The author explains the current situation of parallel drug trade in our country, in light of the latest developments in legal matters, and gives
his opinion on its impact on the economy of the different actors in the pharmaceutical sector, including the National Health System.
The publication of two royal decrees 1, one in the year 2000 and the other last June, closes the encirclement of parallel importers making our Administration a bulwark of the defense of the interests of multinational companies in Europe. This fact, which will hardly reach public opinion due to its technical complexity, is the expression of a policy that greatly harms the interests of pharmacists and the distribution dependent on them, and should be known in detail so that no one can be confused. when these issues are addressed, since so far a cluster of half truths, and even lies, has been transmitted on it. Being a technically complex issue, it is easier to convey assertions about the lack of ethics of parallel trade, which are difficult to refute in a quick and direct way, and it is also easy to resort to the topic that they affect innovation and the state of health of the population, or are the cause of medicine shortages, suggesting that the greed of distributors can cause real health damage. None of this is true, and it is convenient for pharmacists to know the truth, to know who tries to confuse them, for what purposes, and the harms they face if they do not adopt a clear position in defense of their interests and those of the patients, that also comes a part of the damage.
WHAT IS PARALLEL TRADE?
If a medicine is registered in two countries of the European Union, any natural or legal person that has the necessary sanitary permits can take it from one country to another without being opposed by the owner of the brand or patent. The concept is very simple: Europe is a single market as are two autonomous communities in Spain. If someone sold a more expensive medicine in Catalonia than in Galicia, no one can prevent an authorized store from buying it in Galicia to take it to Catalonia and be able to offer it there at a lower price, also obtaining a benefit for its management. This is the essence of parallel trade within the single European market that occurs in many different sectors of the economy and is supported by the Treaty and the European Commission. It’s legal, it’s ethical, it’s legal,2 .
Faced with this reality, the opposition arises – how not – of the owners of branded products, who use all kinds of arguments to prevent it, and that when they no longer have arguments they act, either through actions, which in most of The cases are finally declared illegal by the Luxembourg Court of Justice, or by forcing laws and regulations whose support in the defense of the public interest leaves much to be desired and which, in some cases, are called upon to be repealed.
THE MULTINATIONAL POLICY
The case of Spain is especially illustrative. We are the fifth market of the European Union and the seventh world. Our medications are quite cheap. There is a price limitation and parallel trade, mainly with the United Kingdom, the Netherlands and Germany, provides 1 to 2% of the distribution margin that, if it does not exist, would increase in the purchase price from the pharmacy office (tables I and II). The medicines exported by the distribution – no more than 150 – are sold in the destination countries with a very competitive price over those that are identical in those countries, simply showing that they are sold there with a greater margin for the industry, but that here the subsidiaries of those same laboratories do not stop obtaining significant benefits.
A diverse strategy
The policy of multinationals to prevent exports in our country has followed different paths, ranging from mentalization through opinion leaders, to direct political action towards those responsible for the Administration, through the refusal to serve medications or, what is worse, the accusations to the distribution for the shortage of some of them 3 . Mentalization through opinion leaders has been carried out in some cases through MEPs, senior officials and even presidents of distribution warehouses whose position allowed them to continue exporting while denying it 4. Political action against those responsible for the Administration need not be demonstrated. There is the modification of article 100 of the Drug Law 5, in preparation for the royal decree that appeared last June and the development of the directive that contemplates various aspects of intra-community trade in medicines, by means of a royal decree that regulates importation and, in fact, makes it impossible for anyone to import, as will explain later. And the refusal to serve medicines is a practice that Glaxo tried to implant to those who did not sign a contract for which the distributors promised not to export, since they were sold at a prohibitive price in case of doing so. This Glaxo action has already been declared illegal by the European Commission, although many other processes of other laboratories that assign quotas, such as MS&D, are still pending.
The last action devised with support for the modification of article 100 of the Medicines Law is the royal decree that seeks the absolute traceability of medicines in their commercialization with a single purpose, not declared in their explanatory statement, and that is not export That is, pharmaceutical multinationals have won a magnificent prize for their efforts and if traceability could be implemented – in Italy it has already failed – it would have the double cost of ending distribution efficiency and costing the pharmacy office between 1.5 and 3% of their purchases, apart from directly bankrupt a good number of cooperatives and warehouses. The protagonists of the victory are about 15 multinational pharmaceutical corporations and about 150 drug formats,
In Spain, multinational corporations have achieved everything: that medicines are not imported in parallel and that they are not exported. RD 1785/2000 of October 27 regulates the authorization of importers and does so in a way that is not so flexible that no one has been able to import medicines that are cheaper in some other State 6. RD 725/2003 of June 13 imposes the obligation on the stores to declare sales to each pharmacy, so that if it were not possible to prove that a drug was sold to a pharmacy, the laboratory could impose a free and prohibitive price. for export By hindering the importation of cheaper drugs, patients and public accounts are being prevented from saving and by making exports difficult, the distribution and the pharmacy office are being deprived of a legitimate benefit with repercussions throughout the national economy.
THE POSTURE OF THE DISTRIBUTION
The pharmaceutical distribution, grouped in FEDIFAR, has never been clear and forceful against the obstacles to parallel trade: it has limited itself to resorting, at the legal level, the provisions and maneuvers of the industry, forced by some associates, but has avoided making public demonstrations that could harm the supply. Some of its associates give priority to good relations with multinationals while maintaining export departments that do not declare even in their annual reports. This unclear position is what has allowed the Administration to be convinced to prevent parallel trade with the arguments of multinational corporations.
Now, after the publication of the royal decree that imposes traceability, the voice of FEDIFAR begins to be heard, but it is already late, and reveals a deep division in its bosom, as some associates still do not give their arm to twist, estimating that will get a greater market share at the expense of those who signify in this fight.
The consequence of this position is that, from now on, the stores must keep all the documentation with the information of any transaction that contains a series of data that seriously impair the effectiveness of the distribution process, increase costs and, since then, they will prevent the export, being able to impose a different price on everything that cannot be justified as sold to a pharmacy 7 . In case you are looking to buy bulk medicines, you must get along with the leading pharmaceutical exporters Pakistan.
IMPLICATIONS FOR THE PHARMACEUTICAL
The consequence for the pharmacist is that when the distribution process and the economy of the warehouse or cooperative to which he buys are affected, his acquisition costs will increase between 1.5 and 3%, depending on his volume of purchases and other variables . The blow is very hard for the pharmacy, since it means an effective reduction of the margin, without anyone appearing to have heard, or even with the acquiescence of some leaders who are still unable to distinguish that parallel exports are legitimate and convenient, not only for the economy of the pharmacy office, but also for the national economy and for consumers in other European countries.
HOW HAVE YOU GOT HERE?
If there were to be a synopsis of this defeat, it would be necessary to speak first of all of an idea that has become a powerful negotiating weapon for multinationals: innovation. The agreement signed by Farmaindustria represents between 90 and 99 million euros with which research projects are financed in health centers throughout the country and that undoubtedly also imply important returns for the industry, bonuses or payment of fellows, publications and, in general, beneficial manna for the squalid research investment statistics of our country. Innovation is the golden calf that sacrifices any productive sector that leaves its benefits in Spain, while those who invoke it are responsible for aspiring the social contributions and taxes of employers and workers that appear converted into dividends in remote stock markets. The image of innovation should be reviewed to know its fair limits, since it is feared that when it comes to innovation two concepts are mixed: the one that is done to keep our money by the fastest and most expeditious way known, with patent monopoly support, and the one that could provide some improvement to our economy. The first is an innovation that already has enough reward and should not be protected more than it already is, while the second is the one that can interest us all. You should also thoroughly investigate what is called innovation, it will not be mostly covert promotion that you adopt,
The industry manages an immaterial concept, promises to solve everything through innovation, while health professionals, including ourselves and doctors, only promise good service, something that is taken for granted that we must comply, which is presented with very little value and that, however, is huge. This has led to the situation that doctors have one of the lowest salaries in any developed country and the persecution of the distribution sector and pharmacy office as if they were bed bugs, without considering that our contribution to the national economy and to employment is far superior to that of the industry
Our own action plan has to start by explaining the benefits of the parallel market, benefits that remain in the country and that also benefit millions of European citizens, and the regulatory nature of the prices of these practices. Even the last pharmacist must know the amount of the market contribution parallel to their own well-being and that of their fellow citizens so that no one has the slightest doubt about this issue. Once the meaning of the parallel market is known, the arguments of those who dare to oppose it must be refuted. The second course of action would be to avoid belonging to employers’ associations – whether from industry, distribution or the pharmacy office -, in which decisions must be shared with the enemies of parallel trade. It is of no interest to maintain confusing positions that end up harming us, nor to enter into agreements with the Administrations that have as a counterpart the prohibition of parallel trade. The third way, and only possible at this point, is to initiate lawsuits, both in Spain and in the European Union, since the royal decrees are appealable, something that could not be done with the modification of article 100 of the Law of Medication, because it is a Law.
This strategy, accompanied by reasoned information and criticism of those who support the ban, is a work program for the coming years and should be a great lesson for most members of the pharmaceutical sector. The small laboratories that opted for generics will be swept away by the Third Final Provision of the Cohesion Law and should know that one of the counterparts has been to end parallel trade. The distribution stores that first signed the contract with Glaxo and then agreed to contribute to the Pact, thinking that none of this was going to happen, should reflect and see how little it has served them. And pharmacists still have a great lesson to learn, which is to make mistakes for ourselves, without allowing some of our leaders to continue making mistakes for us. But, above all, we must learn that parallel trade is ethical because it helps lower prices where they are highest, it is lawful because it is promoted by the European Union and is convenient for our economy and for that of our country.