Britain could face a shortage of medicines this winter as the value of sterling slides and after the introduction of a new pricing regime was botched, pharmaceutical industry chiefs said last night.

Stocks of prescription drugs have fallen to their lowest level in decades, Martin Sawer, chairman of the British Association of Pharmaceutical Wholesalers, said.

The Department of Health has held talks with the NHS and the pharmaceutical industry in an effort to resolve the situation.

The steep recent fall of the pound against the euro has encouraged so-called “parallel traders” to buy prescription medicines in bulk in Britain at lower cost for export to Scandinavia and Germany, to be resold at a higher price. This has been taking its toll on supplies in the UK.

At the same time, the switch to a new drug-pricing regime, in which the NHS will pay roughly 5 per cent less for medicines in January than now, is forcing drug wholesalers to run down their stocks before Christmas. They are trying to avoid a situation in which they have bought medicines at the old, higher price in December for sale at a lower price in January.

Ian Brownlee, managing director of Mawdsleys, one of Britain's biggest bulk distributors of medicines, said: “It is a very substantial financial situation for us. Wholesaling is a very low-margin business so, without destocking, that 5 per cent price cut would knock our annual profits by 50 per cent.”

Mr Brownlee said that the situation had been compounded because demand for medicines was higher in January than at any other time of year. He said that in a normal year wholesalers held higher stocks at Christmas than at any other time in order to cope with high seasonal demand and requests for double prescriptions as patients prepare for the holiday period, during which many pharmacies are closed and people visit friends and relatives.

Mr Sawer said that January 1 was the “worst possible date in the year” to introduce the new drug-pricing arrangements. “It should have been introduced in August,” he said.

Wholesalers are unable to reveal which drugs are most at risk because manufacturers have not said where they will make cuts under the revised price scheme. The Department of Health said that negotiations with the industry were continuing but declined further comment. The Association of the British Pharmaceutical Industry said that it took the threat of shortages seriously and was doing all it could to prevent supply problems.

Although it is frowned upon by the big pharmaceutical companies, parallel trade in medicines is a legal practice. Traders buy pharmaceuticals in bulk in one European Union country where the price is low and repackage them for resale at a profit in another country where they are more expensive. Until this year, Britain has been seen as a destination for parallel traders to import drugs sourced cheaply from Greece or Portugal, but the weak pound has virtually halted the trade into the country and instead it is being used increasingly as a place to source cheap medicines for export overseas.

Because pharmaceutical companies carefully control the supply of medicines in individual countries, this has had a significant impact on supplies of particular products, Mr Sawer said.

Caught cold

— The NHS pharmaceuticals bill is about £11 billion a year — the new pricing regime will cut that by £550 million

— Drug wholesalers are reducing their stock before the new pricing regime comes in, prompting fears of a shortfall of drugs in January, the month with highest demand

— The medicine bill accounts for about 18 per cent of the total NHS budget

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