Friday, January 23, 2009

Parallel Trade and UK Drug Shortages

As a follow-up to yesterday's Pfizer Tries to Choke Demand for Parallel Imports, check out NHS Drug Shortage Looms as Pound Falls from the UK's Health Service Journal.

According to the article, "drug manufacturers and wholesalers have begun rationing the amount of certain drugs each UK pharmacist, GP and hospital dispensary can buy."

The article describes a dramatic slowdown in parallel drug imports into the UK. The British pound has plunged due to the financial crisis, while the U.S. dollar has been somewhat spared because we remain the primary international reserve currency. See U.K. Pound Serves as Omen for Dollar from The Wall Street Journal.

Ironically, the weak pound is now encouraging speculators to export UK drugs to more lucrative markets. The executive director of the British Association of Pharmaceutical Wholesalers warned that the UK could become “the new Greece or the new Spain,” i.e., a primary source of drugs for the EU.

According to the article: “Manufacturers and wholesalers have responded by imposing quotas on the volume of drugs UK pharmacies can buy in an attempt to cut off supply to parallel exporters. Individual pharmacies are being monitored for unusually large orders, which might suggest they were selling drugs on into Europe.

Unexpected shortages in parallel exporting countries such as Greece or Spain are typical, but have been rare in the richer countries of Northern Europe. Nonetheless, I don't see how patients benefit from this type of unpredictable, currency-driven supply chain volatility.

Hopefully, any remaining fans of U.S. drug importation will take note of these unsettling developments.


Also related to yesterday's post, here are three rat-free sites that educate U.S. consumers about counterfeit drugs:


  1. Hi Adam, thanks for responding to my last comment and drawing some lines between PI and counterfeit drugs. With only the incidence PI drugs (all those recalls were related) and that one caught by the repackager itself, it should emphasize the responsibility and safety of this channel. This is the only time counterfeits made it into the UK channel in 10 years, compared to at least 6 times via regular distribution.
    I agree the shortages in PI exporting countries are terrible, though this is completely attributable to drug companies restricting supply to these countries in an attempt to combat the parallel market. I think the eventual solution will be improvement of distribution systems in less developed EU nations, combined with a move to more pan-European pricing as opposed to highly differential pricing models. It just seems a bit of a cop-out for Pharma to push hard on the safety issue which is fear mongering and not evidence based, while ignoring the importance of price disparity and their own inability to fully monitor and control distribution systems.
    I continue to fully agree that online and no-Rx sales are dangerous and foolish. Not enough work is being done to combat that supply channel. I think this is where our attention should be directed.

  2. I am amazed at how similar PI is to the pre-FFS/IMA issues in the US. Seems that similar practices in the EU would help. I realize it might be a little more complex but you'd think they'd learn from what the US has done.