The Pharmaceutical Journal
Vol 276 No 7397 p468
22 April 2006

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Pharmacies overpaid for generics, says LSE researcher

Community pharmacies are making more profit from drug purchasing for NHS dispensing than allowed in the new pharmacy contract for England and Wales, according to London School of Economics researcher Panos Kanavos. Dr Kanavos bases his claim on an analysis of a sample of generic medicines dispensed during the first half of last year, before the contract came into effect.

“Total NHS outlay could be nearly halved if the discounts paid were reduced, Dr Kanavos claimed.

The Pharmaceutical Services Negotiating Committee responded: “It is inaccurate to extrapolate from the profits of a few lines to estimate total profit levels.”

It added that pharmacies had to stock thousands of different medicines and margins varied from those selected by Dr Kanavos. Some margins were very low and some reimbursement prices were below purchase prices. A study, with the Department of Health, was underway to see exactly what overall purchase profit was being achieved.