Parallel trade must continue after end of transition period, asserts BAEPD chief

The British Association of European Pharmaceutical Distributors (BAEPD) has said parallel pharmaceutical trade should continue beyond 31st December 2020, the end of the 11-month Brexit transition period.

Arguing that the trade was justified on legal, economic and ethical grounds, Secretary-General of the BAEPD, Richard Freudenberg, said it greatly benefited taxpayers and patients in the UK – a net parallel importer of European Economic Area-licensed medicines “by some distance.”

Speaking at a conference in London on Tuesday, Freudenberg pointed to recent studies that attempt to quantify the economic benefits of the trade.

He said parallel imports (PI) had saved the Department of Health and Social Care more than £900m in the past 10 years.

He explained that much of the saving passed to the government in lower hospital medicine prices and through the clawback mechanism applied to pharmacies.

With an average clawback of 10 per cent by government, significant savings remained with the pharmacies, he added.

Freudenberg noted that indirect savings, such as from increased competition, were difficult to quantify due to lack of data but there was qualitative evidence pointing to their existence.

He stressed that at a time when the country was grappling with the issues of shortages, PI could provide “an alternate source” for medicines in short supply, adding that “a small range of UK medicines” were available only as parallel imports where the drug originator had terminated its manufacturing authorisation in the country.

Technically, if the UK leaves the EU without a deal, parallel exports into Europe would not be possible, the UK would be outside of the single market.

The BAEPD represents parallel importers of European Economic Area-sourced medicines. Its members’ businesses are based upon the ‘free movement of goods’ principle enshrined within EU law.

The Association works closely with the Medicines and Healthcare Products Regulatory Agency (MHRA) which regulates and licenses parallel pharmaceutical trade in the UK.

Also speaking at the conference, Dr David Guest, Manager, Parallel Import Unit, Licensing Division, MHRA, said its licensing scheme allowed a medicine authorised in another EU member country to be marketed in the UK, as long as the imported product had no therapeutic difference from the same UK product.

Expressing his “personal view,” Dr Guest said the current challenge from a regulator’s perspective was making parallel import work in the UK’s future relationship with the EU, which, according to him, would need two things: “an appropriate trademark regime and a way of establishing essential similarity.”

Echoing Freudenberg’s point, he said UK’s negotiations for a new trade relationship with the EU would eventually “define the landscape in which parallel trade” would operate in the country.

Dr Guest said PI was vital as “an alternative source of licensed supply during shortages,” which, he told the conference, had been “far more frequent” in recent months.

“We’ve always had occasional request from the medicine supply team about any potential PI licenses for a product they are interested in. There was a period last year when I was receiving daily requests,” he noted.

Giving examples, he said for some products – such as Monuril granules or Hygroton 50 mg, parallel imports had been the only means of licensed supply.

Monuril granules, an “ancient product,” was brought back as first choice medicine following a review of preferred treatments for urinary tract infections, Dr Guest revealed.

He said a recent trial done by the British Heart Foundation could not have been possible had PI not sourced the anti-hypertensive Hygroton tablets, following its manufacturer's withdrawal from the market.

Given the benefits, Dr Guest gave a cautious affirmation on the subject of whether PI would continue in the UK after 31 December 2020.