Medicines shortage fears grow

British patients face the prospect of drug shortages as the falling price of medicines makes it more profitable for pharmacists and wholesalers to sell them abroad.

The weakening of sterling against the euro has reduced British drug prices, compared with levels in other countries. That has fuelled a surge in the legal “grey market” practice of exporting drugs from the UK to more expensive medicine markets elsewhere in Europe – so-called parallel trade.

Supplies could tighten further from January 1, when the labour government’s Pharmaceutical Price Regulation Scheme comes into force, imposing a 5 per cent price cut on prescription medicines bought by the National Health Service.

Andrew Hotchkiss, managing director of the UK operations of Eli Lilly, the US-based pharmaceutical company, warned of a “triple whammy” creating supply shortages, with the falling pound, price cuts and both fewer imports and more exports all creating uncertainties that could mean medicines are not available in pharmacies.

“We’re worried about patient access,” he told the Financial Times.

Britain has traditionally been an importer of medicines via parallel trade.

Wholesalers and many individual pharmacies have licences that allow them legitimately to export medicines from the UK to other countries where they fetch higher prices. Concerns are growing that this may increasingly squeeze supplies to British patients.

Martin Sawer, spokesman for the British Association of Pharmaceutical Wholesalers, whose members distribute medicines from drug companies to pharmacies, said he agreed that there were risks of supply shortages, especially since medicine stocks were likely to run low over the Christmas holidays.

The situation risked being worse than at any time in the past because the introduction of computerised stock control meant pharmacies often held smaller volumes of supplies.

Groups of pharmacies may deliberately order more medicine than they require, selling the remainder at a profit – a practice known as skimming. Prices in other northern European countries are about 10 per cent or more higher than in the UK.

Paul Johnson, UK managing director of IMS Health, the data consultancy, agreed that the UK’s share of parallel trade across Europe, traditionally about 30 per cent, had been shrinking since the spring – with faster growth in other higher priced markets. “The UK still has significant parallel imports but they have reduced dramatically in the last few months. And a whole range of products are now being exported. This is a perfect storm.”

He estimated that parallel trade accounted for nearly 10 per cent of Europe’s total prescription medicine sales and involved purchases from low-cost countries led by Greece, Spain and Portugal, with re-sale into the UK, Germany, Benelux and the Nordic region, where parallel imports accounted for nearly €5bn (£4.2bn) a year.


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