Weak currency helps UK pharmaceutical industry
pharmafile | October 1, 2008 | News story | Manufacturing and Production, Sales and Marketing | parallel trade
Pharmaceutical companies operating in the UK are experiencing reduced competition from European parallel importers, thanks to the weakness of the pound against the euro.
For many years, the UK has had the highest prices for medicines across the EU, making it a target for parallel imports from cheaper countries such as Spain and Greece.
In a surprising reversal of fortune, the country is now being used by parallel traders as a place to buy cheap medicines and sell them at a profit in higher-priced member states.
The pound has lost 12% of its value against the euro in the last twelve months, helping make British prices much cheaper by comparison.
IMS figures show imports in June 2008 had dropped by nearly 18% compared to the same month last year. The figures do not themselves show that parallel trade is now flowing the other way, but UK wholesalers – as well as the country's pharmaceuticals industry association – suspect the trend.
David Fisher, the commercial director at the Association of the British Pharmaceutical Industry, said: "Prices of branded medicines in the UK overall are currently 9th out of a basket of 12 comparator countries (12 being the lowest), and prices of generics are virtually the lowest.
"Therefore there are opportunities for the traders to make money by exporting to more expensive countries, particularly if current exchange rates persist."
The UK industry is happy to point out the development, as the lower prices support its arguments for greater access to new medicines in the UK.
The trend also means that UK affiliates are not seeing profit margins undermined by competition from parallel traders as much as before.
In European terms, however, the reversal in flow of parallel trade is no consolation, as it simply shifts unwelcome competition to another market.
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