Anorak News | Why you can’t have free trade and price fixing – its kills NHS patients

Why you can’t have free trade and price fixing – its kills NHS patients

by | 15th, March 2012

THERE’S a good piece here about the life and business of a parallel drug importer. Nice Austrian lad getting rich by buying drugs in cheap places (yes, we’re talking about prescription drugs, not the fun ones) and selling them on in expensive places.

This all happens because we have free trade across the European Union. Good thing to have too, people, products, capital and companies can all move as they wish.

However, we’ve also got a system of national, taxpayer funded in the main, health care services. And as always when governments are uying things there’s a temptation for them to fix the prices at which they buy them….and buyers tend not to fix those prices too high now, do they?

So, the Greek, or Italain, medical system says this drug only costs £x, while in Germany perhaps it might be selling for £2x. What happens when you mix and match that with free trade?

* Drug shortage as phramacists sell medication abroad.

* The lives of NHS patients are being put at risk because vital prescription drugs intended for British use are being diverted abroad for profit by wholesalers and pharmacists.

Yup, you get people buying the drugs in the cheap countries and selling them again in the expensive ones. Just as yer man in the first story is doing to the une of £500 million a year.

People do die from this too: manufacturers will be producing enough for the cheap country at the prices the cheap country demands but then at least some of those drugs are shifting to the high priced countries and thus some cannot get their medicines and thus they die.

There’s two possible solutions to this: stop peop[le being able to export/import drugs is one of them. But that won’t really work, free movement of goods is too deeply embedded in the entire EU system to be able to change that now. The other way is to stop governments insisting on lower than market clearing prices. Something that’s unlikely to happen either: I can’t see the NHS being happy with having to pay more for everything, can you?

Unfotunately, those are the only two available solutions, neither of which is politically possible. So it’s just going to carry on then.

Posted: 15th, March 2012 | In: Money Comments (2) | TrackBack | Permalink