Hospital Pharmacist
Vol 11 No 7 p263
July/August 2004

News summary

Changes to the way generic products are to be procured spark controversy

Many of the main stakeholders involved in the procurement of generic drugs have misgivings about the new purchasing arrangements that are in the process of being brought in by the NHS Purchasing and Supply Agency (PaSA).

The changes include co-ordinating the contracts to supply certain generic drugs on a national, rather than a regional, basis, inviting only separate bids for each affected product line and awarding the contracts for a carefully-selected small range of products by “e-auction”. Adjudication of the bids is set to take place in August, with the new contracts to be awarded in September and to run from 1 November.

Peter Sharott, chairman of the Pharmaceutical Market Support Group (PMSG), the organisation charged with managing the supply of generic products, told Hospital Pharmacist that the PMSG are concerned about the effects of the new arrangements on the continuity of supply of generic products, particularly injectables, used only in hospitals. “We are working closely with PaSA to ensure that these issues are managed appropriately,” he added. He emphasised that contracting for drugs is not the same as contracting for many other commodities the NHS uses — “it is vital to preserve the supply chain for critical drugs to avoid compromising patient care”.

Speaking from the suppliers’ perspective, Martin Anderson, director of commercial affairs at the Association of the British Pharmaceutical Industry is concerned about the potential risk and inconvenience to patients. He also points out that there has been a general lack of consultation with suppliers before the arrangements have been brought in. In addition: “the exact status of existing contracts and the long-term effects on competition in the market place are unknown,” he said. A spokesman for MaynePharma, one of several suppliers of generic products to NHS hospitals, told Hospital Pharmacist that although the exact details of the new arrangements are still a little unclear, they have reservations as to the speed of the process. Drug continuity issues are particularly important for specialist products and are unlikely to be helped by the fact that suppliers are to receive only two months’ notice of the volumes they will be required to supply. They also hope that products will continue to be risk-assessed before contract awards are made and that innovations relating to packaging and labelling will not be compromised in search for modest financial savings. A spokesman for Phoenix Pharma, pointed out: “ the new arrangements represent a move away from a tried and tested system of regional contracting, which has ensured the supply of generic pharmaceuticals for the whole UK NHS secondary care system, to an unproven system.”

According to Allan Karr, pharmacy business services manager at University College London Hospitals NHS Trust and chair of the Procurement and Distribution Interest Group (PDIG) of the Guild of Healthcare Pharmacists: “Anything that increases the risk of drug shortages is always going to be an issue for hospital pharmacists. Whether the savings made under the new national arrangements will benefit the drugs budgets of individual trusts and whether trust staff will feel disenfranchised from the procurement process for generic drugs and so not be fully committed to the agreements are also considerations.”

Details about the new arrangements were set out by Howard Stokoe, principal pharmacist at PaSA at the PDIG symposium last month (see p293). The changes are part of the NHS Supply Chain Excellence Programme, designed to use the purchasing power of the NHS more effectively, making cost savings and improving the transparency and efficiency of contracting.