Generic medicines pricing issues: National Audit Office publishes findings

Generic medicines pricing issues: National Audit Office publishes findings

June 8, 2018

The National Audit Office (NAO) has today published the findings of an investigation into NHS spending on generic medicines in primary care.

The NAO was investigating the unexpected increase in prices of certain medicines purchased to fulfil NHS prescriptions seen last year, which caused much additional work and worry for community pharmacy contractors, with purchase prices for medicines often varying widely.

PSNC fed into the NAO investigation, including highlighting concerns about the impact of price increases on the community pharmacy sector.

The NAO found that there had been a seven-fold increase between the net spend on price concessions in 2017/18 compared with the previous year, and that this had put pressure on CCG budgets.

The report also noted that feedback on generic medicine supply issues rose significantly from fewer than 150 contacts per month before May 2017 to a peak of more than 3,000 in November 2017. The Department of Health and Social Care (DHSC) has granted nine out of 10 requests from PSNC on average.

The NAO suggests that DHSC has struggled to determine the reasons behind the price increases.

Other key findings included that:

  • The NHS spent an estimated £3.5 billion on generic medicines in primary care for 2016/17;
  • DHSC has identified three main factors that may have caused the price increases but cannot fully verify or quantify these; and
  • DHSC took action to maintain the supply of those generic medicines on concessionary prices for patients.

The NAO also noted that the DHSC is due to receive new powers to control the price of generic medicines, effective from July 2018.

Read the NAO report

PSNC Chief Executive Simon Dukes said:

“PSNC was pleased to assist the National Audit Office in investigating the unprecedented situation in the generic medicines supply chain seen last year.

Community pharmacy teams were caught in the middle of the many factors at play, working extremely hard to obtain medicines as quickly as possible for the patients who needed them.

PSNC welcomes the moves towards developing a more refined price setting system; this must enable pharmacies to continue to purchase generic medicines effectively on behalf of the NHS for the benefit of patients.”


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