Government writes to medicine suppliers requesting a six week stockpile

10.08.2020

On 3 August 2020, the Department of Health & Social Care (DHSC) wrote to medicine suppliers in the UK requesting that, amongst other things, they stockpile six weeks’ worth of medical supplies on UK soil in preparation for the end of the Brexit transition period.

The Government has already confirmed that the Brexit transition period will end on 31 December 2020 and that there will be no extension. This means that new border and customs procedures will apply (although the implementation of such border controls will be staged).[1]

June 2020 Industry Memorandum

Back in early June, an internal pharmaceutical industry memorandum obtained by the BBC[2] made recommendations in relation to preparations for the end of the transition period. The comments in that industry memorandum included:

  • a recommendation that the Government buy and store its own stockpiles of critical products;
  • a recommendation that the Government provide details on how industry is able to access Government secured freight capacity (GSFC) (by the end of August) if products require re-routing;
  • a warning that stockpiles in June had been “significantly reduced and/or used up entirely” as a result of COVID-19;
  • a warning that stockpiling was not going to be a single answer to ensure the continuity of supply of medicines and medical products after the transition period since not all products could be stockpiled and there was “less or zero product on the market to allow for stockpiling” due to depleted stock, export restrictions and increased competition as a result of COVID-19;
  • a warning that Christmas was the worst time of year to ask companies to increase stockpiles;
  • a warning that, in order for stock-building to have “significant impact”, it had to start in June/July;
  • a request that Government work with industry in order to develop a “list of critical products for targeted engagement” in light of both COVID-19 and the end of the transition period; and
  • a request for urgent clarity about the implementation of the Northern Ireland protocol.
3 August 2020 Letter to Industry

The DHSC’s letter addresses some of the points raised in the industry memorandum from June. The following points are particularly interesting:

  1. The Government has recommended that companies avoid the short straits (i.e. between Calais/Dunkirk/Coquelles and Dover/Folkestone) “as a matter of priority”. It appears as though the Government anticipates disruption on those freight routes following the end of the transition period. While industry sought confirmation of the Government’s intent to provide capacity on the GSFC by the end of July, the DHSC’s letter makes clear that capacity on the GSFC has not yet been secured for the health and social care sector.
  2. A request that all suppliers confirm their contingency plans to the DHSC for the end of the transition period in respect of stock-holding in the UK, re-routing away from the short straits and readiness for new customs and border arrangements. The Government “encourages” companies to stockpile 6 weeks’ total stock on UK soil. This recommendation glosses over some of the concerns raised by industry back in June, notably that any stock-building would have to start in June/July in order to have a significant impact.
  3. The Government itself intends to build back to a “target level of 6 weeks’ total stock”.
  4. While acknowledging that previous preparations for Brexit had included securing dedicated warehouse capacity for suppliers of medicines to stockpile in the UK, the Government has now indicated that this will not be available to suppliers.
  5. A “command paper” was published in May setting out the UK’s approach to the Northern Ireland Protocol. However, the Government has committed to providing further guidance relating to the detailed workings of the protocol in the coming weeks.
Conclusion

While the DHSC’s letter addresses some of the concerns raised by industry back in June, most of the burden is placed on industry. The end of the transition period is less than five months away and, in this context, there is concern that clarity from the Government on key issues such as the operation of the Northern Ireland Protocol has not been forthcoming.

The Government is preparing for significant supply chain disruption at the end of the transition period. COVID-19 has had a significant impact on medicine stockpile levels, but it remains the case that ensuring adequate stockpiles and maintaining supply chains for products that cannot be stockpiled must remain a priority.

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[1] https://www.gov.uk/government/news/government-accelerates-border-planning-for-the-end-of-the-transition-period

[2] See BBC Economics Editor, Faisal Islam’s Twitter thread here and the story here.

Alex Denoon

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Sam Harvey

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