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LEBANESE PARALLEL IMPORT THREAT CONTINUES

September 16, 2005

Affiliates of foreign research-based drugmakers in Lebanon have highlighted the problem of parallel imports. Much of the blame has been attached to loopholes in a law passed in 2002, which weakens parts of the supply chain between manufacturers and distributors.

US drug sector lobby PhRMA argues that the law effectively allows copy drugs to enter the market, and that pharmacists rarely pass on any savings from cheap imports to consumers.

Nevertheless, the opportunity that parallel importation represents is obvious, given that local drug prices are among the highest in the region. Some retailers are known to have average product margins of roughly 75%. Meanwhile, official health data suggests government expenditure is growing at up to 9% per year -- 3% faster than GDP.