Pharma quotas ‘do not affect parallel trade’
pharmafile | June 23, 2009 | News story | Manufacturing and Production |Â Â EAEPC, parallel tradeÂ
The stable market for parallel imports in recent years suggests pharma quotas on wholesalers have not dampened the trade, according to a parallel distributor industry organisation.
Heinz Kobelt, secretary general of the European Association of Euro-Pharmaceutical Companies (EAEPC), says the overall market for parallel-traded pharmaceuticals has stayed consistently around the 4 billion euro mark over the last three or four years.
This is despite efforts by drugmakers to set up distribution deals which limit the amount of medicines that can be shipped to wholesalers in an attempt to stop surplus inventory being exported for sale in countries with higher prices.
In some countries, notably the UK, the wholesaler is being bypassed altogether by direct-to-pharmacy (DTP) distribution models, although these have proved controversial.
For example, last year the UK’s Office of Fair Trading investigated the practice and concluded pharma could continue to use DTP tactics, but warned they might push up prices for the NHS. Drugmakers employing this system argue that it stops counterfeit medicines finding their way into the supply chain.
“Despite the quota systems that pharmaceutical manufacturers have rolled out in almost all national markets and for all pharmaceutical wholesalers in the EU, the volume of parallel imported products has not been affected at all,” The EAEPC’s Kobelt said.
One reason for this is that trade in parallel imports tends to be fluid between EU countries, and when one market contracts, another tends to expand.
For example, Germany overtook the UK as Europe’s biggest parallel trade market around a year ago and now has a value of approximately 2 billion euros, according to Kobelt.
The UK market has been shrinking dramatically from a peak of around 2 billion euros and is now estimated at around 1.1 billion euros, he added. A major factor has been price cutting under the Prescription Price Reimbursement System, but turbulence in exchange rates, a Europe-wide driver, accounts for some of the decline.
“Currency factors have become an important factor in shaping the parallel trade market in Europe,” said Kobelt. For example, Sweden was traditionally a strong market for parallel imports but has been suffering from weakness in the kroner.
As most parallel imports are sourced in euros, margins are cut when there is little difference in the exchange rate for currencies outside ‘Euroland’, he said. Some sourcing takes place in eastern European countries which have not yet adopted the euro, but most of this supply is blocked by factors related to the accession treaty.
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