on remaining suppliers to deliver consistent volumes.
Investment in high-quality manufacturing supported by sustainable procurement practices can strengthen supply chain resilience.
By supplying Clexane (enoxaparin) in more than 100 counties over a 30 year period, Sanofi has become the global leader in the supply of LMWHs.
Sanofi also boasts a diversified global supply chain with multiple manufacturing and sourcing sites across Latin America, China and North America, and has the largest EU footprint of any LMWH manufacturer; this diversification, including local manufacturing, helps to support local economies and insulate the market from medicine shortages.
Furthermore, Sanofi is committed to improving environmental sustainability through improved packaging designs, reinvesting in further life cycle management and providing additional services to patients and healthcare systems.
Case for sustainable procurement
As a leading global enoxaparin manufacturer, Sanofi has the expertise to work with authorities across the world. Sanofi is therefore approaching authorities with proposals to overcome the market and supply challenges and ensure patients' access to medicines.
Sanofi believe that the global LMWH market needs greater supply resilience and long-term sustainable market conditions.
Sanofi is calling for all stakeholders involved in LMWH procurement to find the most appropriate conditions and support long-term market sustainability and patient access striking a balance between fair pricing and healthcare cost optimisation
Pricing recommendations should be tailored to the local market and policy environment and should support market sustainability and patient access
National guidance on sustainable tendering practices should be recommended
Tender designs should reflect the complexities of LMWH and safeguard access to medicines
Sanofi asks procurement leads to consider changes to tender structures which increase the emphasis on non-price centric criteria and award multiple suppliers, which will benefit all stakeholders by increasing supply reliability and safeguarding access to these essential medicines. This is in line with the Governments Social Value Model.
Education is required for a greater understanding of sustainable procurement and local decisions should be communicated to all suppliers of LMWH.
MAT-XU-2205333 (v3.0) Date of Preparation: October 2023