Hospital criticised for profiting from medicines trade

An NHS hospital has been heavily criticised for trading in medicines to make a profit.

It has emerged that the Royal Surrey County Hospital Foundation Trust has made £300,000 profit through selling medicines on to parallel traders who export the drug to lower-priced European markets.

The trading was uncovered by the Health Service Journal, which found the Trust earned £4.6 million in revenue over 10 months by buying drugs at the NHS price and selling them to a wholesaler for export. The low value of the pound meant the hospital made a £300,000 profit.

The practice has been criticised because some parts of the NHS are experiencing shortages in some medicines, including drugs such as cancer treatment Arimidex.

Many feel it is inappropriate for an NHS trust to trade in medicines for profit, but it has emerged that foundation trust regulator Monitor was aware of the practice and allowed it to continue.

Paul Biddle, the foundation’s director told HSJ: “Yes, we did see this as an opportunity to make a margin.

“I felt we didn’t have anything to hide in this. It was openly declared when we went through the assessment with Monitor [the foundation trust regulator]. They have always encouraged trusts to be entrepreneurial.”

The trust says it stopped the practice in January when the change in the Euro – Sterling exchange rate meant it was no longer sufficiently profitable.

On 9 February, less than two weeks before the story broke, health minister Mike O’Brien issued a statement saying that the practice was ‘unacceptable’, but did not identify who was involved in the practice.

Dr Richard Barker, director-general of the Association of the British Pharmaceutical Industry, said: "It beggars belief that a NHS hospital is seeking to profit by selling abroad medicines being made for UK patients. Like others, they have been blinded by the chance to cash in on low prices.

"Manufacturers in the UK are doing all they can to get supplies to where they are needed - in pharmacies, surgeries and hospitals. Actions like those of the Royal Surrey County Hospital and other speculators totally undermine these efforts.

"Like everyone else involved in the supply chain, their first duty should be to patients in the UK. All sides should be working together to ensure medicines being made for patients in the UK actually reach them."

Another contributory factor in the shortages of medicines is the introduction of new, much stricter, supply chains controls enforced by pharmaceutical companies.

A multi-stakeholder summit is due to take place in early March in order to address the problems.