Select Committee on Trade and Industry Minutes of Evidence


Examination of Witnesses (Questions 300 - 321)

TUESDAY 27 APRIL 1999

DR J PATTERSON, DR A HESKETH AND DR D BRICKWOOD

  300. When did you start manufacturing in Ireland?
  (Dr Hesketh) I do not have those figures.

  301. One of the interesting things is that where corporation taxes are 10 or 12 per cent it is attractive. Dr Brickwood, what about your organisation?
  (Dr Brickwood) We have manufacturing in Cork. Active substances.

  302. Big operation?
  (Dr Brickwood) It is not the largest in Europe but it is sizeable.

Mr Laxton

  303. What was the attraction?
  (Dr Brickwood) Tax rates, employment, etcetera. There are a variety of factors that go into the mix. You consider a mixture of factors.

Chairman

  304. Nothing to do with the price that you are able to get out of the British taxpayer for your pharmaceuticals in the United Kingdom, or was it just cheaper production costs?
  (Dr Brickwood) I do not think we took the price we could get out of the United Kingdom into account.

  305. Dr Patterson mentioned how much tax his company pays for the number of people employed here. How they are good British citizens. They seem still to be good British citizens in the sense that they are choosing to invest in the United Kingdom. I know you are in places like Winchburgh(?) in my constituency. It seems that this movement has already started in some of the companies away from Britain to other places, and it has nothing to do with the prices that the British Government are trying to negotiate with you for drugs. You move for other reasons as well.
  (Dr Patterson) There is no doubt—and I will answer on behalf of my colleagues on this particular one—that 5 per cent of the world's pharmaceuticals market is in the United Kingdom. You cannot have all your cost bases in the United Kingdom as global player, so you have to have some global spread of your cost bases. There is an attraction of putting capital in the United Kingdom in relation to how the PPRS operates but that is not the only factor. There is proximity to markets, and other market places in other countries do compete for markets, as you would expect.

Mr Laxton

  306. Product labelling and packaging. We have had some evidence from the Parkinson's Disease Society concerning a particular drug that was being supplied by Eli Lilly, where apparently instructions within this drug were written in Spanish, which perhaps caused some slight difficulty, I suspect, for patients. Are there any other examples that you would know, where you would like to flag up instances of that nature.
  (Dr Brickwood) We have four examples. John, if you would like to start with the Zeneca example.
  (Dr Patterson) This is Zoladex. This is an injectable medicine for prostate cancers. This is a pack which was parallel imported into the United Kingdom a couple of years ago. The packaging, (I will pass it to you), is a Spanish pack with a very small over-label with English on it. This depot here, this sterile container, is placed underneath the skin of the abdomen and it diffuses out over a month and controls the cancer. They have simply taken a pair of scissors, cut off our original attachment, and sellotaped on their own version of the instructions and the product leaflet. In translating it back from Spanish, the parallel importer has got the indication and the site of injection wrong. This is a particularly florid example. It says it is used either in cancer or premenstrual problems resulting in pain. Actually, it is indicated for prostate cancer or the treatment of a severe disease called endometriosis, so not premenstrual problems. It also says: "This can be injected either into the abdomen or into the chest." Now, if you start sticking needles into people's chests, you are in serious trouble. That is an example. I will pass it round to the Committee. This is one such product, which was parallel imported from Spain, and we stopped it very quickly. There are many others which David can talk about.
  (Dr Brickwood) This is a lipid lowering agent. What has happened here is that normally there is a patient information leaflet, which goes into the pack, that is in English. This one came from Holland, I think. The importer should take out the Dutch leaflet and put in an English leaflet, a direct translation of all the problems associated with Zoladex. There is nothing in it at all.

Mr Butterfill

  307. I can confirm that because I have taken that drug and had exactly that experience.
  (Dr Brickwood) This one is a foil and what happens is that it is a blister pack. You can see here that you have the blisters at the front and you have to pop it out. You need the days of the week on it. In order to do that you have to push it through. What has happened is that the blister on the front, they have put the foil on the back with Monday, Tuesday, Wednesday, Thursday, instead of Lundi, Mardi, Mercredi, and you cannot pop it out. Again, this is for hypertension. It probably could be prescribed to elderly patients who are unable to pop out easily without damaging their tablets. Then the last one we have here is again a lipid lowering agent. This is what the patient receives. An English leaflet. One bit [of tablets]. Another bit. Two more tablets. Two more tablets. This bit has the batch number on it if you ever need to recall it. This part has the batch number. These two little bits do not, so you do not know where your batches have come from, and the recall process is up the Swanee essentially. They are examples and they bring home to you the problems you can encounter as a patient.

Mr Laxton

  308. What powers do the Medicines Control Agency have in this particular area over the licence for importing, and is there anything you can do with them, as an Association, to tackle issues of this very nature?
  (Dr Brickwood) We work with them. We bring these to their attention. They have an enforcement section for their responsibility. They pursue cases like this rigorously in order to try to improve the quality of products that have come into this country.
  (Dr Patterson) There are over 2,000 parallel import licences existing. It grew by 18 per cent last year. So it is not that difficult to get a parallel import licence.

  309. The pharmaceutical importers claim that there is this audit process for batch numbers which you can go back to. Clearly this demonstrates to us that this is a bit pie in the sky if you have foils being chopped and changed in that way and there are batch numbers in each section.
  (Dr Patterson) And in the rare event we have a recall, we are going to be going to Spain saying that we sold this in Spain. Then it has to come back through the Spanish wholesaler, whoever they sold it to, who is the parallel trader, before we eventually discover that this product is back in the United Kingdom. This might take a while.

  310. We are led to believe by the Medicines Control Agency that 10 per cent of products were associated with parallel trading processes. What is your solution to this? It could be a potentially dangerous problem for particularly aged people or people who are not fluent in Spanish, for example.
  (Dr Brickwood) A solution is difficult. We have to work consistently and assiduously with the Medicines Control Agency, to try to attempt to track down problems like this, and take corrective action and help them as much as we can.
  (Dr Patterson) The solution is part of the bigger picture, where we have a trading situation whereby the whole distribution process, which is quite well controlled, is actually not operating in such a way that a product goes halfway round Europe before it ends up in the consumer's hands. We have, in a deregulated open market place, the ability to put it into that market and watch it to make sure it is properly dealt with.
  (Dr Brickwood) We do extensive studies, as part of the R&D phase, to test the stability of these products at various temperatures. When it falls out of our channels, again storage can be critical. Some medicines are temperature sensitive, need to be held below 8 degrees centigrade. Others will start to degrade slightly more quickly. So there are issues with regard to stability and storage as well that need to be monitored carefully.

  311. Do you think you can clearly resolve or assume all is OK—presumably it is in your supply chains direct to your wholesalers—but beyond them?
  (Dr Brickwood) Through normal established wholesale channels, which are checked by the Medicines Control Agency, that is fine.

Mr Butterfill

  312. The Association of Pharmaceuticals Importers state that the entry of counterfeit products into this country is" almost unknown". Would you agree with that?
  (Dr Patterson) I think it is luckily at a relatively low level. However, there are now increasing numbers of examples, first of all, of stolen material coming into this country.

  313. Stolen but not necessarily counterfeit?
  (Dr Patterson) Stolen but then not treated necessarily in the same way. Stolen and then counterfeit packaging. We have had this product coming in from Italy where they reboxed it in a way which was absolutely untrue to bring it back into date, the date having expired. In the world at large, the WHO estimates that some 5 per cent of medicines are counterfeit, which are circulating around the world. So when we get into this whole issue of exhaustion, which you were bringing in earlier, outside the European Union there is going to be a significantly increased chance that we will see counterfeit and stolen goods coming through those channels.

  314. I think we accept that counterfeiting does go on in the world at large and our concern obviously is to protect United Kingdom consumers. You are saying that there is some evidence that a small amount of counterfeit drugs are coming in here, is that what you are saying?
  (Dr Patterson) Yes, on the whole that is true, but as parallel trading increases we are convinced counterfeiting will increase.

  315. I just want to concentrate on counterfeiting. The Medicines Control Agency has the duty to check all of this and monitor it. Is there some loophole that needs to be closed? Is there something that we need to do to stop even this rather small amount coming in?
  (Dr Hesketh) One of the issues is enforcement. It is detection of counterfeits. The industry spends a great deal of time and effort and money in trying to detect, by putting special marks on packs and so on, preventing counterfeiting. However, when it occurs, detection and enforcement is often intellectual property rights, which are going to be enforced, in order to have a legal right to prevent the counterfeiting. It is a difficult issue even to detect in the first place.

  316. Some of your colleagues, notably SmithKline Beecham, give us the impression that it is far more widespread than either you or the ABPI are suggesting. They say: "Concerns about counterfeits lead to patients stopping taking their legitimate medicines with serious consequences." Is there any evidence to support that sort of claim?
  (Dr Hesketh) Global certainly.

  317. Let us talk about the United Kingdom because that is what we are here to be concerned with, in the United Kingdom.
  (Dr Hesketh) There is evidence in the United Kingdom.

  318. Patients are stopping drugs because they are concerned about counterfeits?
  (Dr Hesketh) That is probably a slight over-statement but there are concerns, and a individual patient who may be concerned may well take that reaction, yes.

  319. Are you sure that this is not a concern about parallel imports, because the noise you are making about parallel imports and the suggestion you are making is that they are not always quite as reliable as they should be. Really, if there is evidence that patients are stopping taking drugs, this is because of concerns you may have raised on parallel imports about genuine counterfeits, which is a contradiction in terms but you know what I mean.
  (Dr Hesketh) We do have a rightful concern that parallel trading can mask counterfeit products. We do not know the extent of this. That is the whole problem.

  320. You do not think you might be adding to patient concern by making a fuss about parallel imports, which is a commercial concern, a legitimate one, which we understand; but we are worried about the patient's view of this.
  (Dr Hesketh) I do not think we exaggerate the problem.
  (Dr Brickwood) And we should not.

Chairman

  321. Thank you very much. If there is any other information that we require we will be in touch with you.
  (Dr Brickwood) Thank you very much.





 
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