Market Report Source

Overview

The UK is the top destination for parallel imported drugs. Approximately 20% of all National Health Service (NHS) dispensed drugs are parallel imports and the market is estimated to be valued at over £1 billion (US$1.8 billion). Although the net benefits to the UK economy are controversial, experts have proposed that consumers save around £300 million or more (US$540+ million) per year due to bulk purchase of lower-priced parallel traded drugs. Furthermore, researchers have calculated that parallel importers profit over £700 million (US$1.2 billion) per annum in Europe from parallel drug distribution, creating a boom market.

Importing drugs into the UK is highly attractive for several reasons: the relatively high prices of domestically supplied drugs compared with European counterparts makes parallel trade viable and profitable enterprise; government incentives encourage pharmacists to source and dispense parallel-traded drugs through the clawback scheme; and the legal and regulatory framework to import and redistribute drugs within the EU is centralized in the UK.

Although historical Court rulings tended to favour parallel importers, recent court cases have been shown to favour the pharmaceutical industry particularly in relation to allegations of supply restriction. Despite this increasingly balanced litigious outcome, the UK parallel import market has evolved into a highly lucrative enterprise. Spectra’s analysis of the UK parallel trade market reveals that between 2000 and 2006 over 12,200 parallel import licenses were granted. Prior to 2000, figures show that there were just 2,726 valid parallel import licenses approved in 1998 representing an 18% increase over the previous year at that time; imports have now increased approximately 350% between 2000 and 2006. Assuming Parallel Import Licences (PILs) are renewed after each 5-year period, the UK may now account for over 17,200 valid PILs affecting over 71 research-based multinationals.

Parallel importers are a diverse group of traders who range from small-to-medium sized firms to larger multinational corporations. They operate in an extensive and complex network to cater for the high demand for drugs but with tightening supply. For this reason parallel trade is increasingly competitive for the parallel importers who are constantly fighting for market share. There are currently more than 70 parallel importers in the UK who continue to source new opportunities in the parallel drug distribution market. In this report briefing, Pharmaceutical Parallel Trade in the United Kingdom, 2000-2006: Market Insights and Trends in a Primary Import Destination, the reader will be introduced to the scope of parallel trade in the UK based on therapy area analysis of import licences granted through a 7-year period; and assessments of parallel import activities that impact on the domestic market. The report provides an up-to-date account of parallel trade in the UK and highlights the key factors driving growth, the major barriers to the industry, the key stakeholders, and also reveals the main strategies employed by pharmaceutical companies to combat the trade. The report benefits the reader by facilitating the understanding of the core mechanisms which underscore parallel drug distribution and shows why parallel importation is a controversial market sector of the global pharmaceutical industry. Other chapters provide detailed coverage of 19 therapy channels revealing which actives are highly attractive to parallel importers. Finally, the report details the market issues related to parallel importation in the UK and attempts to quantify the market value for imported drugs based on importer revenues. The briefing also reveals the top 30 multinational pharmaceutical companies portfolios targeted for parallel importation.

Table of Contents

Contents
List of Tables
List of Figures
Executive Summary
Objectives of the Report
Research Methodology
Chapter 1. Introduction to Parallel Trade
Introduction to Parallel Trade
Parallel Trade Outside the European Economic Area
Parallel Trade in Europe
Parallel Trade and European Community Enlargement
Key Stakeholders
Parallel Trade: Advantages and Disadvantages
Salient Aspects of Success in Parallel Trade
Positive Price Differential
Selective Patient Populations
Selective Markets?
Format and Formulation
Pack Management
Factors Driving Parallel Trade in the European Union
Pricing Mechanisms in Europe
Pricing in the United Kingdom
Obstacles to Parallel Trade in Europe
Product Safety Issues
Anti-Parallel Trade Strategies in the European Union
Growth of Parallel Trade in Europe
Parallel Trade and Health Economics
Drivers of Growth in European Parallel Trade
Regulation of Parallel Trade in the United Kingdom
Parallel Trade Organizations and the United Kingdom
British Association of European Pharmaceutical Distributors (BAEPD)
European Association of Euro-Pharmaceutical Companies (EAEPC)
Chapter 2. Parallel Import Analysis by Therapy Area: United Kingdom
Analysis of Authorized Parallel Import Licences, 1995-2006
Parallel Import Approvals by Therapy Area
Analysis of Parallel Import Approvals by Drug Class and Active Ingredient
Allergy
Cardiovascular
Central Nervous System
Dermatology
Endocrine-Metabolic
Gastrointestinal
Genito-Urinary
Immune System
Infections
Musculoskeletal
Nutrition
Obstetrics and Gynaecology
Oncology
Ophthalmology
Pain
Respiratory
Sexual Disorders
Toxicology
Miscellaneous
Chapter 3. The Market for Parallel Importation in the United Kingdom
Pharmacists and Parallel Imports
Growth of Parallel Imports in the United Kingdom
The Euro and Currency Exchange Rates
Parallel Importers: Assessing Market Value
Pharmaceutical Companies Affected by Parallel Imports
Portfolio Analysis
The Future of Parallel Trade in the United Kingdom
List of Tables
Table 1.1 Countries of the European Economic Area (EEA) and Accession Countries
Table 1.2 Main Parallel Import and Export Countries
Table 1.3 Parallel Trade: Main Advantages and Disadvantages
Table 1.4 Anti-Parallel Trade Strategies
Table 1.5 Members of the British Association of European Pharmaceutical Distributors, 2006
Table 1.6 Members of the European Association of Euro-Pharmaceutical Companies, 2006
Table 2.1 Parallel Import Licences (PILs) Authorized in the United Kingdom, 1995-2006
Table 2.2 Authorized Importable Drug Formats in the United Kingdom by Therapy Area,
2000-2006
Table 2.3 Cardiovascular Drugs Approved for Parallel Importation in the United Kingdom,
2000-2006
Table 2.4 Central Nervous System Drugs Approved for Parallel Importation in the United
Kingdom, 2000-2006
Table 2.5 Dermatology Drug Formats Approved for Parallel Importation in the United
Kingdom, 2000-2006
Table 2.6 Anti-Infective Drug Formats Approved for Parallel Importation in the United
Kingdom, 2000-2006
Table 2.7 Musculoskeletal Drug Formats Approved for Parallel Importation in the United
Kingdom, 2000-2006
Table 2.8 Obstetric-Gynaecologic Drug Formats Approved for Parallel Importation in the
United Kingdom, 2000-2006
Table 2.9 Oncology Drug Formats Approved for Parallel Importation in the United Kingdom,
2000-2006
Table 2.10 Ophthalmic Drug Formats Approved for Parallel Importation in the United
Kingdom, 2000-2006
Table 2.11 Pain Based Drug Formats Approved for Parallel Importation in the United
Kingdom, 2000-2006
Table 2.12 Respiratory Drug Formats Approved for Parallel Importation in the United
Kingdom, 2000-2006
Table 3.1 Parallel Importers in the United Kingdom, 2000-2006
Table 3.2 Top 50 Parallel Traders in the United Kingdom Based on Import Licence
Approvals, 2000-2006
Table 3.3 Annual Revenues of Parallel Importers in the United Kingdom (GB£)
Table 3.4 Pharmaceutical Companies Affected by Parallel Importation in the
United Kingdom, 2000-2006
List of Figures
Figure 1.1 Factors Involved in the Success of Parallel Trade in Pharmaceuticals
Figure 1.2 Main Obstacles and Barriers in Pharmaceutical Parallel Trade
Figure 2.1 Trends of Parallel Import Licence (PIL) Approvals in the United Kingdom,
1995-2005
Figure 2.2 Ranking of Imported Actives in the United Kingdom by Therapy Area, 2000-2006
Figure 2.3 Allergy Drugs Approved for Parallel Importation in the United Kingdom,
2000-2006
Figure 2.4 Cardiovascular Drugs Approved for Importation by Licence Volume, 2000-2006
Figure 2.5 Percentage Share of Cardiovascular Based Import Licences by Drug Class,
2000-2006
Figure 2.6 Central Nervous System Drugs Approved for Importation by Licence Volume,
2000-2006
Figure 2.7 Percentage Share of Central Nervous System Based Import Licences by Drug
Class, 2000-2006
Figure 2.8 Dermatology Drugs Approved for Importation by Licence Volume, 2000-2006
Figure 2.9 Percentage Share of Dermatology Based Import Licences by Drug Class,
2000-2006
Figure 2.10 Endocrine-Metabolic Drugs Approved for Parallel Importation in the United
Kingdom, 2000-2006
Figure 2.11 Endocrine-Metabolic Drugs Approved for Importation by Licence Volume,
2000-2006
Figure 2.11 Gastrointestinal Drugs Approved for Parallel Importation in the United
Kingdom, 2000-2006
Figure 2.12 Gastrointestinal Drugs Approved for Importation by Licence Volume,
2000-2006
Figure 2.13 Genito-Urinary Drugs Approved for Parallel Importation in the United Kingdom,
2000-2006
Figure 2.14 Genito-Urinary Drugs Approved for Importation by Licence Volume, 2000-2006
Figure 2.15 Immune System Drugs Approved for Parallel Importation in the United Kingdom,
2000-2006
Figure 2.16 Immune System Drugs Approved for Importation by Licence Volume, 2000-2006
Figure 2.17 Anti-Infectives Approved for Importation by Licence Volume, 2000-2006
Figure 2.18 Percentage Share of Anti-Infective Import Licences by Drug Class, 2000-2006
Figure 2.19 Musculoskeletal Drugs Approved for Importation by Licence Volume, 2000-2006
Figure 2.20 Percentage Share of Musculoskeletal Import Licences by Drug Class, 2000-2006
Figure 2.21 Obstetric-Gynaecologic Drugs Approved for Importation by Licence Volume,
2000-2006
Figure 2.22 Percentage Share of Obstetric-Gynaecologic Import Licences by Drug Class,
2000-2006
Figure 2.23 Oncology Drugs Approved for Importation by Licence Volume, 2000-2006
Figure 2.24 Percentage Share of Oncology Import Licences by Drug Class, 2000-2006
Figure 2.25 Ophthalmic Drugs Approved for Importation by Licence Volume, 2000-2006
Figure 2.26 Percentage Share of Ophthalmic Import Licences by Drug Class, 2000-2006
Figure 2.27 Pain Drugs Approved for Importation by Licence Volume, 2000-2006
Figure 2.28 Percentage Share of Pain Based Import Licences by Drug Class, 2000-2006
Figure 2.29 Respiratory Drugs Approved for Importation by Licence Volume, 2000-2006
Figure 2.30 Percentage Share of Respiratory Based Import Licences by Drug Class,
2000-2006
Figure 3.1 Multinational Pharmaceutical Companies Most Targeted by Parallel Importers,
2000-2006
Figure 3.1 Multinational Pharmaceutical Companies Mostly Targeted by Parallel Importers, 2000-2006