MPs plan probe of Glaxo drugs ploy

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The Independent Online

GlaxoSmithKline's attempts to crush parallel imports of its products could be at the centre of a major investigation by the Government's Health Select Committee.

The move has been prompted by The Independent on Sunday's revelations that GSK's new hard line on grey-market imports could cost the NHS as much as £30m extra a year. The pharmaceutical giant's strategy involves setting maximum order sizes on foreign drugs wholesalers, forcing UK-based pharmacists to buy Glaxo drugs at higher prices.

David Hinchliffe, chairman of the Health Select Committee, has warned the Government of the need for a major inquiry into the role of drugs companies in respect of National Health Service policy.

"This is an area where a large company such as Glaxo-SmithKline can have a huge impact. I am very keen for my committee to look into this, and any other companies that may be involved," he said.

He added that the current situation provoked by GSK could be incorporated into a wider investigation this year.

"We are looking into ... drugs pricing. The more I look at it, the more I am convinced that NHS policy is determined by the behaviour of these big companies," said Mr Hinchliffe. The NHS has also indicated that it is eager to find out the full details of GSK's plan, and did not rule out taking further action.

GSK launched its attack on parallel imports via a letter sent last month to continental drugs wholesalers. In it, the company informed customers that they would be allowed to buy only enough to satisfy domestic needs. Traditionally, wholesalers in Spain and France have been able to buy an excess of GSK products more cheaply than they can be bought in the UK, and then sell them on to British chemists at rates that are still cheaper than the price GSK would charge.

The NHS reimburses chemists for the prescription drugs at a rate that takes into account pharmacists' ability to get their hands on parallel import drugs. With that ability removed, the NHS will be forced to pay out to cover GSK's higher prices.

As well as incurring the possible wrath of the NHS, GSK could find its legal position on the issue to be a tenuous one. The European Commission, on competition grounds, has already blocked similar moves made by GSK to limit parallel imports in Spain.

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