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Brexit stockpiling may cause generics shortages and price 'crashes'

The government’s plans to stockpile medicines ahead of Brexit could cause generics shortages and price "crashes" if not managed properly, a wholesaler has warned.

Health secretary Matt Hancock announced last week that he had “asked the Department of Health and Social Care (DH) for options for stockpiling” medical supplies to prepare for “the unlikely scenario” of the UK and the European Union failing to secure a deal ahead of Brexit next March.

While it is “very difficult to predict” what will happen based on previous cases of the DH stockpiling generics, there will be “some level of shortages and some price rises”, Sigma Pharmaceuticals director Rajiv Shah told C+D.

Price "crashes"

If the UK requests three months’ worth of stock from overseas and does not “give [manufacturers] ample notice, you will get essential shortages occurring”, he explained.

Then when the stockpile rotation finishes, and the DH decides it no longer needs to hold onto the medicines, excess stock will “flood” the market. This will send prices “crashing down”, Mr Shah warned.

“You obviously can't stockpile every single drug that [the DH] wants to because there are so many factors affecting...the supply chain,” he added.“It looks like it's not going to be smooth sailing [for the sector] if [the DH] decides to stockpile.”

Nevertheless, if managed properly, stockpiling should “safeguard the product for the patient”, while price changes “tend to level themselves out” so the impact on the sector should only be short-term, Mr Shah said.

The DH has not yet asked Sigma to prepare to stockpile for a no-deal Brexit, he said.

Preparing for “every possible scenario”

The Association of the British Pharmaceutical Industry (ABPI) told C+D that manufacturers are “being asked to plan for every possible scenario”.

“By the time the UK leaves the EU, companies will have spent hundreds of millions on complex contingency plans covering all possible scenarios,” the ABPI said.

The trade body would like the UK government and EU Commission to agree “to recognise and use medicines manufactured” in both areas, it stressed.

“This will go a long way to ensuring supply across Europe and will allow industry to focus on a smaller number of medicines which have the most complex supply chains.”

Have you had any experience of stockpiling medicines?

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