LONDON – The U.K. government has placed an immediate ban on the export of certain drugs in a bid to prevent wholesalers taking advantage of the fall in the value of the pound against the euro by selling off U.K. stockpiles that have been built up to protect against an interruption in supplies in event of a no-deal Brexit.
The Association of British Pharmaceutical Industries (ABPI), whose members have financed and built those stockpiles, welcomed the ban.
The association has been calling for a restriction on parallel exports – whereby wholesalers buy drugs from manufacturers at the agreed price in one country and sell them in an EU member state where the price is higher – since March this year.
The decision to take "precautionary measures" to block parallel exports "will be very much welcomed by our members," said Rick Greville, ABPI director for distribution and supply chain. "It means that these stockpiles of medicines which companies have built over previous months are better protected and available only for use by the National Health Service patients for which they are intended." Greville said.
The U.K. government said the 24 drugs on the list are either being parallel exported, or are at risk of parallel export. While such parallel trade is legal, EU member states can impose restrictions if they are concerned about supply shortages.
Wholesalers who do not comply were threatened that their U.K. operating licenses could be withdrawn.
The industry body, European Association of Euro-Pharmaceutical Companies (EAEPC), hit back, saying the U.K. government had not shown there are genuine shortages that would justify the restriction on parallel trade.
Despite what the U.K. government says, most of the drugs on the restricted list, which include hormone replacement therapies, contraceptives, Epipens and hepatitis B vaccines, have not been parallel exported, according to Kasper Ernest, secretary general of EAEPC.
"Their prices do not make them relevant to parallel export. That is, either the prices in the U.K. are higher, or the same as elsewhere in the EU," Ernest told BioWorld.
Under the terms of their U.K. licenses, wholesalers are under obligation to ensure the continued supply of drugs. Ernest said that since many of the products on the U.K. list have not been parallel exported, wholesalers are at risk of sanction over shortages they have not caused. He called for greater transparency from the U.K. government to justify the restrictions.
"Parallel exports come from all over the EU, and parallel imports also go all over the EU. In fact, the U.K. is a net parallel importer," said Ernest. While parallel trade accounts for 2.5% of the EU's €220 billion (US$241.6 billion) total annual pharmaceutical market, it accounts for 5% in the U.K., which is the fourth largest national market in the EU.
"Every day, we alleviate shortages in the U.K. with our imports, said Ernest. "If anyone thinks that parallel export is a root cause for shortages, we have clear evidence to refute that."
Rather than parallel trading, the finger of blame should be pointed at manufacturers. Shortages are increasing all over Europe and the world, in fact. That is primarily due to manufacturing disruptions, quality issues and very concentrated supply chains. For example, if there are only one or two suppliers of an active pharmaceutical ingredient worldwide, there is a problem if production is reduced at one of them.
"We are tired of being the scapegoat of big pharma when they fail, or choose not to deliver for commercial reasons," said Ernest.
There are efforts in France and the Netherlands to tackle the root causes of shortages, which along with manufacturing and quality issues, include a lack of interest in the EU market, due to a general lower price level than the U.S.
EAEPC members are seeing an increased demand from health authorities all over Europe to parallel import because countries cannot get supplies direct from manufacturers.
"Our main mission is to create price competition on medicines [compared to] pharmaceutical [companies] extracting enormous profits from health systems all over the EU," said Ernest. "However, more and more patients and authorities turn to us to help alleviate shortages, by parallel importing medicines."
The U.K. Department of Health cited supply shortages due to manufacturing issues to justify the export restrictions, saying similar measures have been put in place elsewhere in Europe, including France and Spain.
But it implicitly endorsed ABPI's concerns that wholesalers could take advantage of exchange rate fluctuations to parallel export medicines from the U.K. Brexit stockpiles, including a quote from ABPI's Greville saying the restrictions would protect those stockpiles in its press statement.