Xrayser: Are city traders behind NHS concessionary prices?

"Just because you’re a health professional, you seem to think everyone has to play by your rules"

Xrayser asks a City Trader why he now trades in medicines, not precious metals

I think I understand the law of supply and demand. It’s why the price of gold is higher than that of plastic, even though the latter is infinitely more practical, and why the increasing output of pharmacy students has pushed down locum rates.

But what about artificial shortages created to drive up the price of commodities? The city traders understand how money can be made this way, so will bet on the price of a commodity such as coffee when the harvest is poor. And it’s the same with drugs.

Today I’m with Alex. Alex has been a trader for City of London stockbrokers Bellends since the late 1990s. He used to trade commodities like oil and wheat, but now Alex says the real money is in pharmaceuticals. I ask him to explain.

“I used to think the big bucks were to be made in oil or precious metals, until a pharmacist friend explained the pricing of prescription drugs. It seemed to me too good to be true – that manufacturers and wholesalers can set their own prices and the NHS will just pay it. Soon it was obvious how to make money from this.

“First you take a perfectly ordinary run-of-the-mill drug like sumatriptan – one that’s out of patent, but hasn’t saturated the market. Then when your next consignment enters the UK, you don’t unload it. You just leave it sat on board the ship where, technically, it’s not passed customs – so is not actually ‘in the country’ – and wait for the price concession to kick in.

“As soon as it does, you immediately ring round the wholesalers and offer it at 10 times the normal price. They in turn offer it to the poor old chemists at 10 times your inflated price, and the good old NHS ends up paying £50 for something that last month was 50p.”

Surely this is unethical, I ask him. A quizzical look comes over his face that says he doesn’t understand the question.

“Just because you’re a health professional, old boy, you seem to think that everyone has to play by your rules. There’s no code of ethics governing business, so you do what is either legal, or close enough to legal that challenging it is impractical.

“The trick is to keep the profit just below the level at which it’s worth diverting the government’s attention – which is a pretty high level while there’s Brexit rattling along. You chemists made that mistake a few years ago with your deals on specials, when you got too greedy and made it worth the Department of Health introducing part VIIIB of the drug tariff.”

I go back to my pharmacy and look at the ever-increasing pile of owing scripts and lengthening list of price concessions. “Don’t worry,” I tell my patients. “The concession price of your quetiapine has just exceeded £100, and I think I can hear the phone ringing with a wholesaler announcing they’ve just received stock.”

7 Comments

s8chy P, Pharmacy owner/ Proprietor

Being a pharmacist sucks

Ilove Pharmacy, Non Pharmacist Branch Manager

Indeed. And couple to this is the fact most of the drugs do not work anyway or make you worse. A fanstastic money making racket unless your're a locum/employee pharmacist.

Philip Caton, Community pharmacist

It's like I always say.....follow the money if something isn't making sense. The real scandal is that on the back of this the government bleats that it can't afford pharmacies anymore...when we're the ones who could save them millions. Does the Dept of health ever go to these parasites and say ( perhaps a year or two later) "Oh sorry, we think we've paid you too much - so we'd like some back."? You know what the traders will say!!!!!!! Our remuneration system is broken. DTP discounts should be treated like ZD's and a list with the relevant discounts fed into the NHS computers. It's not good enough to say it's all part and parcel anymore when they've taken the establishment payment, EPS payment, clawed back Cat M and cut us to the bone. Does anyone actually think the current deal is a good one??? I cannot think of any other business that would put up with this.

Ilove Pharmacy, Non Pharmacist Branch Manager

Why would the dept of health ask questions. It's their mates and allies running the racket. When the civil servants and MPs 'retire' where do you think they go to pick up their rewards? It's all a big game and you have to get the money where and when you can. Oh and patient care is at the centre of everythiing they do..........

Chandra Nathwani, Community pharmacist

.....and for the pharmacist at the coal face who gets a script today, 31st July for pregabalin or any of the concession priced drugs....and pays the high price to make sure the patient's treatment continues...finds that if the patient does not collect his medicine before month end, the lower DT price kicks in [August Tariff] or as it happens this new quater starting 1st August a new lower Cat M price is paid.

Now I know the"swings and roundabout"  theory (actually it is a hypothesis as there is no evidence on how Cat M prices are worked out) but with almost all the icing on the cake scraped off from the cut backs in funding, is it not time to ditch the discount claw backs and net price ALL drugs and appliances where the prices are negotiated by the Govt centrally similar to the proprietory brands (PRS system). After all there is no longer any serious "competition" at the wholesaler level anyway. Then we can continue serving patients rather than patients running around all the pharmacies chasing these products, many ultimately end up suffering poor health.

Delectable Skeptic, Community pharmacist

I wonder if they call the processes names like "Deathstar" & "Fatboy" like Enron did back in the day.

Always a fun conversation when you have to explain that someone's private psychiatry script has jumped from £7 to over £100 each item in a month.  Thanks for that, Big Pharma.  Really apprieciate it.

Ben Merriman, Community pharmacist

I thought Bellends was a law firm

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