With a Backup to the Backup, Insulin Makers Say They're Primed for Brexit

By Kate Holton and Paul Sandle

September 19, 2019

LONDON (Reuters) - For two men trained as scientists, the bosses of Britain's major insulin providers have had to become experts in ferry schedules, trucking laws and warehouse capacity as they seek to guarantee the supply of life-saving drugs through a chaotic Brexit.

With Britain set to leave the European Union within weeks, Pinder Sahota at the world's biggest insulin maker Novo Nordisk, and Sanofi's Hugo Fry have rebuilt operations to withstand the most turbulent of events.

The two companies told Reuters they had spent millions of pounds, which they cannot recoup, stockpiling millions of packets of insulin inside Britain and building new shipping and air freight routes.

Their plans, formulated over three years, show the lengths companies across the continent are having to go to overhaul long-standing supply chains that may not survive Britain's biggest trade upheaval in half a century.

"There is nothing comparable to this," Novo Nordisk's UK General Manager Sahota told Reuters of the Danish company's preparation. "It's unprecedented from a logistics point of view. We're preparing for the worst-case scenario, the most extreme."

With two Brexit deadlines already been and gone, Prime Minister Boris Johnson has vowed to take Britain out of the EU with or without a deal by Oct. 31 - increasing the chance of a sudden departure that brings trade tariffs and customs checks with the continent for the first time in decades.

The government's own planning shows that, in a worst-case scenario, lorries seeking to enter Europe at the French port of Calais could face delays of two-and-a-half days, creating supply disruptions that could last for months.

That poses a real risk for the pharmaceutical industry which imports 37 million packs of drugs from Europe a month. According to the government, three-quarters come via that route.

While Britain's GSK and AstraZeneca are world leaders in respiratory and cardiovascular treatments, Britain's insulin is imported.

"In the case of pharmaceuticals, you can't just throw things onto a boat or a lorry, you have to test and validate these routes into the country," Fry told Reuters in his office to the west of London, adding they had backups to their backup plans.

Both Sanofi and Novo Nordisk have reserved space on ferries going the longer route to eastern English ports to avoid the main Calais-Dover crossing if needed, and also air freight if required.

"We anticipate that route is going to become congested so what we've done is open up other routes," said Sahota. "So two other routes that we've opened up are Denmark to Immingham (in north-east England) and Netherlands to Immingham."

SKY-HIGH STOCKPILES

Novo Nordisk, Britain's biggest insulin supplier, has tripled its warehouse capacity to hold 18 weeks' worth of stock - 3.8 million packs that piled high would stand 12 times the height of the London Shard skyscraper.

Eli Lilly of the United States and France's Sanofi, the country's second and third-biggest suppliers, have similar stockpiles.

Frustration is growing that while they dedicate huge resources to such preparation, they are spending less time on their normal jobs.

"When we're doing this, we're not doing other stuff," Fry said. "We're not working on projects that will bring our most innovative products to the market.

"Although we are happy to do it, it is starting to weigh on our balance sheet, on our logistics, keeping all this additional stock in the country. It's not an ideal situation."

The companies are confident they will be able to guarantee the British supply of insulin to the around 1 million diabetes patients who need it.

But some patients like Georgina from London, who was diagnosed with Type 1 diabetes more than 30 years ago, have become increasingly alarmed as the chances have grown of Britain leaving the EU without a deal to govern their trading relationship.

"For me, I can't tell you how worried I am about that. It's life-threatening for me," she said, declining to give her last name. She added that she also worried about older patients she encountered at clinics.

The British government is organising a regular freight service reserved just for drugs as part of its preparations alongside industry for Brexit on Oct. 31.

"We are doing everything we can to help ensure the supply of medicines and medical products remains uninterrupted, including insulin," said the department of health and social care.

The two drug companies did not say how much their Brexit preparations had cost, beyond many millions of pounds. With fixed contracts with Britain's health service, they cannot raise prices.

Both Fry and Sahota have had to delve into arcane areas of transport.

As part of their planning, for example, they have had to factor in how many drivers are needed to avoid breaking legally mandated rest laws, how long refrigerated lorries can operate in one stretch, and what happens in the event of fuel shortages.

"We're doing everything we can," said Fry. "I know more about ferry crossings now than I ever thought I would."

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