Several benefits of parallel trade were highlighted in NPA’s response to a government consultation on the UK’s future exhaustion of intellectual property rights regime.
The question of a future exhaustion regime is a significant one as it underpins the rules on parallel trade of goods into the UK, especially after its departure from the EU.
In its written response to the Intellectual Property Office consultation which ended on 31 August, the NPA asked that any model that would be applied in the future continues to deliver the benefits of the current system”.
The consultation response listed a number of factors in support of parallel trade including:
- Parallel traded products have been used to deal with medicines shortages in the UK, ensuring continuity of supply to patients of often life-saving medicines
- Parallel trade has reduced the price the NHS pays for a range of medicines releasing resource to provide additional services elsewhere in the NHS. Whilst community pharmacies procure the medicines for the NHS the saving is passed through to the tax payer via the contracts that pharmacies across the UK have with the NHS, so the tax payer is the ultimate beneficiary of this trade
- Parallel trade can ensure that a patient receives a medicines that has been subject to the full licensing process where no licensed alternative is available
- This issue is particularly important for our members in Northern Ireland where there are considerable concerns about medicines shortages caused by uncertainty in relation to the Northern Ireland protocol
Helga Mangion, Policy Manager at the NPA, said: “On average, each pharmacy dispenses approximately 100,000 prescription items per year. Parallel importing of medicines has supported a safe and efficient medicine supply chain. This has contributed to the cost of medicines and supply to be lower than nearly any other major market in Europe, the United States or Canada.”
She added: “In 2017, it was estimated that the efficient and competitive procurement of medicines by community pharmacies, including parallel imported products, has saved the English taxpayer more than £10bn over the past 10 year period.”
In July the NPA met with Amanda Solloway, Minister for Science, Research and Innovation to discuss the future of parallel trade, alongside ABPI, BGMA and BAEPD and representatives of the music, fashion, publishing and toy manufacturing industries.
During the meeting the NPA was able to confirm some of the existing benefits of parallel trade such as providing savings to the drugs bill and in some cases helping deal with medicine shortages, and raise some of the challenges that would need to be overcome should the UK move to a broader international exhaustion regime. The NPA also highlighted the risks of changing the regime too quickly for the medicines supply chain to make changes and ensure continuity of supply.
Exhaustion of IP rights is the technical term for the rules that underpin parallel trade. Parallel trade is the cross-border movement of goods that have already been placed on the market in a specific geographic territory. If a business moves, sells or relies on goods such as books, car parts or toiletries that have already been first placed on the market in another territory, the consultation is likely to be important to them.
Prior to 2021, parallel goods were able to move freely in both directions between the UK and EEA. Since 1 January 2021, the UK no longer participates in the EU’s regional exhaustion system, and a legal default has come into effect. The consultation considers what the UK’s future exhaustion regime should be, and if there is to be a change, how any potential changes could be implemented.
Taken from the Intellectual Property Office website.