News

HDA UK Media and Political Bulletin – 12 November 2021

Media Coverage

Government not helping wholesalers with labour shortages, warns HDA
P3 Pharmacy, Neil Trainis, 10 November 2021

P3 Pharmacy reports on HDA Executive Director, Martin Sawer’s interview with Independent Community Pharmacists where he warned that the pharmacy wholesale sector is enduring a labour shortage that could worsen if the Government does not step in.

He said: “Our members are doing a remarkable job but I don’t want them to get exhausted and the cracks start to show because every company has a business continuity plan. The whole network works because it can deal with a crises and issues but if it goes on for years and years, that’s not a good thing”, and called for structural solutions to the problem.

DHSC ‘parks’ decision on hub and spoke dispensing
Dispensing Doctors’ Association, Ailsa Colquhoun, 12 November 2021

The Dispensing Doctors’ Association reports that after more than five years, the Department of Health and Social Care (DHSC) has ‘parked’ the issue of hub and spoke dispensing. The DHSC has said that further consultation on hub and spoke dispensing is necessary to define the responsibility between the hub and the spoke and mitigate for errors with increased steps, and for duplication or costs.

No timetable has been set for the new consultations.

UK government presses ahead with generics reimbursement reforms, despite shortage fears
The Pharmaceutical Journal, Carolyn Wickware, 11 November 2021

The Pharmaceutical Journal reports that the UK Government is to take forward plans to allow community pharmacies in England to make more of a profit on generics where there is no low-cost brand alternative. This is to prevent community pharmacies losing out when clinical commissioning groups (CCGs) and GPs specifically prescribe branded products owing to their lower cost. However, industry bodies have warned that this plan could lead to constraints on supply if improperly implemented.

The DHSC suggested that the problem could be solved by adding “less medicine margin to those generic medicines for which branded equivalents are available and that are priced below the generic medicine, and as a consequence add more medicine margin on all other category M medicines”.

A spokesperson for the British Generic Manufacturers Association said it is: “broadly supportive of the main principle laid out in this consultation”. They continued: “There is, however, a need to ensure the implementation is appropriate and does not cause unintended consequences. For example, looking at the proposals to reduce the Category M reimbursement price for unbranded generics where an equivalent branded medicine is priced lower, it will be important that the changes do not lead to unbranded generic prices being pushed too low and that this leads to market exits.”

This was also reported in The Chemist+Druggist.

Parliamentary Coverage

There was no parliamentary coverage today. 


Full Coverage

Government not helping wholesalers with labour shortages, warns HDA
P3 Pharmacy, Neil Trainis, 10 November 2021

Exclusive: Healthcare Distribution Association executive director Martin Sawer has warned the pharmacy wholesale sector is enduring a labour shortage that could worsen if the Government does not step in.

In an exclusive interview with Independent Community Pharmacist, Mr Sawer (pictured) said that while the current situation has not reached crisis point “the whole system is under strain,” deepening concerns over potential disruptions to the supply of medicines to pharmacies.

He said that without government support, which he claimed has not materialised so far, there was reason to worry about the “long-term structure of supply in the next 12 months”.

He revealed workforce shortages have resulted in some wholesalers using warehouse employees to drive forklifts and office staff to work in the warehouse but said that despite this “the system is still working”.

“There have been warnings to the pharmacy sector that some medicines may have to be prioritised because of the fuel problem or because of labour shortages,” he said.

“We’ve made strong representations to Government to give us a bit of a break, whether it’s to be more flexible on the apprenticeship scheme, be more flexible on access to drivers and nothing yet has happened.

“There have been no initiatives from Government that have been of any benefit. We are still concerned about the long-term structure of supply in the next 12 months or so unless things change or improve.

“Our members are doing a remarkable job but I don’t want them to get exhausted and the cracks start to show because every company has a business continuity plan. The whole network works because it can deal with a crises and issues but if it goes on for years and years, that’s not a good thing.”

‘Structural’ solutions needed

Mr Sawer said the wholesalers represented by the HDA have “very strong, robust business continuity plans” but urged the government to come up with “something more structural to improve economically with the labour force”.

“That is the way to do business when you’re dealing with medicines, you have plan Bs and never mind plan B, you’ve got plan C and D. So we’re not always on plan A. Office staff are sometimes in the warehouse, warehouse staff are sometimes driving and it’s OK at the moment,” he said.

“Pharmacies have access to hopefully more than one wholesaler so they can have some flexibility and that’s the in-built flexibility and resilience of the system. What I’m saying is we need something more structural to improve economically with the labour force.”

Demand for labour rising

Mr Sawer told ICP that the “critical work” of wholesale workers should be prioritised, adding that there has been “much more demand for warehouse staff” as the economy “goes much more online”.

He said he was encouraged by the government’s appointment of former Tesco CEO Sir David Lewis as its supply chain adviser until the end of the year but warned that swift action is needed.

“I wouldn’t use [the] word [crisis]. It’s not a crisis because we’ve coped. The fuel shortage was an extreme example and we believe there are ways of mitigating some of these problems and we’ve put some of those ideas to the government,” he said, adding that the HDA has had several meetings with Government officials.

“We’d like to see the Government respond before the situation becomes fixed. We can cope with it at the moment because it’s quite fluid but if the structural problem in the workforce becomes a challenge… we want to have a bit of comfort that the Government gives us some priority.”

DHSC ‘parks’ decision on hub and spoke dispensing
Dispensing Doctors’ Association, Ailsa Colquhoun, 12 November 2021

After more than five years, DHSC has ‘parked’ the issue of hub and spoke dispensing.

In a consultation response published yesterday- five years after the initial consultation – DHSC says that further consultation on hub and spoke dispensing is necessary to define the responsibility between the hub and the spoke and mitigate for errors with increased steps, and for duplication or costs.

The response also commits the DHSC to further consultation on labelling of medicines supplied under PGDs and MDS. However, it has decided against publishing medicines prices on labels.

No timetable has been set for the new consultations.

The original consultation in 2016 set out the following proposals:

  • allow independent pharmacists to make use of ‘hub and spoke’ dispensing models – a ‘hub’ pharmacy dispenses medicines on a large scale, often by making use of automation, preparing and assembling the medicines for regular ‘spoke’ pharmacies that supply the medicines to the patient
  • allow the price of medicines and a statement on how the costs of medicines are met to be published on dispensing labels should this be required for NHS medicines dispensed as part of the NHS pharmaceutical services
  • clarify the current dispensing label requirements for monitored dosage systems and medicines supplied under patient group directions
  • amend the pharmacists’ exemption in section 10 of the Medicines Act, regarding the preparation and assembly of medicines, following a judgment of the Court of Justice of the European Union.

UK government presses ahead with generics reimbursement reforms, despite shortage fears
The Pharmaceutical Journal, Carolyn Wickware, 11 November 2021

The UK government is to take forward its plans to allow community pharmacies in England to make more of a profit on generics where there is no low-cost brand alternative.

The reform is designed to prevent community pharmacies losing out when clinical commissioning groups (CCGs) and GPs specifically prescribe branded products owing to their lower cost.

The proposals, which were first published by the Department of Health and Social Care (DHSC) for consultation in July 2019, suggest adjusting the cost of category M generics for which a low-cost branded version exists, so that community pharmacists recoup less money from these medicines and more money from all other category M medicines.

However, industry bodies have warned that the government’s plan to adjust how much margin is recouped from certain generic medicines could “lead to constraints on supply” if improperly implemented.

Category M drugs are classified as generic medicines that are available from more than one manufacturer and fulfil certain minimum spend or volume requirements.

Under the current system, the DHSC calculates category M prices based on quarterly information provided by all manufacturers and suppliers. The reimbursement prices for community pharmacy include an added margin allowing pharmacy contractors to retain some money on the medicines they dispense.

The medicines margin must total £800m annually under the ‘community pharmacy contractual framework’.

However, some branded generics are priced below the category M reimbursement price for generic versions of the same drug, making them look cheaper to prescribers as category M reimbursements do not apply to branded drugs.

According to the consultation document, this encourages CCGs and GPs “to prescribe the product by brand rather than generically”.

“In addition, where a CCG recommends prescribing the branded product because they see it as a cheaper approach, pharmacy contractors in the CCG’s catchment area do not have fair access to medicine margin as they do not retain medicine margin on brands,” the proposals said.

To address the problem, the DHSC suggested adding “less medicine margin to those generic medicines for which branded equivalents are available and that are priced below the generic medicine, and as a consequence add more medicine margin on all other category M medicines”.

Following 283 responses, of which 170 agreed with the proposals, the DHSC said it “intends to progress this proposal”.

However, it plans to have more detailed discussions with the Pharmaceutical Services Negotiating Committee (PSNC) on “as to what level of medicine margin would be appropriate for branded generic and generic products listed in category M” before implementing the reforms.

The response document added that the DHSC will also discuss “applying a different level of discount deduction to branded and generic products”.

Mike Dent, director of pharmacy funding at the PSNC, said the negotiators have “been part of the discussions around the potential ways to reform reimbursement for several years”.

“The impact on community pharmacy contractors needs to be carefully considered at all stages, and we will be discussing this matter once again at the November PSNC meeting. As per the Department of Health and Social Care’s response, we expect to now begin more detailed work with them on the proposals.”

In its initial response to the consultation, the PSNC warned that the government’s proposals risk “exacerbating problems around drug availability and shortages”, adding that reforms “would need to be made gradually and would need to be carefully monitored to ensure any unintended or detrimental effects are identified”.

A spokesperson for the British Generic Manufacturers Association told The Pharmaceutical Journal that it is “broadly supportive of the main principle laid out in this consultation”.

“There is, however, a need to ensure the implementation is appropriate and does not cause unintended consequences. For example, looking at the proposals to reduce the Category M reimbursement price for unbranded generics where an equivalent branded medicine is priced lower, it will be important that the changes do not lead to unbranded generic prices being pushed too low and that this leads to market exits.

“This is particularly prescient given rising costs for materials, manufacturing, shipping containers and freight. This may lead to constraints on supply, lessen competition and go against the intent of the proposal”.

The government’s impact assessment has said the reforms would impact 33 manufacturers, but “for over three quarters of these, the branded alternatives represent less than 10% of their total marketing authorisations”.

It added that, for only 6% of manufacturers, branded generics make up more than half of their total marketing authorisations.

This was also reported in The Chemist+Druggist

HDA UK Media and Political Bulletin – 12 November 2021

From Factory to Pharmacy

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