The negotiator announced last week (October 23) that pharmacy minister Steve Brine had agreed to an “unprecedented” 15p-per-item increase in advance payments in November.

Mr Brine was responding to the “extraordinary cashflow challenges” facing contractors – highlighted to the government by PSNC – and agreed to the “urgent measure” for November alone, it said.

“Price rises were initially triggered by the closure” of a Bristol Laboratories manufacturing site in Luton, and a Dr Reddy’s site in India, following inspections by the European Medicines Agency in August, PSNC director of pharmacy funding Mike Dent told C+D last week (October 26).

As a result, the negotiator “received several thousand reports of generic supply issues in September”, Mr Dent added.

“Generics is an international market and reducing manufacturing capacity somewhere in the system is bound to have some knock-on effects,” he told C+D.

PSNC continues to work with the Department of Health (DH) to highlight “the problems and risks involved in pharmacies not being able to obtain medicines for patients”.

BGMA working to tackle market “shocks”

The British Generics Manufacturers Association (BGMA) told C+D it is also working with the DH “to maintain supply of the affected medicines” following the “temporary regulatory issues”.

“When competition is reduced, such as in these circumstances, and efficiency is reduced by manufacturers changing their production schedules...it is natural [drug] prices may increase,” BGMA director general Warwick Smith said.

The increase in drug prices that contractors are experiencing is an example of the market showing its “flexibility” by reacting to “shocks and unexpected pressures”, he said.

“But it is clearly right to put quality and patient safety first while any issues are dealt with,” he added.

“Other manufacturers have been able to increase production of the affected products, and the DH will be able to recommend alternative treatments where it is not possible,” Mr Smith explained.

A DH spokesperson confirmed to C+D that the government is “working closely with the pharmacy sector to explore options to mitigate” the problems caused by generics supply and pricing issues.

“We recognise the concerns raised by pharmacists around cashflow,” the DH added.

Read how one contractor expects to lose up to £2,500 a month if generics shortages continue here.