EsThe uncertainties of Brexit are leading to major logistics headaches for the pharmaceutical sector. Reuters reports Novo Nordisk’s UK General Manager, Pinder Sahota, as saying it is “unprecedented from a logistics point of view” while Sanofi’s UK MD Hugo Fry has stated that short-term measures are difficult to implement as firms “have to test and validate these routes into the country” in relation to insulin.
The U.K. faces a widespread challenge in managing imports of pharmaceuticals and other medical products during the Brexit process. Many drugs are perishable and most are delivered with minimal inventory balances to manage corporate and health service cash flows. Patients meanwhile are typically prescribed medicines for a one to three month period at a time.
Planning currently is particularly difficult – while it is likely Brexit will be delayed at least until Dec. 31 that is by no means certain, as discussed in Panjiva’s research of Sept. 10.
In the meantime, imports of pharmaceuticals and other medical products may have returned to business as usual. Panjiva’s analysis of official data shows that British imports of medicines and medical products from the EU increased by 1.6% year over year in July after a 25.3% drop in 2Q that was driven by the overhang of the original Brexit date. Imports in 1Q had risen by 24.4% in 1Q and then fallen by 24.3% in 2Q.
The EU represented 71.5% of total U.K. imports worth £24.8 billion ($30.8 billion) in the 12 months to Jul. 31, though imports from outside the EU are scaling up swiftly, for example with a 21.2% surge in shipments from the U.S.
Source: Panjiva
The situation for insulin is particularly acute given the existing density of supply chains. Panjiva’s analysis of Eurostat data shows British imports of insulin reached 434 million euros ($479 million) in the 12 months to Jul. 31 after an 8.1% year over year increase. The EU accounted for 99.9% of imports, with 64.9% points from Denmark (likely Novo) and 22.4% from France (Sanofi).
The pattern of imports of insulin had been even more variable than healthcare products generally with British imports having risen by 99.0% year over year in 1Q before dropping 33.5% in 2Q and 17.6% in July.
Source: Panjiva
