Stakeholders from the Belgian parallel trade industry outline how their activities are helping to solve medicine shortages in Europe and ensure patients have access to the medicines they need. They also tackle some of the criticisms often levelled at parallel distributors and foreground the industry’s vital importance for Belgian, and European, health.
The EU parallel import market was worth EUR 5.5 billion in 2018, representing 2.9 percent of the total European market. Moreover, a recent Affordable Medicines Europe study showed that the total amount of annual savings from parallel imports in Germany, Sweden, Denmark and Poland totalled EUR 3.2 billion.
However, this industry segment is still much maligned and misunderstood in many quarters; with parallel trade accused of negatively impacting the R&D-based pharmaceutical industry and causing medicine shortages in exporting nations.
Speaking recently to PharmaBoardroom, Filip Van de Vliet & Gérard Lefèbvre of Belgian parallel importer Alter Pharma Group attempted to address what they see as misconceptions of their industry. “It is a fact that nowadays, there are a substantial number of drugs unavailable in Belgium, but readily available in other European countries. Through parallel imports, we are able to safely repackage and make these medicines available to Belgian patients,” they note. “This also adds convenience to pharmacists who are less frequently required to identify and source an alternative to an unavailable product, which they often don’t manage to find. Thanks to parallel import, we enable the pharmacists to focus on their key function, advising patients, and patients can continue the treatment they are familiar with.”
Thanks to parallel import, we enable the pharmacists to focus on their key function, advising patients, and patients can continue the treatment they are familiar with
Rebutting criticism from the R&D-based industry, Tanguy Schmitz, president of the Belgian Association of Parallel Importers & Exporters (BAPIE), asserts that “There is no evidence that parallel trade has a negative impact on R&D in Europe. The costs of all parallel imported products are paid to the manufacturer at the price requested in the source market pricing principles, allowing for the recouping of R&D costs, hence every market pays for R&D.”
He adds, “Parallel trade represents only a very small part of the total European pharmaceutical market, accounting for only around three percent of total sales. Whilst innovation in the pharmaceutical industry is vital for the development of new medicines, R&D represents only around 15 percent of the budget of most pharmaceutical manufacturers. Manufacturers have higher expenditure in other areas, such as sales and marketing, where they spend almost twice as much as they spend on R&D. Finally, their margins after R&D, marketing and taxes are still often above 50 percent!”
Moreover, these parallel import industry stakeholders are keen to highlight how they contribute to alleviating medicine shortages. “Over a recent period of eight months where the Belgian market was confronted with shortages, as it still is today, we were able to import around 814,000 months of missing treatment. That equals more than 100,000 patients who every month received their monthly dose of medicine, which they would otherwise had lacked. Hence, by our parallel import activities, we live our credo: making affordable medicines available,” note Van de Vliet & Lefèbvre.
Schmitz expands, “The Belgian wholesalers, importers or exporters respect their obligation of public service by not exporting vital medicines in shortage at home. On the contrary, Belgian parallel importers buy medicines in Europe when they are declared by our Agency (AFMPS) to be in shortage locally. From December 18 to July 19, the “parallel” industry imported 814,000 monthly treatments that were in shortage in Belgium. The shortage crisis in Belgium would be much more serious without this constant and silent contribution of parallel importers.”
He continues, “Thanks to parallel importers, 814,000 patients (100,000 per month) were able to be supplied in accordance to their doctor’s prescriptions. Adherence to treatments could be maintained towards the prescribed medication; reinforcing treatment compliance. The industry should be delighted! For the 4,800 Belgian pharmacists, 814,000 difficult and lengthy searches abroad were avoided. It is in crisis time, when the Belgian pharmaceutical industry is out of stock, that one notices most the beneficial effect of parallel importation: we offer a ‘second chance’ to provide the missing product!”
Against the backdrop of the ongoing COVID-19 pandemic, the importance of the parallel trade industry has been put in sharp relief. “A recent success story and a perfect example of our value creation for the industry but also for society, in general, is the Paracetamol IV initiative we took during the COVID-19 crisis,” state Van de Vliet & Lefèbvre.
No country is self-sufficient in all sectors; every country needs the contribution of its neighbours to “fill the gaps”
“We have leveraged both aspects of our business to fill the gap. Through our parallel import supply chain, we were able to bring a large volume of our generic paracetamol IV (intravenous use), destined for a foreign market, into Belgium with assistance from the health authorities. As one of the products used in the fight against COVID-19, hospitals were facing a shortage. Thanks to our operational excellence in our supply chain, conceived to quickly move products across the EU under strict compliance standards, we were able to bring the product at very short notice. Within one week, we made 36,000 vials of paracetamol IV available for Belgian hospital use. This was delivered for free as part of our contribution to society.”
However, as BAPIE’s Schmitz warns, the crisis and extended cross-border trade restrictions could pose an existential threat to the parallel trade industry. “If every country closes its borders, this will cause a problem for the parallel distribution industry. However, this is not only a problem for our industry, but for Europe as a whole! Some countries will be in deficit for some medications but in excess for others. No country is self-sufficient in all sectors; every country needs the contribution of its neighbours to “fill the gaps”. If there are no trade flows between EU member states, there will be shortages (as well as surpluses) everywhere,” he surmises.
“Regarding exports, several countries have put disproportionate restrictions in place after COVID-19 that limit or prohibit the trade of medicines. While controlling the exports of medicines in times of shortage are justified, the criteria for these medicines to be banned from trade should be clear, proportionate and consistent. Export restrictions should respond to actual shortages, when there is no generic or alternative treatment available, and be removed once the problem is solved.”
Schmitz concludes, “If the restrictions to parallel trade were always justified, limited in time and scope, and properly implemented, no countries would experience the negative effects of exports, while all countries could experience the benefits of imports. This is the healthy parallel trade ecosystem we are advocating for.”
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