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HDA Media And Political Bulletin – 15 June 2016

UNCLEAR IF GOVERNMENT WILL CLOSE NHS DRUG PRICE LOOPHOLE

14 June 2016, Pharmacy Biz, Neil Trainis

 

Pharmacy Biz details whether the Government has the ability and willingness to prevent future price rises, after allegations were revealed that several pharmaceutical companies are taking advantage of loopholes to increase the drug prices. It highlights the contrast between the excessive drug pricing practicing revealed and the community pharmacy battle with the Government over cuts to its funding. Sir Kevin Barron, chair of the All Party Pharmacy Group, commented explaining that “the group supports healthy competition in the market for generic medicines as the best way to keep prices down”. A PSNC spokesperson added that the issue of price increases had been brought up to the Department of Health on several occasions but the Department had not acted on the Association’s recommendations.

 

 

Parliamentary Coverage

House of Commons Questions, Pharmacy, 14 June 2016

 

Sue Hayman, MP: Whether his Department plans to respond to the counter-proposal to the Government’s plans for community pharmacy published by the Pharmaceutical Services Negotiating Committee in April 2016.

 

Department of Health

 

Alistair Burt, MP: We have been developing our proposals for community pharmacy in 2016/17 and beyond in discussion with the Pharmaceutical Services Negotiating Committee (PSNC) and other stakeholders. We welcomed the publication of the PSNC’s counter proposal which is being considered as part of the consultation process. Our aim is to communicate our final decisions early in July.

 

Full Coverage

UNCLEAR IF GOVERNMENT WILL CLOSE NHS DRUG PRICE LOOPHOLE

14 June 2016, Pharmacy Biz, Neil Trainis

 

The Department of Health has insisted that no pharmaceutical companies “should be exploiting the NHS” following allegations that millionaire entrepreneurs are taking advantage of a loophole to increase the price of drugs by as much as 12,500%, although question marks remain over the government’s ability and willingness to prevent future price rises.

 

A sense of outrage has broken out following an investigation by the Times newspaper claiming that wealthy businessmen have increased the price of drugs to the NHS on huge levels at a time when the health service is searching for billions of pounds in efficiency savings. That was £20 billion by 2021 at the last count.

 

Price rises of the sort which have seen the antidepressant doxepin 50mg tablets leap from £5.71 to £154 per packet over the last five years are not unlawful since a loophole allows companies to impose huge increases if they drop the brand name of a product and sell it under its generic name.

 

Thirty-two medicines have increased in price by over 1,000% since 2011 and the cost of another 196 has doubled.

 

Allegations of drug price profiteering have been aimed at pharmacy entrepreneurs by the Times investigation, including brothers Bhikhu and Vijay Patel, who have amassed a £625 million fortune according to the Asian Rich List.

 

Three years ago they set up a company called Atnahs which they used to exploit the pricing loophole and their previous company, Amdipharm, also took advantage of that system. Amdipharm and Mercury Pharma, another company implicated, have since been taken over and merged in 2012 to form AMCo.

 

The Competition and Markets Authority (CMA) has started an investigation into potential abuse of generics pricing and has powers to impose penalties of up to 10% of a company’s global turnover if it finds breaches of competition law.

 

However, it is unclear whether the companies mentioned are being investigated by the CMA. Atnahs have refused to comment on the allegations.

 

Although it is not illegal to genericise a drug, companies exploiting the drug pricing loophole could still be found guilty of excessive or unfair prices under competition law.

 

Despite not being unlawful, exploitation of the loophole has profound moral implications and the pharmacy profession has been quick to express its concerns over drug price profiteering as community pharmacies continue to fret about going out of business in the wake of swingeing government cuts to its funding.

 

Graham Phillips, the owner of Manor Pharmacy Group and former English Pharmacy Board member, tweeted: “Why is @nhsengland closing 3000 local pharmacies instead of focusing on this?”

 

He went on to tell Pharmacy Business: “Competition authorities should investigate and no, (the) government won’t act unless prodded. This would be a good one for Michael Dugher (the Labour MP) to pick up.”

 

Pupinder Ghatora, a community pharmacist based in Oxfordshire, said: “This situation has been going on for years. I was on BBC Oxford last week explaining the loophole and the listeners were disgusted.

 

“These companies fly under the radar and continue to milk the NHS of millions and laugh at the stupidity of the DoH.

 

“When retail pharmacy is facing closure due to the absolutely devastating cuts, it is completely unethical and morally disgusting that these pharmaceutical companies have made millions upon millions of pounds by ripping off the NHS.

 

“This is pure money-making for pharma companies. This loophole and all others need to be closed. The whole pharmacy system is greedy. The government should procure medicine themselves and deal with the pharmaceutical companies instead of relying on our skills as businessmen and women in negotiating.

 

“We do all the hard work and still get kicked whilst we are down. Let the DoH procure and worry about the costs and pay us for our clinical work. This is pie in the sky and will never happen in my lifetime.

 

“Put me in front of the DoH and I will explain explicitly how they are destroying pharmacy and the NHS.”

 

Sir Kevin Barron, chair of the All Party Pharmacy Group, told Pharmacy Business: “The All Party Pharmacy Group supports healthy competition in the market for generic medicines as the best way to keep prices down.

 

“Where competition does not exist, companies must not exploit the situation through extreme and unjustifiable price rises. The Group will take a close interest in the Competition and Markets Authority inquiry and will not hesitate to investigate any issues left outstanding.

 

“In the meantime, the NHS should ask pharmacists to work with prescribers to propose alternatives to the affected products wherever possible.”

 

Neal Patel, head of corporate communications at the Royal Pharmaceutical Society, said: “We would expect a thorough and detailed (CMA) review that makes sure the NHS gets best value from medicines and that patients have access to the medicines they need.”

 

A spokesperson at the PSNC said: “PSNC has been concerned about medicines price rises and we have highlighted the additional costs to the Department of Health on numerous occasions. The Department has not responded to this information or acted on our recommendations.

 

“The medicines involved in these schemes are generics so they do not fall under the PPRS (Pharmaceutical Price Regulation Scheme). Neither are they a source of significant profit for community pharmacy. We believe they do increase the drugs bill by more than £250 million.”

 

When asked if the Patel brothers should be made to pay back to the NHS some of the money they have made from huge profits on medicines, Neal Patel said: “I think we would wait for the outcome of the CMA review before commenting on that.”

 

The Department of Health did not comment when asked whether the government was able and willing to close the loophole, given that generics save the NHS more than £11 billion a year, but a spokesperson said: “These are serious allegations and no pharmaceutical company should be exploiting the NHS.

 

“The Secretary of State has asked the CMA to urgently look at the evidence uncovered by the Times as part of their continuing investigations into excessive drugs pricing.”

HDA Media And Political Bulletin – 15 June 2016

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