Drugmakers Should Stock 6-Week Supply to Prepare for Brexit

(Bloomberg) -- Drugmakers in the U.K. should raise stockpiles of their products in preparation for shipping and border delays that might occur after a “no-deal” Brexit, the Department of Health and Social Care said.

Pharmaceutical companies should have an additional six-week supply of their medications on top of their normal stock levels, according to a letter from Health Secretary Matt Hancock posted Thursday on the department’s website. The government is also developing plans for ensuring supplies of drugs with short shelf lives, such as radioactive medicines, according to the letter.

Drugmakers AstraZeneca Plc, Novartis AG and Sanofi have all said they’re creating months worth of drug stockpiles or investing in new facilities to release drugs to prepare for the U.K.’s planned March exit from the EU. In June, a person familiar with the matter said that U.S. pharmaceutical giant Merck & Co. was planning for the possibility of a temporary supply blackout and might stockpile as much as six months worth of goods and revise trade routes in preparation.

One industry figure, speaking on condition of anonymity, questioned whether smaller low-margin drug-makers would be willing to bear the costs of stockpiling. The person estimated the government was asking the sector for between 50,000 and 80,000 pallets worth of medicines, all of which would need to be stored in bonded warehouses, with many needing refrigeration. At 30 pallets to a truck, this is more than 2,500 trucks full of drugs.

Warwick Smith, director general of the British Generic Manufacturers Association, said it’s appropriate for the government to take responsibility for organizing the effort. “Warehousing approved for pharmaceutical use is a limited resource, and medicines manufacturers operating independently cannot be expected to ensure that it is shared out and matched to demand,” he said, adding that a Brexit deal was “obviously the only way to ensure that the supply of medicines is not disrupted.”

The department made it clear that it’s considering how to support suppliers in making arrangements for stockpiling, the Association of the British Pharmaceutical Industry said in an email.

The government also asked companies to make special plans for products that are imported to the U.K. from the EU via road haulage and roll-on, roll-off sea, road and rail routes. Supplies should make plans to ship those products by air freight to avoid border delays, the letter said.

“We will consider here too how the department may support suppliers in making arrangements to meet this expectation,” the department said.

Hospitals, doctors and community pharmacies don’t need to stockpile drugs, Hancock said in the letter, and there is no need for doctors to extend their patients’ prescriptions.

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