UK’s parallel trade in pharmaceuticals could be eliminated by hard Brexit

Solicitor Julian Maitland-Walker of the British Association of European Pharmaceutical Distributors’ (BAEPD) legal team, thinks a hard Brexit would wipe out the UK’s parallel pharmaceutical distribution market. Speaking at a seminar held by the Pharmaceutical Industry Network Group he said “a Brexit resulting in the elimination of free movement of goods and development of regulatory divergence would result in increased medicines prices, reduced access to some specialist drugs and greater risk of supply chain shortages. It would also see the loss of around 3,000 jobs”.
Pete Gough, executive director at NSF Healthcare Limited, warned at the same seminar that “considerable supply chain disruption” needs to be planned for. He said pharmaceutical companies would like to continue future trading as if the UK had never left the EU, but he believes that this scenario is “unlikely” as the EU has said sector-specific deals are not an option.
Mr Maitland-Walker said “Parallel distribution is effectively a function of the single market. The size of the EU market in pharmaceutical distribution is around €5bn, and the UK accounts for 22.7% of it. The sector has an annual import value of around £1bn, while the annual export figure is around £600m. EU membership has a profound effect on pharmaceutical intellectual property rights. Currently, trademarked medicines manufactured in one EU country can be sold anywhere within the EEA without infringing the manufacturer’s IP, the principle of ‘exhaustion of rights’. Post-Brexit, exhaustion of rights will cease to apply to the UK, making import and export a costly business and in a worst-case scenario could effectively kill parallel distribution”.