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‘Grim milestone’: More drug concessions than ever sit below purchase price

The Pharmaceutical Services Negotiating Committee (PSNC) has called on the government to overhaul the way it sets price concessions following reports that pharmacy contractors are dispensing swathes of medicines at a loss. 

The Department of Health and Social Care (DH) granted a “record” 138 medicine price concessions for August, 39 of which do not tally with their market price or the prices contractors have reported paying, the negotiator said last week (September 2).

PSNC’s chief executive Janet Morrison said the DH had imposed more prices below what the negotiator had requested than ever before, marking what she described as a “grim milestone…causing chaos and very great worry for pharmacies” and frustration for the negotiator.

After contractors flagged that the imposed reimbursement prices for Aripiprazole and Temazepam tablets were significantly below their purchase prices, PSNC called on the DH to rethink its price concessions system.

Read more: DH to bring in new ‘fairer’ discount scale to reduce dispensing at a loss

Although the negotiator conceded that the DH’s reluctance in setting "inflated" concessionary prices was aimed at avoiding “gaming in the market at the taxpayers’ expense”, it is “untenable for there to be such a difference between concession and market prices for particular medicines”, it stressed. 

“The concessions system is no longer coping with the current price volatility in the market,” it said.

C+D has contacted the DH for comment.


Prices must reflect reality on the ground


PSNC appealed to the DH to become “more responsive” to market changes when it comes to price concessions, and to agree on prices more swiftly.

It also called on the DH to use “high-quality data that reflects the reality presented by contractors on the ground”.

Read more: What is behind February's large number of price concessions?

“We need…to be assured about the quality of data being used by DH, which doesn’t appear to match the reality for contractors on the ground,” Ms Morrison noted.

Although PSNC pledged to bring these concerns to the new Prime Minister, confirmed as Liz Truss this afternoon (September 5), it has “escalated” its demands to the current government, it said.


Behind the concessions


Medicine reimbursement prices “have not kept pace with market prices for several months”, PSNC claimed, as limited of stock of some medicines has driven up their market price.

The combined of the COVID-19 pandemic, Brexit, the war in Ukraine, inflation, and rising energy costs are also behind spiking drug prices, the negotiator added.

PSNC is due to hold a webinar explaining price concessions webinar on September 7, with its director of pharmacy funding Mike Dent and drug tariff and reimbursement manager Suraj Shah.

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