Iran War Triggers Sharp Rise in Medicine Costs Across England
The ongoing war in Iran has significantly impacted the cost and availability of essential medicines in England, with leading pharmacists reporting price increases of up to 30% for common over-the-counter drugs. According to the National Pharmacy Association (NPA), community chemists are now charging customers 20-30% more for paracetamol compared to February, while many have depleted stocks of certain strengths of aspirin and co-codamol.
Transportation and Chemical Shortages Drive Up Expenses
Since the conflict began nearly eight weeks ago, soaring petrol and diesel prices have escalated manufacturing and transport expenses for medicine suppliers. These higher costs are being passed on to pharmacies, which are paying 40-50% more to restock inventory. Additionally, air freight costs have doubled, affecting one in five NHS medicines that arrive by air, and supplies of petroleum derivatives from the Gulf, crucial for producing medications like paracetamol, have been severely constrained.
Impact on Generic Drug Manufacturers and NHS Budgets
Manufacturers of generic off-patent drugs, which operate on thin margins, have started raising their prices, contributing to a growing NHS medicines bill and higher prices at pharmacy counters. Olivier Picard, chair of the NPA representing 6,000 community pharmacies in England, highlighted that his Berkshire chemist faced a temporary inability to order paracetamol in late March, and when it became available again, the wholesale price had doubled.
Picard provided specific examples: the wholesale cost for a pack of 100 500mg paracetamol tablets surged from 41p to £1.99 by the end of March, later settling at £1.09. Consequently, over-the-counter prices have risen, with one pharmacy increasing a pack of 32 paracetamol from £1.19 to £1.50. For cetirizine tablets, a common hay fever treatment, purchase prices have nearly doubled since January, from 19p to 37p per pack of 30 tablets, with some distributors charging up to £3.
Potential for Further Increases and Supply Issues
Allergy sufferers may face additional price hikes during the main hay fever season in May or June. However, Picard cautioned against panic buying and stockpiling, warning that such actions could exacerbate shortages and drive prices even higher. Some pharmacies have already halted over-the-counter sales of aspirin due to supply constraints that predate the Iran war, and temporary shortages could worsen if the Strait of Hormuz, a key shipping route for petrochemicals, remains closed.
Government Reimbursement Challenges and Pharmacy Closures
Community pharmacies, which derive 90% of their revenue from dispensing NHS prescriptions at fixed reimbursed prices, are struggling with rising costs. In March, a record 230 items, including blood pressure drugs, antidepressants, and painkillers like codeine, were on the government's price concessions list, up from 90 in the same month last year. Notably, paracetamol and cetirizine were excluded from this list, despite paracetamol being prescribed 1.3 million times monthly in England, with pharmacies reimbursed only 49p for a 32-pack.
Picard emphasized that soaring medicine costs are forcing pharmacies to operate at a loss, leading to 1,400 closures since 2020 and a current rate of one or two closures per week. Higher supplier prices also strain NHS budgets through increased purchases and reimbursements, as well as affecting health systems abroad.
Broader Market Implications and Future Outlook
While generic drugs are often cheaper at supermarkets or online pharmacies before delivery fees, the Iran war's impact on costs and supply chains is likely to push these prices up as well, with branded versions potentially experiencing even steeper increases. Mark Samuels, chief executive of Medicines UK, noted that although immediate widespread shortages have been avoided due to existing UK warehouse stocks, transportation costs have risen by 700%, and some manufacturing chemicals are in short supply. He warned that if the conflict persists, rising prices or shortages of essential medicines could emerge within weeks.
