Instant profit in parallel import of medicines Jun03

I refer to the letter from Mr. Foster (General Secretary of the British Association of European Pharmaceutical Distributors) in response to my article “EU price for medicines” published in the Asian Voice on 19th April, 2003.


The EU does not have a single, open, competitive market for over the counter and prescription medicines. Each of the 15 Member States, with different populations, per capita income and health expenditure, has its own regime for financing the cost of medication. The regimes differ in payments to manufacturers/suppliers of medicines, payments by patients to the pharmacists for every item on their prescription and the contribution from employers for national health insurance. Therefore, EU Member States negotiate directly with pharmaceutical manufacturers a price regime suitable for their national health services. As a result, prices paid by Governments to manufacturers for prescription medicines differ widely e.g. very low in Greece and very high in the UK – not a level playing field!


It is this price difference that UK parallel importers exploit to make their millions. They use this regulated market in medicines to buy medicines from a low-price country like Greece for re-labelling/re-packaging and sale to pharmacies, doctors and hospitals in the UK. Their huge profits neither benefit UK research or development of new drugs, nor do they benefit the patients who use our NHS as they are obliged to pay the fixed price (£6.50) for every item on the prescription irrespective of whether the product they receive was originally sold in the UK or re-imported from Greece!


Mr. Foster’s claim that such profits keep the independent pharmacist “afloat” is untrue as the NHS estimates that only 15% of prescription items dispensed are sourced from parallel traders and the discount offered to the pharmacist is clawed back by the NHS. Furthermore, any large publicly owned chain of chemist shops (Gehe, Phoenix and Alliance Unichem) is free to parallel import and profit. Like the parallel traders, they will not share their profit with the independent pharmacist.  It is inaccurate to suggest that the scheme I proposed was initiated by the pharmaceutical industry – I first proposed it in1999 in the European Parliament and have since discussed it with the industry.


Mr. Foster chooses not to mention what I have done in the European Parliament to promote an open, free and competitive market for prescription medicines as he will surely be aware of my Amendment 95 to the recent EU Pharmaceuticals Directive requiring industry to offer “uninterrupted” supply of essential medicines to wholesalers. This was fought hard by the pharmaceutical industry as they prefer to use quotas to control parallel trade.


Therefore, the profit of the parallel importer is the net loss to the pharmaceutical industry, the NHS and the taxpayer. It is better for the UK government to negotiate directly a price regime based on my proposals that will allow the biggest saving for the NHS and UK taxpayers. It will help 1m employees of the NHS and millions of patients who will enjoy better funded services. Sadly for Mr. Foster’s members, it will be the end of a short bonanza!

I believe that the EU must aim to establish a policy that encourages free trade across all member states. However, if there is a need to regulate markets e.g. medicines, then it must adopt a system that favours maximum benefit for the taxpayers, the governments of Member States and industry in that order. My proposal suggests a single EU reference price for medicines with differential re-imbursement schemes for EU Member States. Many Members of the European and Westminster Parliaments, major pharmaceutical manufacturers and full-line wholesalers and the European Commission also support my idea. I hope EU Member State governments will support it so that taxpayers and patients can benefit directly.


As an elected Member of the European Parliament, I must help create jobs, economic prosperity and social stability – I can do this best by promoting free enterprise on a level playing field.