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Sigma conference: 'Sideways movement of stock' causes shortages, says ex-BGMA chief

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Sigma conference: 'Sideways movement of stock' causes shortages, says ex-BGMA chief

The former chair of the British Generic Manufacturers' Association Peter Ballard has told the Sigma conference in South Afica today that "the sideways movement of stock is one of the biggest, most damaging causes" of medicines shortages in the UK.

Speaking in a personal capacity about the supply challenges community pharmacies continue to face as they try to source medicines for their patients, Ballard told the conference at the Palace of the Lost City Hotel (pictured) that naming and shaming those responsible "might work" but he was unable to offer any names.

"My personal view, not that of the BGMA, is it is the sideways movement of stock that is one of the biggest, most damaging causes of shortages. I know you lot don't do it. Speak to the people who do and tell them (to stop it)," he said.

Ballard added: "Changes in wholesale regulations may make a difference, and (with) manufacturers, to prevent large quantities of stock going to places where you don't want to (find) large quantities."

He suggested another reason shortages were occurring was because the Medicines and Healthcare products Regulatory Agency "has been desperately slow in approving product licenses."

"There are many, many products where, were there to be the licenses, that would've increased competition, brought down prices and increased supply. But there's a huge backlog. It's been building up shockingly," Ballard said.

The Healthcare Distribution Association executive director Martin Sawer, who addressed the conference via video link from the UK, said there "isn't a clear answer" as to who was behind the "sideways movement of stock." But he insisted HDA members were not guilty.

"There are 1,900 wholesale dealer's licenses in the UK. If stock moves, the message to a patient from a pharmacy is medicines have to have two businesses who are wholesale licenses. Manfacturers have to have those and hospitals need them as well. There are different reasons for having wholesale licenses," he said.

"But our members at the HDA have about 45 licenses between them, so that leaves quite a lot of other licenses which, I would say, over half are probably owned by pharmacy businesses but pharmacies were encouraged 10 years ago to get these wholesale licenses because of EU regulations when sharing stock between themselves when there was a shortage."

Sawer said the MHRA was issuing licenses but failing to inspect all license holders because it does not have the resources to do so. However, he was adamant that it inspects all HDA members "greatly because that will cover 92 per cent of the market and that's a good tick box exercise."

"But the other (eight) per cent could be, in fact I think it is, thousands of license holders. Part of the requirement of WDA holders is they must maintain a continuous supply of medicines for patients, so if a patient needs a medicine, you have to try and supply them," Sawer added.

"And I don't believe everybody with a wholesale license actually has that objective. And when we are selling to businesses who will have a supply business, both the pharmacy license and the wholesale license, we don't always know exactly where that medicine ends up. So we have to track and monitor those products more closely, which could result in a shortage of its own.

"So, we would like more transparency in the supply chain to show what those businesses are actually using those licenses for. In France, there's different levels of wholesale licenses. There's only 35 full service licenses in the whole of France. There's 1,700 in the UK which cover every type of business."

Transparency around wholesale dealer's licenses needed

Calling for greater transparency when it came to licenses, Sawer said: "Classifications, categories, transparency, publishing it on a fully accessible website in public would help and we'll know who's selling and what they use those medicines for."

Sawer also said pharmacy wholesalers are struggling with increasing costs which was forcing them to look at their bottom lines as they try to maintain their service levels.

"Running a broad-based business on two per cent net margins in the face of three years of rising and uncertain costs relating to Brexit, Covid, Ukraine, etc, has meant that energy, fuel and employment costs have risen and has been very unstable and had to be addressed by every wholesale distributor," he said.

"The recruitment and retention of quality staff has become a critically competitive element over the last few years. So, consolidation, there are currently now only six HDA broad-based full service companies for the whole of the UK. Before Covid, there was eight."

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