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HDA Media And Political Bulletin – 6 June 2016

Jeremy Hunt asks competition watchdog to look at drug pricing

4 June 2016, The Guardian, from Press Association

 

The Guardian reports that Health Secretary Jeremy Hunt has called in the Competition Market Authority (CMA) to look at allegations that prices have been vastly increased as the result of a loophole in NHS rules, revealed in an investigation by the Times. If the companies are found to have charged excessive prices, the CMA can impose tough financial penalties. While the health department can’t comment on details of the investigation at this stage, the CMA is carrying five investigations.

 

Generic prescription drugs: Are prices excessive?

3 June 2016, BBC News, Hugh Pym

 

The BBC details the allegations revealed by The Times investigation that a small number of businesses have made big profits from increasing the prices for generic prescription drugs. The pricing revelations were condemned by the ABPI in a statement by Dr Richard Torbett, who called for official intervention. An NHS England spokesperson stated:  “We are concerned about these type of anomalies at a time when the NHS needs to make significant savings which suggests further regulatory action may be needed.”

 

The full statement issued by the ABPI is available here.

 

Qualification of customers, what wholesalers need to know

3 June 2016, MHRA Blog, Tony Orme

 

Equally important to ensuring that medicines are only obtained from qualified suppliers, distributors should ensure that only wholesalers or persons entitled to supply or administer medicines receive medicinal products. The MHRA emphasised this role as particularly important when supplying medicines with a potential for misuse.

Parliamentary Coverage

 

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Full Coverage

Jeremy Hunt asks competition watchdog to look at drug pricing

4 June 2016, The Guardian, from Press Association

 

The health secretary, Jeremy Hunt, has asked the competition watchdog to look at claims that drug companies are exploiting the NHS to raise the price of medicines.

 

 

Hunt called in the Competition and Markets Authority (CMA) after an investigation by the Times suggested that prices have been vastly increased as the result of a loophole in NHS rules.

 

A health department spokesman 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.”

 

The Times investigation suggests suppliers are able to introduce “extortionate” price rises by dropping the brand name and taking the medicines outside NHS profit controls. The Times says the companies face limited competition on long-established, off-patent drugs, which they bought from large pharmaceutical companies. They allege that wholesalers and their customers also receive a cut and that the prices of 32 drugs have risen by more than 1,000% in the past five years.

 

The CMA can impose tough financial penalties on a company that is found to have charged excessive prices. The health department can recover losses through the courts.

 

The health department spokesman said the CMA is carrying out five investigations relating to suspected anti-competitive practices in the pharmaceutical and healthcare sector. He said he could not comment on details on the investigations at this stage.

 

Generic prescription drugs: Are prices excessive?

3 June 2016, BBC News, Hugh Pym

 

At a time when the NHS is trying to save every penny without undermining patient care, news has emerged that it is being over-charged in one area of its drugs bill.

 

This has led the trade body for major pharmaceutical companies, the Association of the British Pharmaceutical Industry (ABPI), to condemn price rises by some small operators for prescription drugs as “cynical and exploitative”.

 

So what’s the problem and could more than £250m a year be saved?

 

An investigation by the Times newspaper has revealed that a small number of businesses have made big profits after hiking prices for generic prescription drugs, including some anti-depressants and skin medications.

 

There is a deal between the government and major pharmaceutical companies to cap the annual cost of branded drugs still protected by patent. But no such arrangement exists for generic medicines.

 

There seems to be a particular problem for some older generic drugs when distribution rights have been bought by smaller companies from the pharmaceutical giants.

 

These cases usually involve low sales volumes and rival companies deciding it’s not worth entering the market. The theory is that when a drug “goes generic” there will be competition which drives down prices. But in these situations there is a monopoly.

 

Given that NHS tariffs (the prices which pharmacists pay for their supplies before getting reimbursed) are set by average market prices for each drug, the suppliers call the shots and the health service has to accept whatever is charged.

 

Market concerns

 

The Times investigation revealed an increase for one drug of 12,500% in five years and, for 32 others, a 1,000% rise.

The newspaper estimated this had added £262m to the annual NHS drugs bill. One industry source described it as market failure and told me it was clear there was a loophole which ought to be closed.

 

The ABPI condemned the pricing revelations, making clear the companies involved were not members and the examples quoted in the report were rare.

 

The association’s Dr Richard Torbett said official intervention was required.

 

“The government can step in and question pricing decisions and, through the Competition and Markets Authority, has wide powers to regulate and deal with market abuses.

 

“The ABPI supports this and is in discussion with government about how best to ensure appropriate pricing throughout the system.”

 

NHS England, while acknowledging that in general the system delivers value for money, is clearly anxious for action to be taken by the government.

 

A spokesman said: “We are concerned about these type of anomalies at a time when the NHS needs to make significant savings which suggests further regulatory action may be needed.”

 

‘Urgent’ scrutiny

 

Ministers are aware of the problem and seem keen that the Competition and Markets Authority takes whatever action is needed.

 

A Department of Health spokesman 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.”

The intent is there. The government and NHS leaders want any loophole allowing excessive charging to be closed.

 

But how quickly it can happen, allowing for due process involved with CMA investigations, is another matter.

 

Any delay will cost the health service millions of pounds more at a time when it needs as much cash as possible for frontline care.

 

Qualification of customers, what wholesalers need to know

3 June 2016, MHRA Blog, Tony Orme

 

In my last post I talked about the importance of ensuring medicines are only obtained from qualified suppliers. Equally important is the obligation distributors have in ensuring that only wholesalers or persons entitled to supply or administer medicines receive medicinal products. Wholesalers have a key role in guaranteeing medicines are only supplied to authorised organisations and qualified prescribers. This role is particularly important when supplying medicines with a potential for misuse.

 

Counterfeit-medicines

 

The MHRA has become aware that certain medicines subject to abuse, commonly diazepam, nitrazepam, zopiclone, tramadol and zolipdem have been leaking from the regulated supply chain and made available for sale in the black market and on illegal websites. These products are Schedule 4 controlled drugs under the Misuse of Drugs Act. Significant amounts of genuine licensed packs of these products from various manufacturers have been seized and recovered throughout the UK and Ireland.

 

Wholesalers are reminded that they have an obligation in GDP to monitor their transactions and investigate any irregularity in the sales patterns of narcotics, psychotropic or other dangerous substances. Unusual sales patterns that may constitute diversion or misuse of medicinal product should be investigated and reported to competent authorities where necessary.

 

In relation to wholesale distribution of scheduled controlled medicines to other wholesalers, companies must check their customers hold both a wholesale dealer’s licence and a Home Office controlled drugs licence of the appropriate schedule.

 

For distribution to a wholesale customer, the checks that should be made are similar to the qualification of suppliers outlined in my previous blog. A hard copy of the CD licence must be obtained from your customers prior to any supply being made.

 

For supplies to pharmacies, hospitals and clinics these organisations are not required to have a Home Office licence as their supplies are for patients. It is particularly important that the usage pattern is considered when fulfilling orders. We have seen pharmacies ordering up to a 2000 packs of these products monthly. That size of order is highly unusual for a retail pharmacy that does not hold a Home Office Licence. There should be procedure in place that sets defined limits to the size of routine orders that can be placed by customers that alert the company Responsible Person to investigate if excessive amounts are ordered.

 

If you have concerns about your customers ordering of controlled or other drugs, in the first instance email the GDP Inspectorate. Please include details of the company and the name and quantities of products that have been ordered in the last 6 months. This will be dealt with in confidence.

 

Other issues that arise in relation to customer supplies include medical practitioners who request supplies to their home address. The GMC medical register does not include the address of registered doctors so companies should avoid sending products to home addresses. Doctors operating in the independent sector will be working from clinics registered with the CQC in England, Healthcare Inspectorate in Wales, Healthcare Improvement in Scotland and The Regulation and Quality Improvement Authority in Northern Ireland. Medicines should usually be dispatched to these verifiable addresses rather than residential properties. For example in one case ex-employees of a slimming clinic used a doctor’s GMC registration, without their knowledge to set up accounts with deliveries to their home address.

 

For wholesale distributors exporting medicinal products to persons in third countries, they must ensure that such supplies are only made to persons who are authorised or entitled to receive medicinal products for wholesale distribution or supply to the public in accordance with the applicable legal and administrative provisions of the country concerned. As an example we see companies attempting to export products such as Botox to doctors and clinics in the USA. The U.S. FDA only permits health care providers to obtain and use only FDA approved medications purchased directly from the manufacturer or from wholesale distributors licensed in the U.S. In certain circumstances, the FDA may authorize limited importation of medications that are in short supply. Such medications are imported from approved international sources and distributed in the U.S. through a controlled network, and would not be sold in direct-to-clinic solicitations. UK licensed versions of FDA approved drugs are not treated by FDA as equivalent and must not be sold into the U.S. to doctors or clinics.

 

Finally, please be aware of any unusual orders that may come in from an export customer. Recently reported was an attempted large order of diazepam placed from a pharmacy in Africa. The purchase order was paid by a UK company purportedly acting on behalf of the pharmacy. They sent an individual in a van to the supplier, but with no paperwork to collect the products. The distributor was rightly suspicious and refused to hand over the products and reported the matter to us.

 

Like the qualification of suppliers it is important that there is periodic rechecking of the authority to receive medicines for your customers and such checks must be documented.

HDA Media And Political Bulletin – 6 June 2016

From Factory to Pharmacy

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