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DH's drug price-cap powers will prioritise fair pharmacy reimbursement

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Baroness Manzoor: Some suppliers have increased their prices to unwarranted levels
Baroness Manzoor: Some suppliers have increased their prices to unwarranted levels

The government will use its medicines price-capping powers to ensure pharmacies are reimbursed fairly as a "priority", it has told C+D.

The Department of Health and Social Care (DH) was granted powers in July 2017 to impose changes to medicine prices when it thinks “inappropriate pricing may be occurring”.

It is currently preparing a formal consultation with “relevant industry bodies” before finally implementing the price-setting powers.

“Our priority is to ensure that all patients continue to get their medicine, and that community pharmacies are reimbursed fairly for the products they dispense,” the DH told C+D when discussing these powers on Tuesday (March 12).

"Isolated cases" of price hiking

There are “isolated cases” of generics price hiking, which “appears to be where there is no competition, or competition isn’t working well and some suppliers have increased their prices to what appear to be unwarranted levels”, government spokesperson Baroness Manzoor said last month.

“We do not control prices of generic medicines, but rely on competition to drive prices down,” she added. “This normally works well and has led to some of the lowest prices in Europe.”

Price concessions do not mean shortages

Price fluctuations across Europe can lead to concessionary prices, the DH explained. However, price concessions do not necessarily mean those products are in short supply, it stressed.

In June 2018, a National Audit Office report into the “unexpected increase” in generics prices in 2017 referred to government evidence of “unexpected increases in wholesalers’ margins”, which the DH could not fully explain.

6 Comments
Question: 
What action would you like to see taken to tackle generics price rises?

Ben Merriman, Community pharmacist

I agree with all these points but I'm afraid they don't relate to the point Baroness Manzoor is making. 

The products affected here are the like of liothyronine, fusidic acid eye drops, hydrocortisone tablets, alimemazine and trimipramine.  Health Service Medical Supplies (Costs) Act 2017 was passed to allow state intervention when the lack of competition in the market (allegedly) leads to hikes in price of a medicine as has been seen with these medicines.  Comapnies such as Chemidex, Advanz (formerly Concordia, Focus, AmdiPharm, and AmCo) and Atnahs (inc. Waymade and Marlborough) have (seemingly) made an awful lot of money by using loopholes meaning the price of a generic medicine is essentially uncontrolled, leading to price hikes of thousands of percent.

As far as the current generics market, category M and price concessions, it's pretty obvious to me that the current market is broken; ith no more blockbuster drugs like Lyrica, Viagra or Lipitor to reduce medicines costs, the current system is no longer fit fo0r purpose.  The savings expected in the market is now being made by not paying (because it's not reimbursement some of the time) contractors properly for medicines they are obliged to supply to patients.  It does appear that some wholesalers treat medicines like shares and can buy and sell depending upon the current market.

Reeyah H, Community pharmacist

We have spent the last year making massive losses, with obvious fiddling by the wholesalers. We have had 10-15 million then taken away on top paying hiked prices. If the DoH can take money back from us, they need to look at paying us back now.

Paul Dishman, Pharmaceutical Adviser

It’s obvious that the wholesalers have hoarding stock to drive prices up and equal ly obvious the government is quite happy to let pharmacies go to the wall. This is just BS Baroness Manzoor

ComPharm Pharmacist, Superintendent Pharmacist

The concessionary prices do not match the market prices and it seems that DoH has taken the easier route of capping the prices at the pharmacy level rather than the source be it wholesaler or manufacturer of generics.There is alleged price fixing going on at these levels for good few years and its increasing year on year in fact "The Times" has reported on this matter several times but DoH is unable or unwilling to take this head on because they have an easier target. 

Amjad Khan, Senior Management

Risedronate 35mg (4) was in the pennies 2day ago, I bought just about bought some for 75p (normally is below 30p) Yesterday mysteriously out of stock everywhere. Today the price is £38 at Colorama - who are always first to test the waters with phenomenal price hikes in the hope others will follow. And AAH at £18, when they were 30p the day before yday. Its clear to see what's happening.

Tony Schofield, Community pharmacist

In June 2018, a National Audit Office report into the “unexpected increase” in generics prices in 2017 referred to government evidence of “unexpected increases in wholesalers’ margins”, which the DH could not fully explain.....????? Shortages, increased prices but increased profits by wholesale and they claim not to be able to work it out? Perhaps the wholesale sector would like to explain why some medicines become scarce or unavailable then magically reappear at stratospheric prices but with short expiry dates? Have they just been released from manufacture or from hoarding? The question as to what should be done is interesting. How about clawing back overspend from wholesalers rather than pharmacies?

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