Pharma Stockout Watch Under Nationalized Healthcare

The British system of medical care is either the worst or best system in the world depending on whom you speak to. I know some people (including one neurosurgeon) who believe that under its care, his wife would have died of a treatable form of cancer because of the way the system rations, delays and approves treatments. I know of others who think the system is tremendous, especially because of its ease of use, reduced paperwork and universal coverage. Given this, the verdict on the quality of care in the UK is clearly out. But one thing is not. And that's the system's supply chain systems are being blamed for UK medicine shortages.

According to the above-linked story, "Industry supply chain controls in the UK have overwhelmingly made medicines more difficult to source and have put patients at risk ... 78% of pharmacists surveyed said it has been harder to get hold of products from manufacturers running wholesaler distribution models." Specifically, "nearly a quarter of chemists [pharmacists] said between 20 and 50 drugs were currently out of stock at their wholesalers, with 14% saying the figure was more than 50". Moreover, "nearly a third of respondents said patients had suffered because of trouble sourcing a drug".

What and who is at fault for the shortages? Perhaps the nationalized system of medicine itself. Pharma Focus notes that because "UK prices are low compared to other European countries, patients are being put at risk because medicines intended for UK patients are being diverted for export". In other words, the UK might be becoming a prescription victim of its own price controls and programs. Is this a lesson for the US as we tackle healthcare reform? Absolutely. Under a free -- or relatively free -- market all players in the supply chain have maximum incentive to meet local demand. But in a world market where prices are materially lower in one region than another -- or other reverse incentives are in play -- the situation can be very different.

Jason Busch

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