By Maggie Fick and Bhanvi Satija
LONDON, March 20 (Reuters) – Britain has so far avoided medicine shortages linked to the war in the Middle East, but soaring freight costs are squeezing generic drugmakers’ margins and could soon trigger price rises, supply shortages or both, trade group Medicines UK warned.
Chief Executive Mark Samuels said Britain was “one step away” from medicine shortages if instability persisted, with stockpiles providing only a temporary buffer.
While supplies are still flowing, he said makers of cheap generics, which account for most NHS medicines by volume, were already under pressure from higher transport costs and shipping disruption. If freight costs persist, manufacturers may no longer be able to absorb them.
“If the conflict continues for the longer term, then I think manufacturers will cease being able to absorb the costs, and then we’ll either have some price rises for the NHS or we’ll have a failure to supply. Probably a mixture of both,” Samuels told Reuters in an interview late on Thursday.
He said off-patent medicines were especially exposed because, unlike patented drugs, their margins leave little scope to absorb higher freight costs. With about 55% of generic medicines in Britain priced at less than 1 British pound ($1.34) for a month’s supply, transport makes up a significant part of the cost, increasing the risk that some products could become loss-making and threaten supply.
Reuters reported on Monday that the conflict was already disrupting flows of critical medicines into the Gulf, imperilling supply routes for cancer drugs and other temperature-sensitive treatments as companies rerouted flights and sought overland alternatives.
Biosimilar medicines were more exposed than standard oral drugs, he said, because they require longer lead times and more complex manufacturing, Samuels said.
Medicines UK represents generic and biosimilar medicines manufacturers and suppliers whose products account for 85% of NHS prescriptions.
($1 = 0.7449 pounds)
(Reporting by Maggie Fick; Editing by Sharon Singleton)
