Generics proposals undermine pharmacy funding
Dispensing profit agreement is threatened by new plan for generics reimbursement |
Pharmacy negotiators are at loggerheads with the Department of Health over its proposals for the reimbursement
of branded generic medicines.
The Pharmaceutical Services Negotiating Committee said it was “alarmed” that
nearly a third of the branded generics the DoH intends to remove from
the Pharmaceutical Price Regulation Scheme (PPRS) are discontinued
drugs.
It also repeated its opposition to the Government’s proposals to
reimburse branded generics in the same way as generic medicines, claiming
the change threatens the guaranteed £500m retained purchase profit
margin promised in the new contract.
The PSNC argues that pharmacy profit levels would be reduced if the Government
reimburses branded generics at the lesser of either the Drug Tariff price
or the branded generic standard list price.
PSNC chief executive Sue Sharpe told the DoH this week: “The proposal
as it stands would do nothing but encourage branded generic prescribing,
damage the competitive generic market, undermine the basis for funding
of community pharmacy and would substantially drive up costs for the
NHS.”
Her comments come in the PSNC’s response (PDF 210K) to a second
consultation on the issue of reimbursement for branded generic drugs.
The deadline
for comments ran out this week. This second consultation focused on seeking
comments on the list of proposed branded generics the DoH wants to remove
from the PPRS. More than a third of the drugs on the list have been discontinued — one
of them more than 10 years ago.
Mrs Sharpe told the DoH that the out-of-date list “could indicate
that this issue has been treated by the Department with a lack of attention
to detail and a failure to comprehend either the relevant market or the
impact of the proposed changes.”
The PSNC’s attempt to bring the focus of the consultation back
to the impact the changes will have on the new contract are, however,
likely to fail. In the latest consultation document, which highlights
the comments to the original consultation earlier this year, the DoH
claims there is nothing in the new community pharmacy contract that protects
the individual earnings of pharmacies.
It also said “it should not be the case” that the £500m
retained profit margin would be jeopardised by the new reimbursement
arrangements but promised “the Department of Health and the PSNC
will monitor these margins in order to ensure the retained margin is
not jeopardised”.
NPA response The National Pharmacy Association
has said that standard branded generics should be treated as true
generics. NPA chairman Raj Patel said this
week: “In negotiating the new pharmacy contract a reduction in generic
pricing was agreed, but this proposal for the pricing of standard branded generics
via a new Drug Tariff Category S will disrupt the fair funding
principle.”
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