This ingenious plan to save expiring drugs had only one problem: It was illegal

On one side, a pharmacy with a shortage of medications for patients who need them. On the other, a pharmacy with a surplus of those medications that are about to expire. To combat the imbalance, many pharmacists in the Netherlands had long been informally sharing drugs with one other, communicating over WhatsApp groups or email chains, and then mailing the medications.

In 2019, two pharmacists set out to formalize this pharmacy-to-pharmacy sharing concept, essentially creating a marketplace for drugs. PharmaSwap helps reduce the 100 million pounds (about $122 million) worth of wasted medications every year just in the Netherlands, lowers costs for buyers, and potentially reduces wait time for patients in a time of acute drug shortages in Europe. Though it first had to roll out via a rather clandestine pilot, in order to circumvent stringent EU laws, the platform launched fully in 2021 and is now set to expand to other European nations.

To help build the platform, Amsterdam pharmacists Jelmer Faber and Piter Oosterhof approached FLOOW2, a company that builds B2B sharing platforms for businesses and governments, mostly in the healthcare space.

The process for sharing medications seemed simple: a user would create an account, and the platform would verify that they are a pharmacist. They would list the excess items they’re selling—say, pills or vaccines that would otherwise go to waste (but that are preferably two months out from expiry)—in a searchable database. Other pharmacists who needed those same medications could respond; together, they’d agree on a price, and then a courier service would pick up and transports the items.

But there was one considerable hurdle for PharmaSwap: It was illegal. In accordance with EU law, only wholesalers with permits can sell medications to pharmacists; and pharmacists can sell only to patients.

Still, they wanted to show the authorities that the problem existed, in an attempt to change the laws. So, they started a “secret pilot,” says Lieke van Kerkhoven, cofounder of FLOOW2, with 20 pharmacists. It was a risk, but they were confident they could influence the status quo because “people really resent wasting medication,” she says. “Everyone has this story of having an aunt die, and all this medication that had to be thrown in the trash.” (While that particular scenario isn’t addressed by PharmaSwap, it did show an opportunity to sway public opinion, and then lawmakers.)

In six months, the secret pilot saved 54,000 pounds (just shy of $66,000). In September 2021, the Dutch Healthcare Authority admitted there was a problem, but said it was an EU law and thus out of their jurisdiction. But, they offered a workaround: The platform could deal with patients, rather than medications. So now, it works in the same way, but the buying pharmacy sends the patient’s prescription to the selling pharmacy. That selling pharmacy becomes the official treating pharmacy, fulfilling that patient’s prescription, and the package is sent to the buyer. “It’s just a slightly different workflow,” van Kerkhoven says.

It ends up saving money for the original purchasing pharmacists, who save 40% to 50% on procuring drugs versus traditional bulk purchases from wholesalers. For sellers, it’s a chance to earn some extra income for drugs that would otherwise be wasted. And for patients, while it doesn’t lower drug costs, it allows for faster delivery of needed treatments at a time when drug shortages are sweeping Europe. (PharmaSwap takes a 10% transaction fee from pharmacy-to-pharmacy sales, which covers the transport costs.)

And it’s helped reduce environmental waste, so far saving the CO2 equivalent of 50,000 kilograms (or more than 110,000 pounds), according to van Kerkhoven, which could help especially large pharmacy chains, since mandatory carbon reporting continues to roll out, and businesses have to demonstrate concrete actions toward curbing emissions.

A recent European Healthcare Procurement Award in the sustainability category may boost brand recognition and help the company expand to other countries. In the spring, they’re set to launch a pilot in the U.K., and they’re in talks to do so in other European countries as well. Van Kerkhoven thinks the model could also work in the U.S., which wastes almost $3 billion worth of unused drugs a year. Particularly, she says, it could help big chains, like CVS and Walgreens, work with each other to optimize their stock in each location; and if they worked with other rival chains, results could be even better.

“This is not a European problem,” she says. “The rising healthcare costs are a global issue.”