The Pharmaceutical Journal Vol 264 No 7097 p744
May 20, 2000 News

PSNC warns of more generic shortages

The Pharmaceutical Services Negotiating Committee has warned the Government that its proposal to set maximum prices for generic medicines and to abolish Drug Tariff category D will lead to future shortages of generics. The warning was outlined by the PSNC chairman (Mr Wally Dove) at a press briefing on May 12, following the committee's May meeting. A particular concern of PSNC members had been that the removal of Category D would lead to problems between pharmacists and patients when generics were not available, because there would be no system to allow pharmacists to supply, and be reimbursed for, higher priced branded equivalents. "We are absolutely amazed that the Department of Health has not thought this through," Mr Dove said. "We feel that there are going to real shortages. The Department does not accept that. It thinks that there will be true competition and that there will be no shortages."

PSNC: Future shortages of generics will be the Government's fault

PSNC members were also concerned that the negative impact of price cuts would be felt mostly by pharmacies.
"Much of the pain that will be generated will be passed down to contractors," Mr Dove explained. "Manufacturers will not take a financial hit and our experience of wholesalers is that they will pass it on. We have no alternative but to recommend that contractors run their stocks down"
Mr Dove blamed the situation on the House of Commons Health Select Committee. Its members had seen category D as providing an opportunity for the creation, and exploitation, of artificial stock shortages, when it had been introduced in 1996 as a solution to the problem of shortages. "Contractors are not to blame and they are not going to take the flak," Mr Dove said.
The PSNC has also accused the Government of mendacity when it had said that prices would be returned to those in the Drug Tariff in November, 1998. Analysis of the Department's proposals had found that 58 of the 478 maximum prices proposed were lower than in November, 1998, 27 were for products not in the Tariff at that time and 11 had not been calculated in accordance with the Department's own rules. In total, only 53 per cent of the proposed prices matched the Department's claims.
A letter sent by the PSNC to the Department's chief pharmacy negotiator (Mr Kevin Guinness) said: "This reckless approach will have serious and possibly dangerous consequences upon patient care and the PSNC is not prepared to accept any blame for the consequences of your action."

Other matters considered at the PSNC's May meeting are reported below.

Remuneration A remuneration offer for 2000-01 was rejected unanimously. Details of the offer were not released. Mr Dove said: "We have been hit over the head so hard and so often over recent years that morale is at an all-time low, whether you talk about small or large contractors or employees. This is affecting not just morale, but also future investment plans. It is time that the NHS woke up to this fact."

Discount A discount inquiry planned by the Department based on April invoices had been delayed until the autumn at the PSNC's request.

NHS challenges A co-ordinated approach had been agreed between the PSNC, the National Pharmaceutical Association and other contractor organisations. The Company Chemists Association had already made a separate response to the consultation, but had indicated full agreement with the PSNC/NPA position.
Although the PSNC saw this as an opportunity to press the case for community pharmacy, Mr Dove said: "The Government knows what it wants to get out of this; it is just window-dressing." The PSNC/NPA response is expected to be published shortly.