Stocks of drugs dwindle as chemists sell them abroad for higher profits

May 3, 2009

Stocks of drugs dwindle as chemists sell them abroad for higher profits

Tom Bawden

Stocks of hundreds of medicines are running low as British pharmacies export UK supplies to profit from the weakness of the pound.

Evidence has emerged that pharmacists are over-ordering drugs, a practice known as “skimming”, with a view to selling the stock overseas and profiting from higher prices in foreign currencies. The Times has learnt that drug wholesalers have restricted the supply of 370 medicines to pharmacies believed to be engaged in skimming.

The wholesalers fear that the exports, which have led to temporary shortages, could potentially keep some patients from receiving the medicines they need in time and result in death.

Skimming, which is not illegal, has grown in recent months as the fall in the value of the pound has made it profitable to buy drugs in sterling and sell them for euros. Furthermore, on January 1 the Government's Pharmaceutical Price Regulation Scheme came into force, imposing a 5 per cent price cut on prescription medicines bought by the NHS, further increasing the profit to be made from drug arbitrage. About 10 per cent of Britain's 12,500 pharmaceuticals are involved in “parallel exporting”,according to IMS Health. That has left those 370 drugs — all still patented and prescription-only because they are more in-demand and expensive — in danger of running out.

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