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Pricing

Equal pricing is a recipe for disaster

From Mr A. Sutherland

The comments by M. Franks (PJ, March 31, p422) regarding discounts need to be addressed. It is true that wholesalers and manufacturers offer grossly inequitable discounts to community and hospital pharmacies. However, the reasoning behind this is not one of malice, but of simple economics.

Hospital pharmacies in their purchasing try to negotiate economies of scale where possible, as they often buy items in much greater numbers than their community counterparts. Also, rather than being remunerated retrospectively, as community pharmacies are, hospital pharmacies have a definite budget in April of each year, which they must stretch as far as possible. Were a hospital to pay the same as a community pharmacy for its stocks (ie, the C&D price) then the National Health Service would spend an awful lot more money on its drugs. Thus the wholesaler is flexible in its price. Since the hospital buys in bulk, wholesalers are able to charge a greatly reduced price.

The pharmaceutical industry has also realised that secondary care is where the money is made. With the exception of the common generic items, such as amoxicillin and the first-line cardiac drugs, most therapies are commenced in secondary care. Thus, it is in the industry's interest to “persuade” consultants and drug and therapeutics committees to recommend their drugs. In large part this is based on documented evidence, but there is also a measure of cost involved. If a representative can offer a hefty discount then the hospital is more likely to make his company's drug first-line treatment. For example, in many hospitals, the first line proton pump inhibitor is Zoton (lansoprazole) not because the evidence is there to support it over omeprazole (both are as effective as each other1) but because AstraZeneca is able to make Zoton so much cheaper for the hospital to purchase in the vast quantities that it needs.

By charging so unfairly, the pharmaceutical industry is indeed saving the NHS money. Making the industry charge the same lower price for all is a recipe for disaster.

Reference
1. Blum RA. Lansoprazole and omeprazole in the treatment of acid peptic disorders. Am J Hosp Pharm 1996;53: 1401–15.

Adam Sutherland
Fourth-Year Undergraduate
School of Pharmacy and Pharmaceutical Sciences
University of Manchester

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