BREXIT
AS ARTICLE 50 IS FINALLY TRIGGERED, ALAN CAMERON, PHARMACY CONTRACTOR AND GENERICS BUYING DIRECTOR AT BUYING GROUP, EDINPHARM, TELLS SP ABOUT THE EFFECT BREXIT HAS ALREADY HAD ON THE GENERIC BUYING PROCESS.
THE ONLY CERTAINTY? UNCERTAINTY…
On 23 June last year, the UK underwent a seismic shock when the Leave campaign was victorious in the Brexit vote, and the UK began to make plans to leave the European Union (EU) after 43 years. While no-one was quite sure how this exit would play out, everyone was agreed on one thing: the only thing we could be certain of was uncertainty. Put simply, the wheels had been set in motion for a process that had no precedent or pattern to follow.
As community pharmacists, we were perhaps particularly anxious as to what this exit would mean for our industry. An overall atmosphere of uncertainty was certainly not on Scottish community pharmacists’ wishlist at this time. With the NHS struggling to meet demands for its services and community pharmacy being increasingly moved to the ‘frontline’ of primary care, the last thing we needed was to be operating on shaky ground. Where, we wondered, would Brexit and this rampant uncertainty hit pharmacy first?
As it turned out, it would be generics
that would first be affected by the state of flux. The most immediate – and obvious – fallout from the Brexit result on the market was the sharp depreciation of the pound against the euro and – perhaps even more importantly – against the US dollar. Since most generics are bought abroad using US dollars as opposed to the pound, the pound’s slump against the dollar meant that imported medicines became more expensive in the UK while, simultaneously, exports became cheaper.
In the period leading up to Christmas, there’s no doubt that generic prices were – to put it mildly - all over the place. In my role, I provide pricelists and buying schedules for the more than 120 Edinpharm members based in Scotland, Northern Ireland and the North of England and obviously, in my role, my intention is to use the combined buying resources of the group to both source better prices and supply to maximise profitability for our members, but, in the run-up to Christmas, I definitely noticed the fallout from the fluctuation in the
pound. Over a short period of time, I noticed a sharp increase in the cost of some products and a drop-in availability of others from suppliers, probably as a result of panic buying.
Since then, the fact that the pound seems to have steadied against the dollar means that generics buying has similarly steadied itself, but there’s no doubt that there’s still a lot of uncertainty around this issue. We have had, to some extent, a ‘dress rehearsal’ for what may lie ahead.
Generics wasn’t the only area in which there was uncertainty, however. Running in tandem with the fluctuation in the generics buying was also a period of uncertainty in the parallel imports (PI) market.
The UK has always been a substantial net parallel importer, although it has to be said that, in recent years, the relatively low prices of some drugs here has complicated the issue of parallel trade. The pre-Christmas slump in the pound probably boosted the overall volume of parallel exports from the UK, but, simultaneously,
had a detrimental effect on parallel imports, mainly through a curbing on the demand for these imports.
While, as with generics, this was technically the result of the weakening of the pound against the US dollar, it was fundamentally the fallout from the uncertainty over Brexit. While generics buying may have steadied itself somewhat, I think the parallel imports market is still very weak. It certainly hasn’t returned to its previous level and definitely isn’t what it was. I can see this clearly from the list that we provide for independent pharmacies, which now definitely contains fewer PIs on the buying schedule.
There’s no doubt that this will definitely have a negative effect on the NHS budget. This For a start, NHS spending will definitely increase if generics prices rise and, since the NHS already recorded a £2.45 billion budget deficit in the year 2015-16, it doesn’t bode well. In the event that governments have to make economies – which looks increasingly likely – prescription drug spending would be an inevitable target.
The events of the pre-Christmas period gave us all, as pharmacists, a hint of what may be to come. With Article 50 now triggered, I think that we can safely say that uncertainty will be the name of the game from here on in! •
SCOTTISH PHARMACIST - 41
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