European Drugmakers Seek To Ban Parallel Trade
4 CommentsBy Ed Silverman // June 20th, 2008 // 8:39 am
By seeking a ban on repackaging meds within the European Union, they hope to eliminate counterfeits, which is an increasingly hot topic. Drugmakers, Reuters notes, blame the legal practice of parallel trade - in which drugs bought in low-priced markets are repackaged and resold in high-price countries - for fueling counterfeit traffic. Parallel traders deny the charge.
“It is absolutely imperative, if we are going to try and protect consumers from counterfeits, that we do not allow a system that can take our medicines out of its packaging,” Arthur Higgins, Bayer’s ceo and head of an industry trade group, tells Reuters.
Under current EU rules, drugs can be repackaged, relabeled and even removed from blister packs, all of which drugmakers argue jeopardizes security and provides an opportunity for criminals. However, as Reuters writes, preventing repackaging would not only deal a blow to parallel trade, but could help pharma profits, since revenues are eroded by arbitrage dealings in their products across borders.
Nonetheless, counterfeit meds are on the rise worldwide, Reuters notes, adding that the World Health Organisation estimates they may make up 10 percent of the global market. The problem is increasing in Europe, with fake versions of life-saving drugs turning up in the supply chain in the past year.
Sanofi-Aventis chairman Jean-Francois Dehecq says counterfeiting is being conducted on an industrialised scale, often by the same criminal gangs which dealt in narcotics, Reuters writes.
Adam J. Fein
Surprisingly, the average European consumer receives almost no price break from parallel trade, especially in countries with flat-rate patient co-payments such as the U.K. and Germany. Instead, wholesalers, importers and exporters are the big winners from cross-border trade and repackaging because they absorb 80% or more of the price differences between countries.
This is why importation won’t work for the US. Safety down, but prices will be about the same. I wrote an editorial in Pharma Manufacturing magazine on this topic last year for the curious:
http://www.pharmamanufacturing.com/articles/2007/037.html
Adam
http://www.DrugChannels.net
Bob Freeman
Agree. Twenty plus years of case law in the EU means it unlikely this is going to work.
Dr. Sal Giorgianni
From Fein article: “Manufacturers are the biggest financial losers. ”
I believe that to many in Congress this is just the point. To be able to say that $$ have been pulled away from PhARMA. Impact on end-consumer is not as meaningful.
Bob Freeman
Some manufacturers deal directly with parallel traders to minimize the impact on countries like the UK.
One of the very real problems here that doesn’t get sufficient attention is the amount of product “lost” in the supply chain. Maybe 10-15% of supply is in a secondary market, and the figure applies to the US also. It’s not parallel trade, per se; rather, it’s a matter of supply chain security.