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MPs concerned that government does not know how to tackle generics price hikes, despite new powers

Meg Hillier, chair of the House of Commons public accounts committee, is concerned that the government failed to explain how it will better handle future price rises in generic medicines.

Meg Hillier, MP for Hackney South and Shoreditch

Source: Martin Rickett/PA Archive/PA Images

Meg Hillier, chair of the House of Commons public accounts committee, which criticised the government’s handling of the 2017 generics price hike, stating that it was “unacceptable and doubly worrying” in light of current Brexit supply chain concerns

MPs have criticised the Department for Health and Social Care (DHSC) for the way it handled the generics drugs price problems in 2017 and said they have little confidence in new government powers designed to prevent history repeating itself.

Politicians are also worried about the impact of Brexit on the medicines supply chain — particularly medicines with a short shelf-life — and have given the DHSC a December 2018 deadline to explain how it will guarantee that patients will continue to get the medicines they need after the UK leaves the EU at the end of March 2019.

The DHSC was “slow” to take action to manage the financial impact of the price hikes in generic drugs in 2017, according to the House of Commons public accounts committee’s report of its inquiry into ‘Price increases for generic medications’ published on 12 October 2018.

There was evidence that prices were rising in June 2017, but it was not until November of that year that the DHSC took action and carried out an analysis into what caused the increases, the report found.

Civil servants had told MPs during the inquiry that the DHSC knew prices were on the rise but “it did not know how best to take action because it did not have the information to understand what was happening until the end of October,” according to the report.

MPs were also concerned that the crisis in generics — which added £315m to clinical commissioning group (CCG) spending in 2017 — was the main reason why they were £250m in the red at the end of the 2017/2018 financial year.

And they were worried that there is little understanding at the DHSC about how it intends to implement new powers that allow Whitehall to demand market information from generic manufacturers and gives the secretary of state for health and social care new powers to step in and intervene, and limit price rises in future.

Meg Hillier, chair of the committee and MP for Hackney South and Shoreditch, said: “The impact of [the 2017] generic drug price increases should have served as a wake-up call to government. Difficulty obtaining medicines left patients frustrated and distressed, and pharmacists faced additional pressures to secure medicines in short supply.

“Yet while the DHSC now has new powers at its disposal, it could not explain to us how these will better enable it to handle similar price increases and related shortages in future. This is unacceptable and doubly worrying in the context of uncertainty over supply chains after Brexit, particularly for medicines with a short shelf-life.”

She added that the government “cannot afford to drag its feet on this critical issue, either now or after Brexit”.

The committee has given the government until December 2018 to show that it has a plan in place to guarantee patients will continue to have access to the medicines they need, as well as established systems to “to mitigate the impact of price rises on desperately stretched NHS resources”.

The committee also wants to be reassured, by the same date, that information-sharing between organisations about prices and pressures on the market has been improved, and that a system is in place so that “clinicians can obtain greater transparency of the price of the generic medicines they prescribe”.

MPs also said that by December 2018 they will expect the DHSC and NHS England to have improved their information sharing about the generics market and to have prepared a contingency plan to prevent CCGs falling into the red should there be another crisis in the market.

Mark Burdon, regional representative for the North East and Cumbria at the Pharmaceutical Services Negotiating Committee, said: “As we know and is made clear in the report, generic medicines shortages are a very complex global issue — and with Brexit on the horizon that is likely to remain the case. We would now like to see the DHSC working with us to develop a fairer and more responsive concession system that ensures that hard-working pharmacies do not face unfair risks, and that the impact of supply problems is not passed on to them or their patients.”

Julie Wood, chief executive at NHS Clinical Commissioners, the membership organisation for CCGs, said it was “delighted” that the MPs have “recognised the clear impact the rise in generic drug prices has had on CCG budgets”.

“We have to make sure this situation doesn’t repeat itself in 2018/2019, or in future years,” she said. 

Citation: The Pharmaceutical Journal DOI: 10.1211/PJ.2018.20205594

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