By Ben Hirschler
LONDON (Reuters) - Britain faces a worsening shortages of medicines because vital supplies are being sucked out of the country by exporters who can sell them for higher prices elsewhere, lawmakers said.
The All-Party Pharmacy Group (APPG) said on Tuesday the government needed to consider ways to curb this so-called parallel trade, allowed under European Union rules and which can distort the distribution of prescription drugs.
Action by drug manufacturers to try to solve the problem by introducing quotas for drugs in a bid to stop exports has made the situation worse.
Parallel trade is also a headache for countries such as Greece where the government has slashed prices for certain medicines by up to a quarter as part of its austerity drive, leading to increased exports.
In the case of Britain, exports have been encouraged by a weak pound, making the country a cheap place for middlemen to source supplies - in contrast to a few years ago when prices were relatively high and drugs were imported.
APPG chairman Kevin Barron said there was scope within European legislation for the government to exempt certain goods from free movement if there was a threat to public health, and his group called for government consideration of this.
"The problem of medicines shortages is an extremely serious one, and our report shows clearly that patients are suffering harm as a result of not being able to get crucial medicines.
"We have had this problem now for over four years, and the government has intervened to mitigate shortages on a number of occasions, with no effect. In fact, the problem is getting worse, not better," Barron said.
After taking evidence for six months, the APPG said it had heard from patients with serious conditions such as epilepsy, schizophrenia and diabetes who had not been able to get drugs when they needed them. In some cases, people had been hospitalized as a result of medicine shortages.
Other countries, including France, are now investigating the possibility of prohibiting the export of medicines. Barron said "this government needs to urgently look at what they can learn from this".
The APPG also said Britain's healthcare regulator, the Medicines and Healthcare products Regulatory Agency, should do more to address supply problems and consider limiting the growth in drug wholesaler licenses.
While the vast majority of medicines dispensed in Britain come from a few big players like Celesio and Alliance Boots, there are some 1,800 licensed wholesalers engaged in small-scale supply and parallel trade.
The widespread practice of parallel trading in medicines has long been a bone of contention for big drug companies like AstraZeneca, GlaxoSmithKline and Pfizer.
Industry critics also say the presence of thousands of small wholesalers across Europe makes it more difficult to stamp out trade in counterfeit drugs.
(Editing by Dan Lalor)