HDA Media And Political Bulletin – 26 October 2016

Obscene drug profits to be outlawed

25 October 2016, The Times, Billy Kenber, Alexi Mostrous

 

Under new legislation proposed by the Department of Health, drug companies will be banned from generating large profits from the NHS. The Health Service Medical Supplies (Costs) Bill is being introduced following an investigation by The Times that uncovered several pharmaceutical companies exploiting a loophole in NHS rules. Some companies are thought to have raised prices of generic medicines by up to 12,500%. Under this new legislation drug companies will be required to provide the Government with information on the profit margins of their medicines. The Government will have the power to enforce a lower price if they have cause to believe the NHS is being overcharged.

 

NHS drug suppliers investigated over prices

26 October 2016, The Guardian

 

The Competition and Markets Authority (CMA) has begun investigating drug companies believed to have been overcharging the NHS for medicines. If these companies are found to have broken the law they may be fined up to 10% of their turnover. The CMA began the investigation after an article in The Times revealed that several drug companies were taking advantage of a loophole in NHS rules to excessively raise the price of generic medicines.

 

Will Wales follow England’s lead with pharmacy funding cuts?

24 October 2016, Chemist & Druggist, Beth Kennedy

 

Vaughan Gething, the Cabinet Secretary for Health, Wellbeing and Sport in Wales, has said that the Government has no current plans to reduce community pharmacy funding. However, he did say that the cuts in England provide an opportunity for the Welsh Government to appraise whether the investment they are making in the pharmacy sector will benefit the Welsh people in the future. However, Vaughan Gething clarified that the Welsh health and social services budget does not currently contain proposals for the reduction of community pharmacy funding.

 

The community pharmacy funding cuts in England were further reported in Pharmaphorum

 

Parliamentary Coverage

 

House of Commons Questions, Drugs: Wholesale Trade

Health

Tom Brake: What measures his Department has in place to (a) monitor and (b) limit the amount of profit which pharmaceutical wholesalers are able to make from the NHS each year.

David Mowat:

The Department introduced the Health Service Supplies (Costs) Bill on 15 September. This Bill is intended to enable my Rt. hon. Friend the Secretary of State to make regulations to obtain information from across the supply chain to assure itself that all parts of the supply chain provides value for money to the National Health Service and the taxpayer. We expect everyone in the NHS and the supply chain should play its part in achieving efficiency savings.

 

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House of Commons Questions

Health

Tom Brake: What assessment he has made of the potential merits of making savings in the pharmaceutical supply chain instead of reducing funding to community pharmacies

David Mowat:

The Department introduced the Health Service Supplies (Costs) Bill on 15 September. This Bill is intended to enable my Rt. hon. Friend the Secretary of State to make regulations to obtain information from across the supply chain to assure itself that all parts of the supply chain provides value for money to the National Health Service and the taxpayer. We expect everyone in the NHS and the supply chain should play its part in achieving efficiency savings.

 

Full Coverage

Obscene drug profits to be outlawed

25 October 2016, The Times, Billy Kenber, Alexi Mostrous

 

Drug companies will be blocked from extracting “obscene profits” from the health service under new legislation welcomed by MPs.

A bill preventing pharmaceutical companies from massively increasing the cost of common medicines was introduced after The Times revealed in June that several were exploiting a loophole to deprive the NHS of £262 million last year alone.

The companies acquired the marketing rights for old medicines long out of patent and increased prices by up to 12,500 per cent.

They were able to circumvent profit caps imposed by the Department of Health by dropping the brand name.

Under new legislation, drug companies would be forced to provide information on how much money they are making from medicines and the government would be able to impose a lower price if it felt the health service was being overcharged. Introducing the second reading of the bill last night, Jeremy Hunt, the health secretary, said: “We cannot allow this practice to continue unchallenged.”

 

NHS drug suppliers investigated over prices

26 October 2016, The Guardian

 

The competition watchdog has launched an investigation into drug companies accused of charging the NHS excessive prices.

If the companies are found by the the Competition and Markets Authority to have broken the law, they could face fines of up to 10% of their turnover.

The CMA said: “The investigation relates to suspected unfair pricing by way of charging excessive prices in the supply of certain pharmaceutical products, including to the National Health Service.”

The health secretary, Jeremy Hunt, called in the CMA in June after an investigation by the Times suggested companies were exploiting a loophole in NHS rules to raise prices of medicines.

The newspaper alleged that companies faced limited competition on long-established, off-patent drugs, bought from large pharmaceutical firms. It was also claimed that the prices of 32 drugs had risen by more than 1,000% in the past five years.

Concordia International said it was one of the companies being investigated. A spokesman said: “We are working co-operatively to better understand the CMA’s position and we will continue to work constructively to resolve the matter.

“Although Concordia has also had past discussions with the CMA regarding the supply of certain of its products in the UK, this is the first interaction with the CMA regarding the company’s pricing.”

 

Will Wales follow England’s lead with pharmacy funding cuts?

24 October 2016, Chemist & Druggist, Beth Kennedy

 

Cuts to funding in England provides the Welsh government an “opportunity to reflect” on its own investment in community pharmacy, a health minister has said.

Cabinet secretary for health, wellbeing and sport Vaughan Gething reassured pharmacists in his country that the government has no current plans to reduce community pharmacy funding, despite England’s pharmacy budget being cut by £113 million from December.

However, the “changes” in England provide an opportunity to reflect on whether the “considerable investment” the Welsh government makes in the sector “will meet the needs of people in Wales in future”, he said in a statement on the day the cut was finalised (October 20).

Mr Gething acknowledged that English funding cuts, would be “of concern” to Welsh pharmacists, because the community pharmacy contract has been the same for Wales and England since 2005.

But he clarified that the Welsh health and social services budget does not include proposals to reduce community pharmacy funding.

Maintaining current funding levels will be “conditional” on the sector in Wales complying with “new arrangements” from April 2017, including providing more and improved clinical services, reducing medicines waste and using automation to free up pharmacists’ time, Mr Gething stressed.

The government will consult Community Pharmacy Wales over the plans, and Mr Gething will make a further statement once this consultation ends, he added.

 

Government pushes on with pharmacy funding cuts

25 October 2016, Pharmaphorum, Richard Staines

 

The government has announced it is to push forward with plans that could, according to some estimates, lead to thousands of pharmacies closing across England.

In a statement to the House of Commons last week, junior health minister David Mowat, confirmed plans to reduce the £2.8 billion annual pharmacy bill by around £200 million over the next two years.

The government had briefly put the plans on hold because of a public outcry against them, but that wait seems to be over.

The proposals were roundly criticised by a panel of experts in a pharmaphorum/IMS Health webinar earlier this year.

They said the cuts would hit the most vulnerable people the hardest, such as elderly people who rely on their pharmacists for health advice as well as medicines.

Mowat said there are more than 11,500 pharmacies in the country, an increase of over 18% in the last decade.

The overall spend has increased by 40% over the past decade and now stands at £2.8 billion annually, he said in the statement.

He added that on average each pharmacy receives nearly £1 million for the NHS goods and services it provides, of which £220,000 is direct income. This includes a £25,000 fixed sum payment paid to most pharmacies “regardless of size and quality”, said Mowatt.

“There are instances of clusters of up to 15 pharmacies within a 10-minute walk of each other. When the overall NHS budget is under pressure and we need to find £22 billion in efficiency savings by 2020, it is right that we examine all areas of spend and look for improvements.”

Under the plan “Community Pharmacy in 2016-17 and Beyond”, pharmacies will receive £2.687 billion in 2016-17 and £2.592 billion in 2017-18 – a 4% reduction followed by a 3.4% reduction.

Mowat noted in his statement that the government will introduce a review process to deal with unforeseen circumstances affecting access such as road closure, and review cases where areas may need more coverage due to high levels of deprivation.

The government has listed around 1,300 pharmacies that will receive additional payments until March 2018 because they are in areas with deprivation or areas that have poor coverage.

Payments under the scheme will be £11,600 this financial year and £17,600 the following year under the pharmacy access scheme – although there is no commitment for further payments beyond March 2018.

Barbara Keeley, Labour MP for Worsley and Eccles South, noted previous warnings that up to 3,000 pharmacies may close as a result of the cutbacks.

She said: “The government’s plans are not only deeply unpopular; they are short-sighted, and will hit the areas with the greatest health inequalities hardest.”

Dismissing the warnings as “scaremongering”, Mowat responded: “It is possible that none will close. I do not believe that 3,000 will close.”

The Pharmaceutical Services Negotiation Committee (PSNC), which represents pharmacies, has already rejected the proposals.

This year’s negotiations were “not characterised by collaborative working” and the proposals were presented as a “fait accompli” by the government, the PSNC added.

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