3 UK pharma companies go broke, costing 1,000 employees their jobs: reports

Three large U.K. pharmaceutical companies are in financial trouble and are shutting down, costing about 1,000 employees their jobs, according to local reports.

Testerworld, Doncaster Pharmaceuticals Group and Eclipse Generics are all part of the Converse Pharma Group, a U.K. group of companies founded in 2013 that focuses on wholesale distribution. The companies have entered into administration, a program to either rescue a company or wind down its operations, according to several reports in England.

Administration can be compared to Chapter 11 bankruptcy in the U.S., but with differences. It requires an administrator to “rescue the company” or halt operations if that's not possible, according to Practical Law UK.

Kroll, a banking, finance and investment firm has been tapped to help with the process. The company told Independent Community Pharmacist it was “working with the relevant authorities to provide support to those employees affected,” and that it aims to mitigate the impact on the pharmaceutical supply chain.

The first objective will be to conduct an “orderly wind down” of the businesses, the company added.

Last year, Testerworld had its operating license suspended by the Medicines and Healthcare products Regulatory Agency over “customer and supplier validation and control protocols," YorkshireLive reports. The agency partially lifted the sanction the next month. 

The development has sparked worries about drug shortages, but a spokesperson for the Department of Health told the BBC that “no significant disruption to supplies is currently anticipated."

The companies serve 4,000 pharmacies in the U.K., according to The Mirror.