The House of Commons health select committee's report on generic prices - implications for primary care prescribing

Abstract

This article considers the House of Commons health select committee report into generic drug prices along with the recent short-term proposals by the Government to control prices. The article focuses on the reimbursement system for pharmacists as the main factor in the steep price rises and their sustained high levels. The challenge for the Government will be to design a reimbursement system that avoids the perverse incentives of the current system and encourages the regular supply of cost-effective generic medicines. Since the early 1990s numerous attempts have been made to increase the rate of the prescribing of nonproprietary, generic drugs in National Health Service general practice. Although substantial savings were generated through increased generic substitution during the early and mid 1990s, a rapid growth in the prices of many non-proprietary products during the last 18 months of the decade has threatened to add £200m to the annual NHS drugs bill.1 In response, the House of Commons Select Committee on Health 1 undertook an inquiry into the price of generic drugs. This confirmed that prices of some generic drugs had increased by over 500 per cent over the year to September 1999. The select committee reported in December, 1999, that increases in generic prices had been caused by problems related to (i) the supply of generic products associated with the closure of one manufacturer and the relocation abroad of two others, (ii) the switch from bulk supply of drugs to individual patient packs as required by European regulations, and (iii) operation of the drug reimbursement system. The committee concluded that “it would be extremely unfortunate if the success of the PCG [primary care group] initiative was undermined by sharp and unpredictable rises in drugs budgets”.