Pharmaceutical industry parallel trade

In the 1999 PPRS negotiations, as a part of the agreement, the DoH imposed a 4.5% price reduction on sales to the NHS. This was equivalent to a loss of sales by the industry of 200 million. Because the 1999 revision of the PPRS permits companies to modulate these enforced price reductions across their product range, it could be expected that companies would do so in such a way that competition from parallel-traded products would be reduced, maximum price reductions being applied to those products that were currently being most affected by parallel trade. The 2004 PPRS enforced a 7% price cut on the pharmaceutical industry. 

The reasoning behind parallel trading is that of the free market and that the best (i.e. lowest) prices can be obtained for any particular pharmaceutical presentation. Having worked in the industry for 36 years, there is one point the author has learnt— Ministries of Health actually control all the prices. 

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