28 December 2001

Medicine costs set too high?

ANIMAL medicines have always been a major cost for any livestock enterprise, but now the debate is hotting up as to whether prices can and should be lower.

Animal medicine manufacturers are under investigation by the Competition Commission for price fixing of vet medicines, with critics calling for more supplies of prescription only medicines through pharmacies.

The Office of Fair Trading ordered a major investigation into the £200m/year POM market in October.

A preliminary investigation by the OFT followed NFU Scotlands appeal over members concerns about paying higher prices for POM products, compared with their EU competitors.

"Current medicine prices are out of line with livestock producer returns. They also compromise welfare, as well as the competitive position of the Scottish livestock industry," union vice president Peter Stewart told farmers weekly.

In October, the OFTs initial report found UK prices to be high and pointed out a lack of price transparency in medicines and the reluctance of manufacturers to supply vet pharmacies. They recommended medicines be supplied through an increased number of pharmacies, allowing price competition between them and vets.

But the National Office of Animal Health, which represents manufacturers, denied any knowledge of monopolistic practices among its members. "However, we cannot condone any breaches that have taken place," a NOAH spokeswoman said.

She added EU price comparisons of vet medicines must be done on a like-for-like basis. "Higher UK prices could be down to higher costs of running businesses here and to the distribution system."

David Tyson, president of the British Vet Association, refuted the claim that British producers were being overcharged for medicines and that the investigation should look in to regulations controlling vet medicines. "We are in Europe and it is EU legislation that controls vet medicines, yet Fortress Britain additionally applies its own controls.

The Competition Commission has 12 months left to report its finding regarding any evidence of a manufacturers monopoly operating against producers interests. &#42

PRICE-FIXING?

Competition Commission study.

Highlighting manufacturers.

Increased supply to pharmacies?