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CCGs bore brunt of generic drug price rises last year, say MPs

Government must be better prepared for drug shortages post-Brexit

Adrian O'Dowd

Friday, 12 October 2018

Clinical Commissioning Groups (CCGs) unfairly bore the brunt financially of rising prices of some generic drugs last year and must not be forced to do so again, according to MPs on the parliamentary public accounts committee.

The committee has today published a report* on price increases for generic medications, warning that the government must be better prepared with plans to secure medicine supplies after Brexit in March of next year.

During 2017, the prices of certain generic medicines purchased by community pharmacies for the NHS increased unexpectedly, affecting an unusually high number of medicines, says the report.

Although the Department of Health and Social Care and its arms-length bodies took action to ensure patients continued to receive the medicines they needed, it was slow to take action to manage the financial impact, the MPs claimed.

There were signs that prices of certain medicines were increasing from June 2017, said MPs, but the Department failed to take any action to manage costs until November.

Consequently, CCGs bore the brunt of this unexpected increase in costs, which contributed substantially to their end-of-year overspend of around £250m in 2017-18.

MPs said that although there was no evidence that any patients were harmed, some patients had difficulties obtaining medicines and pharmacists had to go to greater lengths to secure medicines in short supply.

The report claims that the Department’s ability to deal with any future reoccurrence of these issues in a “more timely and effective manner” hinges on its 2017 powers and accompanying regulations introduced from July 2018.

“We were not convinced that the Department had a clear plan on how it would use the new powers,” says the report.

“Also, the Department could not assure us of its plans to safeguard the supply of medicines after the UK has exited the European Union, which is worrying given that this exit is fast approaching.”

Committee chair Meg Hillier said: “The impact of last year’s generic drug price increases should have served as a wake-up call to government.

“Clinical commissioning groups ended the financial year with an overspend of some £250m – the majority of which, NHS England accepts, was due to these price rises. Difficulty obtaining medicines left patients frustrated and distressed and pharmacists faced additional pressures to secure medicines in short supply.

“Yet while the Department of Health and Social Care now has new powers at its disposal, it could not explain to us how these will better enable it to handle similar price increases and related shortages in future.

“This is unacceptable and doubly worrying in the context of uncertainty over supply chains after Brexit, particularly for medicines with a short shelf-life. Government cannot afford to drag its feet on this critical issue, either now or after Brexit.”

The committee’s report recommends that by the end of this year, it wants the government to share its plan for maintaining the supply of medicines pre and post the UK’s exit from the EU, and confirm how it will ensure patients will be able to obtain the medicines they need.

It also recommends that by December, the Department and NHS England should release updated guidance to CCGs setting out their contingency plans to mitigate the financial impact on CCGs if there is a repeat of these unforeseen price increases.

A Department spokesperson said: “The government is confident of reaching a deal with the EU that benefits patients and the NHS is preparing for all situations. We are working closely with partners to ensure adequate stockpiles are in place for all medicines which may be affected in the event of a no deal Brexit.

“Our number one priority is to ensure that patients have access to safe and effective medicines – and we have some of the cheapest drug prices in Europe.”


* Price increases for generic medications. Public Accounts Committee, 12 October 2018.

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