APPENDIX 12
Memorandum by the Category Manager, Boots
the Chemists (PI 34)
INTRODUCTION
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".
SUBMISSION
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.
CONCLUSION
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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