A warning from Novartis

May may or may not be able to pull off a Brexit deal prior to the country’s deadline. Novartis has looked into its crystal ball and told us what’s in store if there’s no Brexit deal. A statement released by Novartis warns that a no-deal Brexit “…will be hugely impactful for patients, particularly around the supply and safety of medicines.” To blunt the effects of potential difficulties importing drugs into the UK, Novartis is stockpiling supplies in the country ahead of the breakup. In addition, Novartis is pleading with pharmacists to not stockpile drugs and, instead, allow supply to be managed centrally by the company and avoid shortages around the country. Good luck. We’re all counting on you.

1. Not all drug economic models are the same, it’s complicated

You don’t have to listen too carefully to hear the constant mantra of “lower drug prices” being shouted from the rooftops. The healthcare delivery system in the US works like most other free market environments. When profits are high (demand > supply) entities enter the market and when profit dries up (supply > demand) entities leave the market. It is no different for the manufacturing of drugs, especially for generic products not protected by a patent. As the Wall Street Journal recently reported, a case can be made for increasing the prices of certain generic injectables, especially those critical to emergency room treatments. Drug pricing, drug supply, and the development of innovative products are all linked. By better understanding these linkages we can shift the conversation from drug “prices” to drug “economics” and we think that is good for all involved.