Medicine costs inquiry demand

17 December 1999




Medicine costs inquiry demand

THE Scottish NFU is demanding a government inquiry to establish why Britains farmers have to pay so much more than their competitors for veterinary medicines.

In a report released this week, the union points out that the cost of some animal health products can be more than 200% greater in the UK compared with other countries, such as Ireland and New Zealand.

Union president Jim Walker has called for a review by the Scottish parliament of the pricing, licensing and supply of veterinary products. And he hopes to persuade the Edinburgh administration to put pressure on the Office of Fair Trading to get the matter referred to the UK Competition Commission.

Higher prices charged by the manufacturers of veterinary products in the UK was putting producers at a considerable competitive disadvantage, he said.

"It is an unnecessary and unjustified extra cost burden at a time when producers can least afford it."

The report shows the extent of the increased prices charged in the UK. For example, producers here have to pay about £330 for a 15 litre container of sheep wormer when the identical product costs just £120 in New Zealand. And while a 100ml bottle of the antibiotic Embacyclin LA costs £5.85 in Ireland, the price is 273% higher in Scotland.

When the union put its concerns to animal health firms trade body NOAH, it said there was no single reason why UK prices were higher.

Exchange rates, the high cost of product licensing and the arrangements for the supply and distribution of veterinary products in the UK all had a bearing, NOAH said.

But, it also suggested that product manufacturers included within their pricing policy and element of what they believed the market would bear.

"The union accepts that monetary exchange rates, and variable product licensing costs will indeed have a bearing on the cost of identical veterinary products from one country to another, but these factors alone are unlikely to explain the magnitude of the price discrepancies reported to us," the report states.

"The size of the price discrepancies experienced draws the union to conclude that the price of veterinary products in different countries is indeed based in large measure on what the manufacturers believe the market will bear."

If that was the case, Mr Walker added, prices in Scotland should have dropped significantly in line with the downturn in farm incomes in the past three years. That had not happened. &#42


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