Drug producers defend prices

27 Apr 00
Generic drugs manufacturers this week hit back at government allegations that they were 'ripping off' the NHS. Prices rose by a third between April and December last year while the number of generics in short supply also increased.

28 April 2000

Health minister Lord Hunt announced proposals to end the 'rip-off' by cutting the cost of non-brand name medicines and discouraging pharmacists from dispensing named drugs.

But the British Generic Manufacturers Association claimed British generics were the cheapest in Europe and that without them the health service's £7bn annual drugs bill would be £2bn greater. It said prices fell by 25% in real terms between 1994 and 1998 and denied claims that manufacturers were controlling supplies.

'Against that background comments about being "ripped off" simply do not stack up,' added Warwick Smith, the association's director.

The Department of Health's move is the latest attempt to control the spiralling generic drugs bill, which threatens the finances of primary care commissioning groups and primary care trusts. Some face six-figure deficits in their prescribing budgets.

Last year the department and the pharmaceutical industry agreed a revised Pharmaceutical Price Regulation Scheme (PPRS) which will slash £200m from the cost of medicines. Generics were excluded from the PPRS in the early 1990s in an attempt to increase their availability and use.

Under the new proposals, generic prices will be reduced to their level of 15 months ago, which will save £200m, while the Category D scheme, which reimburses chemists at a higher rate if they dispense brand names when generics are unavailable, will be scrapped.

Health authorities believe the scheme could cost £60m a year because of shortages of some generics. The proposals have been put out for consultation and the prices will be reviewed in 15 months.

The move was welcomed by managers and doctors. 'Generic drugs account for about 60% of the volume of primary care prescribing so this announcement will have considerable implications,' said Tim Jones, policy manager for the NHS Confederation.

British Medical Association spokesman Dr George Rae said the proposals were good news for patients. 'Last year GPs were faced with soaring increases in the cost of generic drugs. We don't want to be in that position again.'


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