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Drug pricing

DHSC to consult with pharmaceutical industry over generics price limiting powers

Sir Chris Wormald, permanent secretary at the Department of Health and Social Care

Source: Nick Williams / Flickr

Sir Chris Wormald, permanent secretary at the Department of Health and Social Care, said that a consultation of relevant bodies needs to take place before the government’s powers to limit prices are implemented

The Department of Health and Social Care (DHSC) will consult with the pharmaceutical industry over its plans to use new powers limiting the price of generics, the department’s permanent secretary has said.

In a letter to the House of Commons Public Accounts Committee (PAC), Sir Chris Wormald, permanent secretary at the DHSC, said the Department was preparing “a framework for the use of its price-limiting powers” and it will consult on this with the industry.

His comments come in response to a PAC report on the rocketing prices of generic medicines in 2017, in which the committee said it was “not convinced that the department had a clear plan on how it would use the new powers”.

In July 2018, the DHSC was awarded new powers to instruct pharmaceutical companies to reduce the price of a generic medicine or introduce other controls on their branded products in cases where it thinks drug companies are charging unreasonable prices for generics.

However, the report found that the DHSC had “not yet set out how it will use its new powers, should similar price rises happen again” and recommended that the DHSC “write to the [PAC] to set out the full range of actions it can take to address rises in the price of generic medicines, and what skills and capacity it has put in place to use its new powers”.

In response, Sir Chris said the DHSC “is monitoring prices to determine where price increases have been sustained and where the market has corrected itself”.

But he added that the government’s “powers to limit prices can only be implemented following a consultation of the relevant industry bodies”.

He continued: “The department is therefore developing a framework for the use of its price limiting powers and is preparing an industry consultation to be released early 2019.

“The framework will set out what factors the department proposes to consider when setting the price of a generic medicine and what process the department will follow.”

The British Generic Manufacturers Association told The Pharmaceutical Journal that, as of 17 January 2019, it had yet to recieve a copy of the consultation.

Citation: The Pharmaceutical Journal DOI: 10.1211/PJ.2019.20206006

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