The Pharmaceutical Journal Vol 264 No 7088 p427
March 18, 2000 News

Generics market has changed, says BAPW chairman

The market for generic drugs in the United Kingdom "has changed and will never return to its pre-1999 condition", the chairman of the British Association of Pharmaceutical Wholesalers (Mr Sandy Young) told the association's annual dinner in London on March 13. He described the previous 12 months as "traumatic" and put the blame for the problems of shortages in the market on "short-line wholesalers, perhaps aided and abetted by generic manufacturers and the lack of direction from the Department of Health" which, he said, had closed its mind to the consequences of introducing patient packs. Mr Young said that patient packs had increased the costs of production and distribution: "It costs as much for a wholesaler to hold and distribute a cheap generic as it does an expensive ethical and, therefore, they are less profitable. Pharmacists are also buying less product, but more frequently, thus increasing the cost of distribution.

Sandy Young: traumatic year

"Despite the high volumes of generic sales, many products have fallen into the 80 per cent of a full-line wholesaler's inventory on which profits are not made. Members [of BAPW] may well find it necessary to insist on minimum order levels in order to cut costs."
Mr Young said that the association's cold chain temperature control protocol had not been adopted by short-line or continental wholesalers. This was worrying as it allowed short-liners to give discounts on what were supposed to be zero discount lines - "a loophole which needs to be plugged" - and allowed parallel importation of these products.
In response to Mr Young's speech, Dr Gordon Munro (head of enforcement, Medicines Control Agency) welcomed the introduction of the protocol. He said that he hoped that, in due time, the protocol would be taken forward into the European arena.
Mr Richard Marsh (a former special advisor to Mrs Virginia Bottomley) said that the pressures on the National Health Service this winter had been significant because they had prompted a political intervention. The Prime Minister (Mr Tony Blair) had promised to raise the level of spending on health in the UK to the European average, in terms of gross domestic product, over the next five years. By Mr Marsh's calculations, this was equivalent to a cumulative investment of £60bn over five years in comparison to the promised investment of £21bn over three years since the general election.
He said that while Labour remained committed to the founding ethos of the NHS, ie, a free service, so as to differentiate itself from the Conservatives, it would be interesting to see if this remained the case after the next election, which was widely expected to be in May, 2001. He suggested that Labour might take a more fundamental look at health provision and funding after the election. The Secretary of State for Health (Mr Alan Milburn) had recently established an NHS policy unit, which Mr Marsh described as "Mr Milburn's personal think tank, staffed by a number of thinkers of the centre left, with thoughts amenable to the Government". He said that the unit was an "interesting and laudable" idea.