Report Overview

The UK is the top destination for parallel imported drugs. Approximately 20% of all National Health Service (NHS) dispensed drugs are parallel imports and the market is estimated to be valued at over £1 billion (US$1.8 billion). Although the net benefits to the UK economy are controversial, experts have proposed that consumers save around £300 million or more (US$540+ million) per year due to bulk purchase of lower-priced parallel traded drugs. Furthermore, researchers have calculated that parallel importers profit over £700 million (US$1.2 billion) per annum in Europe from parallel drug distribution, creating a boom market.

Importing drugs into the UK is highly attractive for several reasons: the relatively high prices of domestically supplied drugs compared with European counterparts makes parallel trade viable and profitable enterprise; government incentives encourage pharmacists to source and dispense parallel-traded drugs through the clawback scheme; and the legal and regulatory framework to import and redistribute drugs within the EU is centralized in the UK.

Although historical Court rulings tended to favour parallel importers, recent court cases have been shown to favour the pharmaceutical industry particularly in relation to allegations of supply restriction. Despite this increasingly balanced litigious outcome, the UK parallel import market has evolved into a highly lucrative enterprise. Spectra's analysis of the UK parallel trade market reveals that between 2000 and 2006 over 12,200 parallel import licenses were granted. Prior to 2000, figures show that there were just 2,726 valid parallel import licenses approved in 1998 representing an 18% increase over the previous year at that time; imports have now increased approximately 350% between 2000 and 2006. Assuming Parallel Import Licences (PILs) are renewed after each 5-year period, the UK may now account for over 17,200 valid PILs affecting over 71 research-based multinationals.

Parallel importers are a diverse group of traders who range from small-to-medium sized firms to larger multinational corporations. They operate in an extensive and complex network to cater for the high demand for drugs but with tightening supply. For this reason parallel trade is increasingly competitive for the parallel importers who are constantly fighting for market share. There are currently more than 70 parallel importers in the UK who continue to source new opportunities in the parallel drug distribution market. In this report briefing, Pharmaceutical Parallel Trade in the United Kingdom, 2000-2006: Market Insights and Trends in a Primary Import Destination, the reader will be introduced to the scope of parallel trade in the UK based on therapy area analysis of import licences granted through a 7-year period; and assessments of parallel import activities that impact on the domestic market. The report provides an up-to-date account of parallel trade in the UK and highlights the key factors driving growth, the major barriers to the industry, the key stakeholders, and also reveals the main strategies employed by pharmaceutical companies to combat the trade. The report benefits the reader by facilitating the understanding of the core mechanisms which underscore parallel drug distribution and shows why parallel importation is a controversial market sector of the global pharmaceutical industry. Other chapters provide detailed coverage of 19 therapy channels revealing which actives are highly attractive to parallel importers. Finally, the report details the market issues related to parallel importation in the UK and attempts to quantify the market value for imported drugs based on importer revenues. The briefing also reveals the top 30 multinational pharmaceutical companies portfolios targeted for parallel importation.