The Secretary of State for Health (Mr Alan Milburn) will take control over the prices of non-Pharmaceutical Price Regulation Scheme branded medicines and branded generics sold to the National Health Service from February 14.
Regulations which come into effect on that date fix the maximum prices of all medicines produced by manufacturers who have not signed up to the PPRS. For sales to the NHS in excess of £1m in the 12 months to September 30, 1999, the maximum price is 95.5 per cent of initial prices published on the internet at www.doh.gov.uk/pprsjuly.htm by the Department of Health on January 20. For medicines with smaller sales, the maximum price is the listed price.
Where a specific product is not included in the list, its initial price is deemed to be that of another presentation of the same product where only the packaging or pack size is different.
Prices can be increased only by the Secretary of State either by his own choice or on application by the manufacturer.
The regulations require all non-PPRS manufacturers to keep tally of both the volume and value of medicines sold to the NHS in every three month period starting from February 14. The records have to be kept for three years. Any company that charges more than the maximum price under the regulations will be liable to pay back to the Government on demand the difference between the permitted price and that actually charged plus a penalty.
The penalty increases from 5 per cent to up to 50 per cent of the difference depending on how long the excess price remains uncorrected.
Daily penalties ranging from £250 to £10,000 will also be payable by manufacturers that fail to provide the information needed by the Department to decide whether the regulations have been breached.
Provision has also been made for manufacturers to appeal against demands for repayment.
The Health Service Medicines (Control of Prices of Branded Medicines) Regulations 2000, SI 2000 No 123. The Stationery Office, price £2.
The Health Service Medicines (Price Control Appeals) Regulations 2000, SI 2000 No 124. The Stationery Office, price £3.