Norton Healthcare has announced that it is to halt production of 23 generic lines in patient packs if the Government goes ahead with its proposed price cuts for generic medicines.
In a letter sent to members of the Norton Advantage scheme in the past few days, the company says that it will be uneconomic to make the products "unless a more realistic reference price is agreed."
Norton is to continue to supply the products at current prices from its existing stocks and will then discontinue them.
Mr Nick Foster (sales and marketing director, Norton) told The Journal on May 23 that the price cuts meant that there was a real risk of a range of generics being discontinued by all generic manufacturers.
"We could not produce and sell them, including building in the wholesaler's margin, at the prices proposed," Mr Foster said. It cost 23p to produce each patient pack, not allowing for the cost of its active contents.
Part of the problem lies with the fact that the Government's proposed prices have been calculated from Drug Tariff prices at the end of 1998, when many of the products affected were only available in bulk packs, and not in patient packs, as now.
"The Government is saying ‘if you could make them in bulk at that price then why can you not do it now. We are saying that they were unattractive products even then," Mr Foster said. "Market prices were ridiculously low."
He added that the Government was not suggesting that manufacturers should go back to producing generics in bulk packs, but that it was certainly not encouraging the production of patient packs to implement the EC directive on packaging and labelling of medicines.