Covid-19: UK restricts parallel export of nearly 200 drugs, threatening its biopharma industry

The UK Government has banned 196 drugs from parallel export in anticipation of shortages caused by the Covid-19 pandemic. However, an industry group has criticised “protectionist measures” that “only undermine the supply chain.”

The UK’s list of drugs banned from parallel export has grown dramatically in the past two months along with the severity of the pandemic in the UK. As of early May, the list comprises 196 drugs. The GlobalData Covid-19 dashboard Country Comparison shows the UK is on a path to overtake Spain for the highest number of cumulative confirmed Covid-19 infections.

The UK added 89 drugs to the parallel export ban list in April alone, with the most recent update on 23 April. As early as March, the list included several drugs being used off-label in Covic-19 clinical trials, including hydroxychloroquine (“UK Adds Covid-19 Drugs to Parallel Export Ban, Citing Threat of Domestic Shortage,” March B/POR.)

The massive increase since March is mostly due to the addition of generic medications that are not in trials to cure Covid-19 but are frequently used to manage Covid-19 symptoms in hospitalised patients, including such basic drugs as salts for intravenous fluid, pain and fever relievers, and anaesthetics. The list also includes many forms of insulin as the government is concerned that the pandemic will lead to a shortage.

However, ABPI Chief Executive Dr Richard Torbett spoke out against pharmaceutical protectionism on 23 April, stating: “With around 12,000 medicines used by the NHS [National Health Service], it would be impossible for the UK to be in the position to manufacture all of the medicines it needs. No country operates in this way for good reason.

“Robust global supply chains are fundamental for ensuring the NHS continues to get the medicines it needs, and we need to make sure this continues. Coronavirus has shown us that they cope incredibly well in the face of a crisis, but we must be vigilant.”

Complex inhalants banned from export

Of the UK’s 196 parallel export-restricted drugs, there are 22 innovator drugs that retain marketing exclusivity, meaning they do not yet have a generic or biosimilar equivalent on the market. The GlobalData Drugs by Manufacturer database shows five of these innovator drugs are manufactured in the UK by dedicated capacity CMOs or on a contract basis by pharma companies with excess capacity. Four of these five drugs are inhalants. The complexity of inhalants’ dose manufacturing and packaging makes them a valuable source of contracts for CMOs.

These drugs are manufactured by GlaxoSmithKline Plc (Middlesex, UK) at two UK locations: Durham and Hertfordshire; Napp Pharmaceuticals Ltd (Cambridge, UK) in Cambridge; PCI Pharma Services (Philadelphia, PA, US) in Tredegar, Wales; and Recipharm (Stockholm, Sweden) in Cheshire. PCI and Recipharm are dedicated CMOs. Napp and GSK are excess capacity contract manufacturers, meaning that they produce pharmaceuticals both for themselves and for clients.

ABPI’s Torbett added, “While the UK must continue to be a voice for global co-operation and the fair distribution of medicines, it’s also vital for the UK life sciences and the economy that we continue to maintain and grow our medicines and health technology manufacturing capability here.” Many groups have raised concerns about the UK’s role as a pharmaceutical industry leader post-Brexit.

“Protectionist measures only undermine the supply chain resilience that has been so vital during this pandemic,” Torbett continued. This is illustrated by the number of drugs on the parallel export list that is produced abroad. While the UK suffers through the worst of the pandemic, the pandemic has already subsided in China and manufacturing is being restored.

According to the recent report by the GlobalData epidemiology team, Covid-19 Cases Might have Reached the Peak in the UK, But Decline Is Expected to Take a Long Time, GlobalData estimates that the UK reached the peak of its transmission curve in the second week of April and so far has remained stagnant in its recovery. This model predicts that the UK will not be able to return to normal until the second week of July.

What is parallel export?

Parallel exporting is when wholesalers buy medicines already placed on the market in the UK to sell them in another country in the European Economic Area (EEA). The restrictions would prevent wholesalers buying drugs cheaply in the UK and selling them at inflated prices abroad. Parallel exporting and hoarding of medicines can create or worsen medicine shortages.

UK wholesalers and drug companies will be allowed to export medicines restricted for parallel export if they were originally manufactured with the intention to export to foreign markets.

Additionally, wholesalers can continue to stockpile drugs if it is part of arrangements agreed upon with marketing authorisation holders, and this will not be considered hoarding by the government. This includes companies building up Brexit stockpiles at the request of the UK Department of Health and Social Care (DHSC).

If wholesalers break the restrictions, they risk regulatory action by the Medicines and Healthcare products Regulatory Authority (MHRA). Wholesalers’ licenses could be suspended, and continued breaches could be prosecuted as a criminal offence.

For more insight and data, visit GlobalData's Pharmaceuticals Intelligence Centre.