Parallel Trading renders UK Drug shortage

Greetings readers,

Unusually, only a day has passed since my last post, but felt compelled to share some of my thoughts on both BBC and HSJ articles I have just read relating to drug shortages in the UK. Yes, you read that correctly; pharmacists are warning that patients are suffering because of a shortage of some medicines.

Apparently, due to the weak pound, many pharmacists have been profiteering by buying in surplus amounts of drugs, and then selling them on to more attractive markets, where a quick profit can be made. This is known as "parallel trading" (or "skimming") in the industry where drug shortages are commonplace in less affluent European countries such as Spain or Greece. However, the pound is currently relatively weak compared to the Euro, meaning that many branded drugs are now worth more in places like Scandinavia and Germany than they are here in the UK. What a turn up for the books! It feels as if we are being relegated to second-class status within the European hierarchy!

The British Association of European Pharmaceutical Distributors secretary general, Richard Freudenberg, has said that parallel traders were generally only interested in importing drugs where there was a 20 percent difference between what they paid and what they could sell it for. But the pound has fallen by more than 20 percent in the last 12 months, wiping out much of that potential profit. Essentially, what this means is that the fall in the pound has made a lot of drugs "unviable for importation". This is definitely a concern, as the think-tank, the Office of Health Economics estimates parallel imports make up 12 percent of the UK pharmaceutical supply.

So not only are less drugs being imported into this country, but many of them are being exported into Europe to make a profit. In simple terms, we are being hit by a double whammy.

Accordingly to an article in the Health Service Journal, "drug manufacturers and wholesalers have begun rationing the amount of certain drugs each UK pharmacist, GP and hospital dispensary can buy. Pharmacists report that in some cases patients have had to wait days for their drugs". Indeed, individual pharmacies are now being monitored for "unusually large orders", suggesting they might be selling surplus drugs on to Europe.

Writing this article has really made me question the ethics behind the phenomenon of parallel trading. It seems as though in times of relative prosperity, we are happy to import drugs from poorer European countries, thereby rendering a drug shortage in those places (but getting our drugs cheaper). However, when the proverbial tables are turned, and we begin to suffer drug shortages, there is surprise surprise, an audible outcry.

Perhaps it is time we reviewed the practice of parallel trading, not just during the bad times, but in the good times too.

Thanks for reading,

F.