Rising costs of generic medications
Tuesday, 14 June 2016
A recent investigation by The Times newspaper has shown that some entrepreneurs have made a fortune by exploiting a loophole in NHS pricing rules.
Drug companies that raised the price of medicines by up to 12,500 per cent could face multimillion-pound fines after the government called in the competition watchdog.
The prices of 32 drugs have risen by more than 1,000 per cent in the past five years. The companies face limited competition on long-established, off-patent drugs, which they bought from large pharmaceutical companies. By dropping the brand name, the medicines are taken outside NHS profit controls and suppliers are free to oversee 'extortionate' price rises.
The price rises on more than 50 drugs cost the taxpayer an extra £262 million last year alone. One private equity firm has made about £1.5 billion from buying and merging drug companies that imposed large price rises.
Many feel that the blame for this lies with the Department of Health for its lack of control and supervision on pricing. Some generic prices are now far above those of the original patented products and also well above generic prices in other EU countries.
It may be possible in the future for the NHS to obtain supplies elsewhere in the EU, under current mutual recognition procedures of product registration. This might involve some changes in labelling requirements but that would be a price worth paying to have an effective price structure for these older generic products supplied.
Clearly it is important that pharmaceutical companies are not exploiting the NHS. The secretary of state is currently looking into this investigation. It is illogical for NHS funding to be used in this way and for some companies making money in this manner. The loophole in the NHS pricing rules clearly needs to be closed as soon as possible to stop this continuing further.