Pharmaceutical companies have denied that they are creating shortages of generic medicines in order to drive up profits. Instead, they have told Members of Parliament that they are saving the National Health Service £2bn a year (our Lobby correspondent writes).
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Minister accuses companies of stockpiling to boost prices, but admits to Parliamentary committee that he has no evidence to back up his claim |
The Minister of State for Health (Mr John Denham) told the committee that the impact on health authorities would be minimal - about 0.5 per cent of NHS resources - and would be offset by savings from the Pharmaceutical Price Regulation Scheme. He said: "Health authorities should be able to cope."
However, Lord Philip Hunt (Parliamentary Under-Secretary of State for Health) told the committee that some medicines were being withheld to boost prices.
"There must be the supposition that stockpiling has been going on, but I cannot produce any hard evidence of that," he said.
The Office of Fair Trading is investigating alleged abuses of the £600m generic medicines market after recent price rises of up to 600 per cent coincided with shortages of some medicines.
The pharmaceutical companies, however, claim that 80 per cent of the medicines they manufacture are made at a loss and that high prices are the fault of a highly competitive market.
Mr Wally Dove (chairman, Pharmaceutical Services Negotiating Committee) said that the industry had acted swiftly to cope with shortages. He said: "The problem is trying to accurately forecast the volume of each product needed. But the generic industry moves very quickly when it is realised that we are failing to produce enough of some products."
The shortages had been caused by several factors, he said, including the revocation of Regent Laboratories's medicines manufacturing licence by the Medicines Control Agency at the end of 1998. Regent had produced around 10 per cent of generic medicines used in the NHS. There had also been the failure in October, 1998, of the industry and the Government to agree transitional arrangements for the new method of supplying medicines in patient packs.
"I think patients have suffered as a result," Mr Dove told the committee. "For example, we have had to supply 5mg tablets instead of 2.5mg tablets and patients have been told to break them in half."
Mr Jon Close (chairman, British Generic Manufacturers Association) said: "I think we need to be careful about being too harsh on generic drug manufacturers or people will start moving back to using brand names which would cost the NHS an extra £2bn a year. The generic pharmaceutical industry provides 50 per cent of NHS medicines at 10 per cent of the total drugs bill. The generic share of the £5.6bn drugs bill is £500m."
Mr Close continued: "We are busting a gut to get medicines back into the market place and we keep on hearing that we are not doing our best. It is irritating. There is a genuine shortage in the market for certain items. Our shelves are empty. We are not stockpiling drugs. Our members are losing millions of pounds every week because of these shortages. The current reimbursement system is a mess and we have been saying for over a year that the [Drug Tariff] Category D system does not work."
The cost of generic medicines is usually reimbursed to pharmacy contractors at a weighted average price. The shortages mean that pharmacies have to source them from different suppliers or switch to more expensive branded medicines.
Mr Close called for greater regulation of the industry, saying: "We need to get around the table with all the interested parties and the Government and come up with a way of producing the required amount of medicines at reasonable prices. We are all coming from the same direction. It is this lack of understanding that is causing the problems."
Ms Helen Marlow (pharmaceutical adviser, Croydon health authority) said that the problem had resulted in a £500,000 overspend on her £25.5m budget. This had caused real problems. Shropshire had suffered a £1.6m overspend on its £42m budget and similar figures were being reported across Britain.
Mr Denham said that a total review of the industry would be completed by January.
"On the basis of what we knew in May, there was no reason to believe that we were facing a fundamental change in the way the market was operating," he said. "The view was that the market was going to make up for the loss of supply from Regent and the initial shortage appeared to be a temporary problem. We now recognise that we have a major change in the way the market operates and it does not look as if there will be an immediate return to the situation we had last year."
He added: "This year, the market has failed to work efficiently and effectively and in the interests of the NHS. It is very clear that we need to find the best ways of tackling the situation that we are now in."
The Minister issued a veiled threat to manufacturers and wholesalers, saying: "The review will look at the alternative options which might be available to us if it is not possible to get the market back functioning in the way it was in the past."