NHS goes abroad to buy cheap drugs

THE NATIONAL Health Service has started buying drugs from abroad, saving up to 40 per cent on the same drugs supplied by the same drugs companies in Britain.

Plans to make substantial savings were outlined in documents presented to a meeting of senior health executives this week, which would help cut the NHS's pounds 5bn annual drugs bill.

The NHS purchasing arm admitted yesterday that it had been buying drugs on the "parallel import" market. Some NHS trusts, including those covering hospitals in Southampton and West Midlands, have been buying on this grey market for some time.

These moves will embarrass the Government, which has pricing agreements with the drug companies that maintain prices at levels higher than for the same drugs in other European countries.

The new deals are possible because of the growth of parallel import companies which take advantage of lower prices in France, Spain and Italy to export to other countries. The strong pound has made the drugs even cheaper.

The NHS Supplies Trust, which buys drugs for many of the country's hospitals, said yesterday its purchases on the parallel import market, accounted for "a small percentage of our business".

Last Tuesday, the NHS committee that advises on national drug purchase policy, the National Pharmaceutical Supplies Group, met to examine proposals to buy a wide range of drugs on the parallel import market. According to confidential documents obtained by tomorrow night's Money Programme on BBC 2, the NHS could achieve substantial savings. The NHS documents show that riluzole, used in the treatment of motor neurone disease, has a British list price of pounds 286, compared with a Spanish price of pounds 214. A parallel importer can offer the drug at pounds 243.24.

While such purchases have been piecemeal so far, if the NHS began to import this was on a larger basis, the agreement between the Government and the drug companies awould disintegrate.

Glaxo Wellcome said parallel imports were already costing the company "tens of millions a year". Although the company's pre-tax profits last year were pounds 2.6bn, Glaxo said that "had we not had this parallel trade situation, we clearly would have had more resources available to research new medicines.

The drug companies also say the parallel trade can be dangerous to patients, with drugs deteriorating through poor handling, contamination during repackaging and that drugs have been given to patients with Spanish or Italian instructions.

The Government are worried about high charges by the pharmaceutical companies. A Labour Party policy document leaked earlier this month to The Independent showed Ministers are preparing to take on the drugs industry.

But the Government will have to tread carefully. Ministers will be concerned that if these companies feel their profits are being undermined they will relocate abroad their research and development arms, or even their production facilities. Graphics Omitted.