Instant profit in parallel import of medicines Jun03
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
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!
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
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.
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.
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!
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.
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.