Patients and industry fret over drug supplies, if no Brexit deal

[November 14, 2018]  By Ben Hirschler

LONDON (Reuters) - Consumers and the pharmaceuticals industry alike are anxious about medicine supplies, if there is no deal on Britain's departure from the European Union.

While the EU and Britain have agreed a draft text of a Brexit withdrawal agreement, it remains unclear if Prime Minister Theresa May can get it approved by parliament.

The highly regulated drugs sector is vulnerable to a no-deal Brexit due to uncertainty over how supply chains and regulatory oversight will function, and the UK government has told companies to build an additional six weeks of drug stockpiles.

But despite the government's instructions, issued in August, 70 percent of consumers still believe that leaving the EU without a deal will have an adverse impact on medicine supplies, according to results of a KPMG survey published on Wednesday.

The finding comes as pharmaceutical industry leaders are grappling with details of how to secure drug supplies in the event of a disorderly exit on March 29, 2019 -- both in Britain and continental Europe.

More than 2,600 drugs have some stage of manufacture in Britain and 45 million patient packs are supplied from the UK to other European countries each month, while another 37 million flow in the opposite direction, industry figures show.

Large pharmaceuticals companies already have stockpiling programs in place, in some cases building up many months of extra supply. Leading insulin maker Novo Nordisk, for example, will hold a 16-week stockpile from January, up from the usual seven weeks.

But the picture is less clear for smaller firms, some of which may struggle to finance extra stocks. It is also difficult to build big additional stockpiles of certain specialist drugs with short shelf lives.

The Association of the British Pharmaceutical Industry has already warned that some supply problems are inevitable in the event of Britain crashing out of the EU without a deal -- and the industry is continuing talks with government officials about contingency plans.

One specific concern voiced by two senior industry executives speaking to Reuters is the risk of a sharp drop in sterling, which would increase the financial incentive to export drugs from Britain via so-called parallel trade.

During its financial crisis, Greece also faced a problem with drugs being sucked out of the country through parallel trade, leading the government in Athens to temporarily ban the export of certain medicines.

(Reporting by Ben Hirschler; Editing by Richard Balmforth)

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