Over-the-counter (OTC) medicines manufacturers have already raised their prices since the UK voted to leave the European Union (EU) in June, said Sigma sales and marketing director Rajiv Shah, who predicted manufacturers of generics and other medicines will follow suit.
Food manufacturer Unilever made headlines this month after it increased the wholesale costs of its products – including Marmite – in the wake of the pound’s steep decline in value.
Mr Shah said the situation for pharmacy “is probably not going to be that different”.
Speaking at the Avicenna conference at the Celtic Manor resort in Wales earlier this month (October 15-16), Mr Shah said Sigma is “quite confident” that the impact of the Brexit vote would lead to worsening drug shortages “over the next year or so”, partly because of the “crazy near-20% decline in the pound against the euro”.
“At Sigma recently, we’ve already had OTC manufacturers come to us and impose price rises [and] we’ve had to absorb that,” he told delegates.
“Looking at the increasing cost of manufacturing outside the UK – and that impact on generic drugs manufacturers and OTC suppliers – when you have raw material prices going up, but you have already tended a price to the UK, sometimes it then becomes unviable to make a product – which is why we get a shortage.”
Impact on imports
While Britain is in the EU and the single market, free movement of goods means drugs can be imported “fairly quickly”, Mr Shah said. But it’s not yet clear if drugs arriving in the UK once it exits the EU would be subject to import levies or quarantines – as currently applies to medicines imported from outside Europe.
This could result in a “lengthier process to bring stock in from the EU”, Mr Shah warned. “If so, this will mean fewer imports of goods, which also contributes to shortages and an increase in prices.”
Sigma estimates that Brexit’s impact on imports could cost independent pharmacies in the UK an average of £2,400 in profit a year (see below). “That’s going to affect a lot of our customers,” Mr Shah told delegates.
However, he added: “Independents are fairly insular, but tend to ride the tough times better than big multinational corporations.”