Key Summary
- The HDA UK expressed concerns about lack of relief for the medical supply chain.
- The Chancellor had announced relief to protect drivers and businesses from rising fuel costs owing to the Middle East conflict.
- The CEO of the association spoke to PB about the concern.
The Healthcare Distribution Association (HDA) UK has said that while the Chancellor announced tax relief on fuel for hauliers in the UK, no targeted relief is being provided for the medicines supply chain affected by the war in Iran and its repercussions across the Middle East.
The government had on Wednesday (20 May) granted general hauliers a 12-month road tax holiday saving up to £912 per vehicle, whilst slashing red diesel duty to its lowest rate in over 20 years until the end of the year.
HDA CEO Alex Williams told Pharmacy Business that while the measures announced are a positive step for the broader UK economy, the HDA is deeply concerned about the lack of targeted relief for the medicines supply chain.
“Our members are grappling with unprecedented cost increases, which threaten the resilience of the supply chain that underpins patient care,” he said.
The national body was in early discussions with the Government on unlocking further investment in supply chain resilience. But Williams said the absence of specific support for medicine wholesalers in the announcement is another missed opportunity to address these urgent challenges.
Concessions being sought by HDA
On being asked what concessions the government should provide the HDA, Williams said, "Our members have seen fuel costs rise in excess of 25 per cent since February, and we expect the additional fuel bill across our sector to exceed £10 million this year.
“This is an unforeseeable cost that has not been budgeted for and will likely have to be passed on in some form. The HDA and our members have asked Government for targeted support to offset these costs, and we have invited them to think creatively about how to deliver that, perhaps via time-limited direct financial support, or by providing an increase in NHS budgets for our members' customers, such as pharmacies and hospitals, so they can recoup any fuel surcharges if these are passed on.
“So far, Government has declined to help our sector, but we remain hopeful that through continued dialogue we can find a workable solution that protects the medicines supply chain.”
Fuel price hike
Williams said that the rise in fuel costs just compounds what is already a very challenging environment for medicines distribution.
He said that there have been many factors which have been weighing down the industry including policy decisions on the national minimum wage, national insurance, business rates, and energy. The rising price of fuel has only added to the struggle.
“With such price pressures feeding through the system, it is inevitable that the entire supply chain, from manufacturers to dispensaries, will feel the pressure, with the end customer likely to feel the effects hardest.
“It is therefore critical the Government recognises this and provides support appropriately so that patient access to medicines is not compromised. Our goal is to ensure these pressures are addressed early, so pharmacists and their patients continue to receive the reliable service they depend on."
Technology and innovation
The HDA is seeking a constructive approach from the Government to give its members the confidence and economic headroom required to invest for the long term. Additionally, they are asking for support regarding further investment in technology and innovation to help mitigate ongoing cost pressures and improve efficiency across the supply chain.
William also suggested a solution, proposing a capital allowance similar to the pandemic-era super-deduction to incentivise investment.
He also called for priority access to net zero grants so the sector can accelerate the electrification of its fleet and operations.
"Millions of patients rely on our members' deliveries every single day: this is infrastructure that the nation simply cannot do without. With the right support, our members are ready to invest in the UK healthcare supply chain, making it more resilient, efficient, and sustainable,” he added.
