EU Battles Medicine Shortages - European governments are under pressure to take regulatory action, but solving the problem of medicine shortages is not as straightforward as it seems. - BioPharm

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EU Battles Medicine Shortages
European governments are under pressure to take regulatory action, but solving the problem of medicine shortages is not as straightforward as it seems.


BioPharm International
pp. 16-17

PARALLEL TRADING

Some manufacturer groups are emphasizing that the main reasons for shortages are not so much because of manufacturing failures but due to inadequacies in the supply chain, especially at the wholesaling and retailing stages. They point to the variety of reimbursement systems among EU states that has led to big differences in medicine prices between countries. These disparities are heightened by fluctuations in exchange rates between the eurozone of 17 countries and other EU states with their own currencies, such as the pound in the UK, which is one of the few large EU pharmaceutical markets outside the euro area.

These gaps between national prices has triggered a considerable amount of parallel trading in medicines with products manufactured to serve the needs of a country with low prices being diverted by wholesalers, many of them pharmacists with small short-line wholesaling businesses, to EU countries with higher prices. In the UK, an EU country with a high level of parallel trading, an estimated 10–15% of the country's 12,500 community pharmacists are using wholesale dealer licences (WDL) to export medicines to other EU states.

"Parallel trading by pharmacists with wholesale dealer licences is the main cause of current shortages of branded medicines in the UK, not manufacturing problems," explains Sam Ogden, a supply-chain specialist at the Association of the British Pharmaceutical Industry (ABPI), London, to BioPharm International.

"UK medicine prices are, at the moment, among the lowest in Europe so there is a big incentive for pharmacist wholesalers to divert medicines supplied to them for dispensing purposes to other European countries with higher prices."

Parallel trading is legal in the EU because the right to benefit from the free movement of goods underpins the Union's single internal market. As a result of it, the ABPI claims that manufacturers oversupply the UK market with their branded medicines by an average of 120–130%. Ironically, this excess supports the case put forward by the parallel traders that their activities are helping channel surplus supplies to countries with scarcities of medicines. Disagreement between different groups about issues like parallel trading merely highlights the complexities of sorting out the EU's problems with medicine shortages.

Sean Milmo is a freelance writer based in Essex, UK,
.


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