A new law which aims to bring tougher price control to unbranded generic drugs received Royal Assent in the House of Commons on 27 April 2017.
The Health Service Medical Supplies (Costs) Act gives the government the power to instruct pharmaceutical companies to reduce the price of a generic medicine or introduce other controls on their branded products in cases where it thinks drug companies are charging “unreasonable” prices for generics.
Manufacturers could face financial penalties if they fail to comply with the new law.
The government has traditionally relied on the market to keep generic costs down but in cases where there is no competition, prices have been hiked, according to the Department of Health briefing paper on the new legislation.
The intention is for the department to work with industry representatives and the Competition and Markets Authority to determine when a price is “unreasonably high”. The new legislation will also give the government more powers to collect information about the sale of drugs.
The Health Service Medical Supplies (Costs) Act was among a raft of bills which were granted Royal Assent on 27 April, before the dissolution of Parliament on 3 May 2017 ahead of the 8 June 2017 UK general election.