The high price of principles

Parallel trade has for many years been cited as the weakest link in the pharmaceutical supply chain, and the point at which most counterfeit products enter legitimate distribution channels before ending up in pharmacies and hospitals.

But until now - in the UK at least - another of the serious consequences of this legal but somehow not quite respectable practice has not been subjected to the full glare of the media spotlight.

Before the current economic slowdown, a growing number of prescriptions in the UK had been filled by drugs intended for other EU markets but diverted to the UK where they could be sold at a higher price.

Now, however, the weakening of the pound against the Euro has put the boot firmly on the other foot, with the result that many pharmacies are experiencing serious difficulties in obtaining adequate supplies of more than 50 branded drugs, such as Femara, Plavix, Xenical and Zyprexa.

Emergency shipments of drugs to pharmacies to cover the shortfall rose from just over 6,000 in the first five months of 2008 to more than 77,000 in the same period this year. Even a sharp increase in the supply of drugs by manufacturers has not been enough to compensate for the rise in demand.

But the problem is less one of economics than of politics. Currency fluctuations and variations in national pricing strategies and reimbursement schemes may create the incentive, but it is EU regulations that allow the practice to continue. A rise in the value of sterling against the Euro will not halt or even ameliorate the situation - it will simply move the problem of shortages to other EU countries.

The real issue is that the safety and security of the pharmaceutical supply chain continues to be sacrificed on the altar of the principle of the single European market. Parallel trade adds no value to the supply chain and benefits no one except the middleman. Lower prices are not passed on to patients of national health authorities, nor are profits passed back to the manufacturers. Far from reinforcing the single market, it distorts competition.

Does someone have to die to create the political will for change?