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Last Updated: Monday, 22 March 2004, 07:46 GMT
Imports 'cost drug firms 770m'
Cheap pharmaceutical imports from Europe are costing UK drugs firms 770m a year, the Economic and Social Research Council (ESRC) has said.

But the Association of the British Pharmaceutical Industry said its estimates put the figure at 1.4bn.

UK manufacturers have voiced concern over parallel trade - importing drugs from an EU country at cheap prices.

The ESRC also warned the trade could impact on research and development in the industry as profits suffer.

Dr Stefan Szymanski, of Imperial College London, who led the ESRC study, said: "The impact of parallel trade on pharmaceutical markets has been the source of great controversy."

On the one hand importers see themselves as "benign agents prompting competition", he said.

'Research suffers'

"By contrast, pharmaceutical manufacturers view the activities of parallel traders as undermining company profits and thus investment in research and development."

The ABPI echoed his concerns, adding: "The only people to benefit are the importers.

The group has estimated that around one in eight prescriptions handed out in the UK contains parallel imported products.

Dr Symanski's research concluded that while purchasers like the NHS would derive short term benefits from the trade - in the form of cheaper prices - overall it had a negative impact on the UK economy.

ESRC found parallel trade imports make up about 20% of the UK market, with some products up to 15% cheaper.

Based on these figures he calculated a 480m gain for the UK economy, against a 770m loss for drug firms - a net loss of 290m.

To cut losses to the UK, the report suggested the government take action to change its purchasing policy.

Parallel trade is a legal practice and so cannot be banned in the UK.

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