The pound’s fall against the Euro could affect the supply of pharmaceuticals to the NHS.
A study in the Health Service Journal has suggested speculators are acquiring UK pharmaceutical supplies and exporting them to regions like Scandinavia and countries such as Germany.
HSJ also reports on data showing a “dramatic slowdown” in UK imports of cut-price branded drugs – generics.
The parallel trade
The pound fell in value against the Euro by 20% in 2008. Its rate today against the euro is 1.06. In the credit crunch and subsequent economic recession, the UK economy’s major dependence on financial services has caused international investment markets to sell sterling.
When the pound was trading at a higher rate, the ‘parallel trade’ involved businesses speculating by buying generic and branded drugs in Europe at lower cost, and selling them in the UK at a profit. The licence applications to the the Medicines and Healthcare products Regulatory Agency for parallel trade permits have fallen by 60% between November 2007 and November 2008.
However, HSJ reports that “there is evidence that these traders are now attempting to buy up UK supplies, repackage them, and export them at a profit”. It also says that 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”.
British Association of European Pharmaceutical Distributors secretary general Richard Freudenberg told HSJ that sterling’s drop in value had rendered many products “unviable for importation”. The magazine quotes the Office of Health Economics figures estimating that parallel imports make up 12 per cent of the UK pharmaceutical supply.
A Department of Health spokeswoman told HSJ it was “monitoring the situation closely”.
