Select Committee on Health Written Evidence


Memorandum by the Category Manager, Boots the Chemists (PI 34)


  I am the Category Manager, Dispensing Buying, for Boots The Chemists, based at our Head Office in Nottingham. The subject of my submission is Parallel Imports of Prescription Only Medicines. Re your Terms of Reference, this topic probably relates most closely to "the provision of drug information and promotion" but also touches on "product evaluation, including assessments of value for money".


  The main thrust of my submission is to draw the attention of your Committee to the difficulties experienced by UK community pharmacies, including Boots, in sourcing stock of Parallel Imports, due to the activities of the major pharmaceutical companies.

1.  Background

  The current UK system of reimbursement to community pharmacy of NHS prescriptions encourages pharmacists to buy at the lowest possible cost, and most of this cost benefit is "clawed back" by the DoH by means of a discount inquiry. One way of achieving low cost purchasing is for pharmacists to purchase branded drugs from EU countries where the cost price is lower than in the UK. The importing of PI's into the UK has been taking place for many years and is undertaken by most pharmacies, independents as well as multiples. Indeed, the DoH assumes a level of PI purchase when setting the clawback rate. Therefore, parallel trade in POM's achieves two objectives:

    (a)  It helps underpin the viability of community pharmacy in the UK.

    (b)  It helps make savings to the NHS drugs bill.

2.  Quotas in Europe

  Sourcing of PI has become more difficult recently, mainly due to the introduction of a quota system by pharmaceutical manufacturers, which limits the quantities of POM's available to each wholesaler in each EU country. Manufacturers will claim they are trying to more closely match supply to national demand, but in reality they are trying to restrict any surplus available in low-cost countries for export to higher-cost countries such as the UK. This happens in spite of further confirmation, in January 2004, from the European Commission that parallel trade in pharmaceuticals is legal and should not be restricted. We can provide specific examples of products previously freely available as PI where supply has ceased but the specialist importers from whom we purchase will be able to provide more detail. A list of importers' contact names and addresses can be provided if required.

3.  Quotas in the UK

  One pharmaceutical manufacturer, Eli Lilly, has introduced a quota system in the UK. They call this their Supply Chain Management System, which allocates a quantity of product to each wholesaler, based on previous demand. Previous demand covers only UK stock and excludes any PI purchased. The quantities are allocated unilaterally by Lilly and no discussion takes place with the wholesaler. This has resulted in Boots regularly running out of stock of some products towards the end of each quota period and being unable to supply our pharmacies from our central warehouse. As a result; we have had to fall back on our emergency wholesaler, Alliance Unichem, to make up the shortfall, and this in turn has caused out of stocks for them. We know of at least one instance when one of our pharmacies has been unable to fulfil a patient's prescription as a result. In spite of repeated requests to correct this, Lilly refuse to meet or to adjust our quotas.

4.  Patient Safety

  Parallel trade in the UK is carefully regulated by the MHRA and has a good patient safety record. In spite of this, there appears to be a growth in subjective opinion, suggesting this may not be the case in the future. A recent example is the report published in May 2004 on Parallel Trade in Medicines by the Social Market Foundation, the research for which was funded by Pfizer. While this report was on the whole well-balanced it did contain some remarks which are either exaggerations or difficult to substantiate. For example:

    (a)  IMS, who are a well-respected data analysis company in the pharmaceutical industry, are quoted as saying that a medicine can change hands up to 20 or 30 times through parallel trade. IMS have subsequently admitted to me on the telephone that this was a throw-away remark which amounted to "hyperbole". A contact name and address can be provided if you wish to follow this up.

    (b)  Suggested links between parallel trade and counterfeit medicines entering the EU, when in fact there is no evidence to substantiate this.

  We understand that Pfizer are also funding another report, to be undertaken by another research think-tank called Civitas, which is aimed at a specific investigation of the safety of parallel imported medicines.

5.  Internet

  It is important to distinguish between legitimate parallel trade in prescription medicines, which is restricted to within the European Union countries, and carefully regulated, and individuals sourcing medicines themselves from other countries via the internet. The latter clearly could incur patient safety risks which do not apply to true parallel trade.


  Parallel trade in prescription medicines is a carefully regulated, legal activity which contributes to savings in the NHS drugs bill, helps underpin the viability of community pharmacy in the UK and poses no risk to patient safety. The UK Government should, therefore, do all in its power to ensure that quotas do not prevent supply of Prescription Only Medicines to community pharmacies and put patient safety at risk.

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