Almost 70 concessionary drug prices still to be agreed for November

The PSNC had asked for an unprecedented 97 drugs to be granted concessionary (higher) prices in November, but by the end of November, the DH had agreed prices for only 38 of them.

Mike Dent, PSNC director of pharmacy funding

The Pharmaceutical Services Negotiating Committee (PSNC) has responded to the Department of Health’s (DH) delayed proposed price concessions that are threatening the cashflow of thousands of community pharmacies.

The PSNC had asked for an unprecedented 97 drugs to be granted concessionary (higher) prices in November, but by the end of November, the DH had agreed prices for only 38 of them.

The government has now proposed prices for 52 of 67 outstanding medicines, and the PSNC has responded, but the DH will make the final decision on the price it will pay.

The PSNC said the delay in agreeing November’s price concessions has caused “massive concerns” for contractors who will need to pay for November supplies at the end of December, including many products bought at very high prices.

PSNC director of pharmacy funding, Mike Dent, said contractors were working hard to find medicines for patients, but they still did not know whether they would be fully reimbursed for the drugs they had provided.

Analysis of prescribing data and concessionary prices by Oxford University’s Evidence-Based Medicine DataLab, estimates that an extra £56m was spent on concession-priced drugs in October 2017, putting the total increase in cost to the NHS from concession prices at £233m since April 2017.

The DataLab has also warned that concession prices were influencing the drug tariff price for products, with medicines increased in price under the concessionary scheme not falling back to their original drug tariff price when the concession ends.

Dent said the PSNC was keen to see concessionary prices rolled over from month to month until new evidence suggested that the price had fallen. The current system, where concessions applied only in the month where they are granted, left contractors “buying into a world of uncertainty”, he said.

Warwick Smith, Director General of the British Manufacturers Association (BGMA), said prices of some drugs had increased following “production issues that have impacted a small number of manufacturers”.

But he said a survey of BGMA members had shown that concessionary prices set for October were “on average 2.5 times the actual prices charged by manufacturers”.

Martin Sawer, executive director of the Healthcare Distribution Association (HDA), which represents drug wholesalers, agreed that there had been a worldwide shortage of generic drugs for regulatory and production reasons.

He suggested that the Medicines and Healthcare products Regulatory Agency (MHRA) should scrutinise the current generic drug supply system.

“Someone needs to look at the supply chain, because clearly, the existing system is not working,” he said.

Community Pharmacy Wales and Community Pharmacy Scotland both said pharmacies in their countries had also experienced a rise in generic drug prices.

In Scotland, community pharmacists will receive a one-off payment of 21% of their dispensing pool balancing payment for October 2017, to help with cashflow problems caused, in part, by an increase in drug prices.

A spokesperson for the Department of Health said it was still considering the outstanding concessions requests and that it had increased pharmacies’ advance payments twice in recent months.

Last updated
The Pharmaceutical Journal, December 2017;Online:DOI:10.1211/PJ.2017.20204104