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Pharmacy faced £1k loss after AAH doubled drug price following order

An independent pharmacy group faced over £1,000 in losses after AAH Pharmaceuticals doubled the price of an order of omeprazole after it was placed, C+D can reveal.

Citywide Health director and co-owner Richard Harrison told C+D that he had ordered 1,700 boxes of omeprazole 20mg capsules on January 24 at 93p each via the tendering portal Drug Comparison.

However, when the boxes arrived, Mr Harrison noticed that the invoice from AAH showed that each box cost 180p – leaving him with a loss of more than £1,000 – he said.

C+D has seen images of the stock being ordered at the 93p price and the invoice received showing the boxes at 180p. 

Read more: AAH launches WhatsApp channel for 'instant updates’ on delivery delays

Independent pharmacy group Citywide runs seven pharmacies across York and Mr Harrison placed an order on behalf of each of the branches, he said. “When I see a price that I think is a good price, then I order a month's supply,” he told C+D this week (February 5).

AAH stressed that a “minimal” number of customers were affected by the incident, that it is working with them to “resolve” it and that it is “committed” to “upholding fairness in pricing”.

Read more: 'No longer viable': York pharmacies to merge amid spiralling staff costs

Following C+D pressure, it has offered Citywide “some monetary compensation” for its losses, Mr Harrison said today (February 8).

According to the most recent NHS Business Services Authority (NHSBSA) data, omeprazole was the second-most dispensed chemical substance in England, with 35.6 million items dispensed in 2022/23.

 

“Erroneous quotation”

 

Mr Harrison said that he ordered from AAH over competing wholesaler Phoenix, which was offering the proton pump inhibitor at 101p per box at the time, according to Drug Comparison’s live pricing system.

Once the error was noticed, the lowest price on offer for omeprazole had risen to 165p, only a few pence below the tariff.

A spokesperson for Drug Comparison told C+D on February 6 that it was informed of a pricing modification by AAH on January 22, effective from January 23.

Read more: Prescription costs up 8% to over £10 billion in England, NHSBSA reveals

But AAH had included “an erroneous quotation” for omeprazole in this update and Drug Comparison customers who bought the drug on January 23 and 24 were “mistakenly overcharged on their invoices”, they said.

Drug Comparison’s spokesperson added that AAH’s pricing update had not accounted for the manufacturer’s “central price alteration”. 

They told C+D that once the “discrepancy” had been communicated to AAH, the wholesaler was “unable to issue a credit” to contractors for the price difference and instead requested that customers “return the item within [its] stipulated 72-hour return policy”.

Read more: How should you discuss omeprazole in an MUR?

They added that they believed the issue had “adversely affected a broad spectrum of pharmacies” and was not limited to Drug Comparison users.

And Mr Harrison said that he is in a WhatsApp group with “at least 100” other contractors affected.

 

“Belligerent”

 

Mr Harrison told C+D that he was not alerted to the error by AAH but found it himself.

“There was nothing from them at all, they were just going to leave it. If I hadn't spotted it, we would have had to accept a higher price,” he said.

He added that the “integrity” of AAH’s system has been “lost” and that he was no longer “confident” about ordering stock from AAH. 

Read more: Lloydspharmacy goes into liquidation with £293m owed to creditors

Instead of honouring the price and offering to credit pharmacies for the difference caused by the invoicing error, AAH initially offered a stock return to Mr Harrison, he said, adding that the wholesaler had been “belligerent” in its response.

But this morning, Mr Harrison said that C+D pressure had led AAH to offer Citywide “some monetary compensation” for its losses, an explanation for the error and a promise that it would “try to prevent a recurrence”.

 

AAH “committed” to fair pricing

 

A spokesperson for AAH told C+D yesterday (February 7) that it is “proactively working with the minimal amount of [its] customers” affected by the issue to “resolve any concerns or impacts to their businesses”.

The spokesperson said that the price of omeprazole is set by its manufacturer since it is a “manufacturer scheme product” and its retail price was adjusted mid-month.

They added that AAH is “committed” to “upholding fairness in pricing”, which can “fluctuate rapidly” due to a “complex interplay of factors”.

Read more: New government strategy to tackle medicines supply chain issues

“Our goal is to guarantee the uninterrupted sourcing and supply of medications for our customers, while also delivering value for money for both them and the NHS," they said.

In May, Mr Harrison told C+D that Citywide had decided to merge two of its pharmacies due to cost pressures, saying at the time that “upward pressures” on costs, particularly staff salaries had made the 100-hour Huntington Pharmacy “no longer viable”.

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