Pharmaceutical Exports On The Rise
The export of drugs out of the UK has risen as a result of medicine traders and pharmacists selling medicines to markets abroad in order to capitalise on the weak UK pound.
According to market research firm, IMS Health, in March 2009, pharmacists in the UK sold GBP30mn (US$45mn) worth of medicines (intended for sale in the UK market), to markets overseas. In order to contain exports and ensure there are no drug shortages, medicine wholesalers have put restrictions on the supply of approximately 370 medicines on those pharmacies believed to be over-ordering drugs with a view to selling them abroad for a profit. About 1,250 of the UK's 12,500 pharmacies are involved in parallel trading, according to IMS Health.
According to a spokesperson for the Pharmaceutical Services Negotiating Committee, wholesaler restrictions have made it more difficult for pharmacists to obtain certain medicines, including Nexium, AstraZeneca's ulcer therapy, and Plavix, Sanofi-Aventis' blood thinner. This is because pharmacists have to directly approach drug manufacturers for additional units after a usual quota for a particular medicine has reached pharmacists; however, pharmaceutical companies including Pfizer and AstraZeneca have begun rationing the quantity of drugs released to British pharmacies, GPs and hospitals to prevent their being re-exported abroad.
When the UK pound was strong, traders bought drugs in European markets such as Greece and Spain for sale in the UK, where prices were higher. As a result of the declining value of the UK currency, traders are now buying medicines in the UK, packaging them and selling them in countries such as Germany and Scandinavia. According to the Health Service Journal, in the last four months of 2008, the Medicines and Healthcare Products Regulatory Authority issued 41% more export certificates than in the same period of 2007.
Martin Sawyer, executive director of the British Association of Pharmaceutical Wholesalers, said there is a lot of evidence of British products in the Scandinavian countries and in Germany. There is a danger that the UK could become the new Greece or the new Spain - a reference to the drug shortages these countries have experienced in the past, when targeted by traders looking for cheap medicines.
In 2008, BMI calculated UK pharmaceutical imports to have reached a value of just under US$20bn, and we expect they should reach just over US$30bn by 2013, equating to a 2.2% constant annual growth rate (CAGR). Meanwhile, in 2008 sector exports were calculated at US$31bn and are expected to rise to just over US$36bn by 2013, equating to a 3.8% CAGR. The leading destination for UK pharmaceutical exports is the US, followed by EU countries (primarily France, Germany, Italy and the Netherlands), Japan and Australia. BMI believes the increase of pharmaceutical exports is not a long-term threat to the UK medicines supply. The window of opportunity to earn profits from the overseas sale of drugs will gradually diminish as the UK economy recovers and the UK pound strengthens.