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Retail pharmacy stronger in the EU, says Sigma


Retail pharmacy stronger in the EU, says Sigma

The loss of parallel imports would no doubt reduce the purchasing power of independent pharmacy

Bhavin Shah, director of Sigma Pharmaceuticals, and Claire Ward, chair of Pharmacy Voice (writing in a personal capacity), consider what Brexit would mean for independent pharmacy

"As pharmacy contractors grapple with the prospect of a 6 per cent cut in the global pharmacy budget, few will be thinking about the forthcoming referendum on EU membership. For many it may seem to be a ‘politicians’ debate far from relevant to their own life and business. However a cut of £170m to the pharmacy budget may be just the  start of closures, job losses and reduced pay in the industry. A vote to leave the European Union may deliver an even greater blow to independent pharmacy and the wider sector, that few contractors are even discussing let alone planning for.

"Sigma, along with many other wholesalers, benefits significantly from access to the European parallel import market for branded pharmaceuticals. So too do independent pharmacy customers, keen to maximise the margins than can be passed on. Free trade within the EU is one of the biggest benefits of membership.

"At their peak in 2003, parallel imports saved patients and the NHS around £228m per annum. Despite a fall in the parallel import market since then of approximately 40-50 per cent, the savings are still quite large. In fact, the savings are probably much greater because of the effect of parallel trade on price competition as PIs form the only real price competition in the market for patent-protected medicines.

"Outside the EU, the Norwegian pharmaceutical market is the only non-EU member that is allowed to partake in parallel imports due to it’s membership of the European Economic Area. Some will say we would be able to do the same if we vote to leave the EU. Yet we can't be certain of such an arrangement and those who argue for the UK to have a similar status to Norway forget that the Norwegians still have to pay significant contributions to the EU and abide by certain treaties, without any say or influence on them.

Giving independent pharmacies choice

"Parallel imports also give independent pharmacies the choice of sourcing medicines at cheaper prices and having an alternative to UK brands when there are market shortages. The loss of parallel imports would no doubt reduce the purchasing power of independent pharmacy if the availability of patented medicines became poorer and the suppliers of patented medicines were reduced due to the inability to trade in parallel imports.

"Whilst little manufacturing of generics takes place in the UK, there are significant benefits from generic manufacturing in Europe. Currently a product can be manufactured in Poland and be released for sale in the EU in Poland. Brexit could lead to increased manufacturing costs for generic medicines if European-manufactured medicines are viewed in the same way as MHRA-approved products manufactured in India or China which have to be QP released for sale in the UK

"We hear from the 'Leave' campaigners that money saved from our membership of the EU could be reinvested in the NHS. What they do not mention is that the NHS has also benefited from savings via PPRS. Without parallel imports it is uncertain how patent owners would behave due to the lack of price competition, and this again could drive down the ability for the NHS to generate savings in pharmacy.

The impact on research

"Just recently we saw some of the largest global pharmaceutical brands join forces to remind voters of the impact that Brexit would have on research and collaboration within the pharmaceutical sector. Millions of pounds are currently invested by the EU into research in the UK, who knows how this could be affected.

"The last impact naturally will be on the day-to-day running of retail pharmacy. Due to the EU, laws are harmonised across the EU meaning that retailers have a large talent pool to choose from for their businesses. There is certainly a risk of pharmacist and healthcare professional migration due to Brexit.

"Whilst a lot of noise is being made in the Brexit debate on the economy, immigration and other factors – the impact on independent pharmacy and the health sector in general should not be ignored. June 23 will be yet another important date in the pharmacy sector calendar."

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