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Specials manufacturers raise concerns about cost cutting

Practice Fraud allegations could be fuelling further cuts to specials funding by CCGs, APSM survey finds

Specials manufacturers have voiced fears that fraud allegations could be fuelling further cuts to NHS spend and specials.  

The Telegraph exposé of underhand rebates had created an "unwelcome ripple through the sector" that had made many local medicines management teams wary of specials at a time when confidence and trust in the drugs had been returning, the Association of Pharmaceutical Specials Manufacturers (APSM) told C+D this month (October 7).  

The article, published in June, accused pharmacists of colluding with specials manufacturers to bill the NHS for a higher price than that paid for the drugs. This undermined some of the trust in specials created by the introduction of fixed prices for the most commonly prescribed specials in November 2011, the APSM said. 


The Telegraph exposé had created an "unwelcome ripple through the sector", the APSM said

More on specials

GPhC pledges to investigate Telegraph specials fraud exposé

Pharmacists split in response to Telegraph specials fraud exposé

Pricing authority should be vigilant for signs of specials fraud, PSNC says

Last month, the APSM published the results of its June survey, which found half of the 200 pharmacists who responded had been asked by clinical commissioning groups (CCGs) to monitor or reduce their specials dispensing. A quarter of respondents had been asked to reduce spend on specials, compared with 13 per cent in 2012.


The APSM said it was "taking a while" for prescribers to understand the impact of the specials tariff and said the fraud revelations could cause further problems.  

"Any further cost savings to be squeezed out of specials will have a minimal financial impact as the volumes are so small but could potentially have a much more significant impact on quality and patient safety," the association stressed. The NHS calculates that the specials tariff has reduced overall specials costs by 25 per cent since its introduction.  

PSNC told C+D specials were likely to be squeezed further as the NHS faced "unprecedented financial challenges" and many CCGs were exceeding their budgets.  

"PSNC has been making very clear to the NHS that CCGs must not use their new powers to manipulate delivery of community pharmacy funding, but in this sort of climate it would not be a surprise to see CCGs considering a range of options to cut costs," said Komal George, head of support services at PSNC.  

NHS England said ensuring patients received appropriate and effective treatment was the main priority for CCGs. "It is, however, absolutely right that we do this while ensuring we get the best value for the taxpayer," a spokesperson told C+D.  

Specials account for less than 1 per cent of all prescriptions, 96 per cent of spend is accounted for by the top 500 specials and, of these, more than a third are included in the tariff, the APSM said.



Have you come under pressure from your CCG to monitor or reduce your specials spending?

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9 Comments

Janet Woodward, Senior Management

Gluten free products also come under the banner of "specials".
In some areas of the country..its easier to BAN totally some products...thus reducing choices for the end users.

Have been told...to place products in wholesalers...to reduce costs. OK a good idea in theory..but we have done that with a wholesaler who I wont identify..and they just couldnt cope. It resulted in writing off a LOT of stock..poor service to end users.

How would you good folks resolve this one??
Keep up the good work...

Mark Byrne, Other healthcare professional

I work for an NHS organisation, we don’t judge and accept that ‘practices’ have been in place many years and are an accepted extra income stream for some pharmacies. A bit like the MP expenses fiasco – normal day to day procedure until held up to scrutiny and whether the general public would see at as rational. I believe that the cost of the forensic financial audit is the only reason certain discount structures have not been taken to court – finding how and where the credit / extra stock / payments went to tie both the original sale and rebate together.

What we have done is work with PCT’s and now CCGs (including members of the SFO) to inform pharmacies in the primary care marketplace that we have batch made Specials manufactured by NHS manufacturing facilities as well as from quality commercial manufacturers and marketers that are likely to be cost effective against alternative supply. If they happen to be cheapest and in tariff then it will be of more interest to pharmacists – but for us bringing down the cost of Specials and unlicensed imports allows more NHS funds to go towards real patient face to face care.

Our stocked items are often a 10th of the average price reimbursed by CCG’s and that hurts. Once upon a time it was Midazolm in PCT’s reimbursement lists at £700 a time but the excessive cost product change every quarter. There is no reason why costs vary as much as they do outside of the legacy reimbursement practices and these are already highlighted in every region and being investigated in the background in some way or other.

I see this as a closing window and the last few could be prosecuted as a matter of principle in milking the last available excesses from the NHS.

Paul Summerfield, Community pharmacist

What you need to do is stop all of the "discounts" that can be applied via alternative routes. For example, you order a special that costs £1000 and the "specials" manufacturer gives you a discount of 40%. However, instead of applying that discount directly to the Px, the pharmacy claims the amount from a funding vehicle that the "specials" manufacturer has set up. Even worse are the contractors who use the highest priced manufacturer without looking around. That, by not a huge leap, is fraud under s.2 Fraud Act 2006.

I have worked around enough for the last 16 years to know about the "back doors" and have given a number of presentations to NHS CFS (now NHS Protect) in which this type of activity has been discussed.

Rajive Patel, Community pharmacist

I agree that legally, if you are not showing your discounts, then this is fraud. However Paul's reference to s.2 Fraud Act 2006, although noble, is very difficult to prove and somewhat scaremongering. If it is indeed the case, then where are the convictions?

The fact is these Specials companies are very well resourced and you can bet they will only offer schemes on the basis of LEGALITY. NHS Protect have been trying for years to come down on Specials, but there is a reason why there are no convictions, would'nt you say?

This whole practice is akin to Tax Avoidance, morally wrong but legally sound. Fact.

Paul Summerfield, Community pharmacist

The argument surrounding a s.2 FA 2006 offence is almost a no brainer.

It does not take too much to link the physical actions and the mindset to fall squarely within this section. I cannot comment on why there have been no prosecutions but from speaking to NHS Protect on a number of occasions about this topic, some of the officers are in agreement that it falls within s2. If you want scaremongering - look at the friendly banter of locumvoice.

However Raj., if you want to set out how you feel that a s2 offence is very difficult to prove, I am all ears. I'll open a thread on LV and we can thrash it out :)

Rajive Patel, Community pharmacist

OK Paul, how do you gather evidence to prove, beyond all doubt, that a pharmacist has deliberately chosen the highest price manufacturer of a special? Please explain.

Furthermore, Specials are outside the scope of the CCG's and fall within the scope of the NHS Pharmaceutical Services Contract. Here, a pharmacist can choose any supplier based on commercial needs. For example, Supplier A offers Product X at £100 but offers a 120 day credit term; Supplier B offers the Same Product X at £90 but offers no credit. Almost all contractors will go for supplier B. Now this is assuming Product X is exactly exhibits the same product characteristics from each of the suppliers. This is difficult to prove since the product is inessence unlicensed and will not have a registered SmPC.

Paul Summerfield, Community pharmacist

Raj, I have opened a thread on LV - I look forward to the fencing. On guard :)

Rajive Patel, Community pharmacist

I really do think the "cancer" of profiteering from specials has taken place because of weak policy and legislation. In addition poorly thought out contracts. It is so similar to current issues like Tax Avoidance etc.

My belief is that socialism does not mix with a corporatist society. Where you mix social vehicles with corporate bodies. The Social Vehicle strives for social enhancement, the corporate bodies/providers strive for commercial profits and gains. The NHS and Private Enterprise CAN NEVER work together.

Rajive Patel, Community pharmacist

Furthermore, the NHS asks pharmacists to follow the spirit of fair NHS funding and sharing responsibility. But where is the NHS, when they make pharmacists dispense for a loss? Specials is not the issue, the fact is that Pharmacists are not tied into the vision or objectives of the NHS, because of the simple fact that pharmacies are commercial enterprises and the NHS is a socialist model.

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