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Overcrowded Unlicensed Medicines Industry: The NHS wins but smaller wholesalers lose

Unlicensed medicines, medicines which are not licensed in the UK, are becoming more popular. The market is growing due to the increasing demand for medicines which are not available on the NHS. These medicines may be too expensive or not in enough demand to justify bringing them in; the medicines may also not have the correct UK licensing to allow them to be sold in the country. There is also the potential problem with the supply chain which can result in a medicine being taken off the market temporarily and an unlicensed version being brought in.

Mostly the unlicensed medicines industry has begun through small specialist wholesalers such as IDIS. Due to the small turnover generated from the unlicensed industry, these wholesalers could only grow from further investment. An example of this is Clinigen acquiring IDIS in 2015. Another way that wholesalers can break into the unlicensed industry is by using current global contacts to diversify. These wholesalers may already specialize in selling UK licensed medicines, or Parallel Imports (PIs) which means that these companies already have a loyal customer base allowing the economies of scale to be more competitive with pricing. This is evident with larger UK wholesalers such as Alliance entering the market.

The growing market will be good news for the NHS where 1% of prescriptions are made up of unlicensed medicines, along with potential long term product shortages which will need to be remedied. With more market players the NHS will be able to tender to a larger range to further ensure that it is accessing the best price.

However, the industry is becoming more competitive and the size is not growing with it. With pricing needing to become more competitive to be able to challenge the larger established wholesalers, along with the impact Brexit will have not only on exchange rates but also on the importing of medicines, smaller wholesalers will need to look at other options to ensure the survival.