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Chisholm welcomes launch of generic medicine discussion paper and maximum price scheme review
23/07/2001
Proposals for the future supply and reimbursement of generic medicines - which play a key part in treating patients, were issued today by the Scottish Executive.
The move forms part of a UK-wide commitment to ensure a secure supply of these medicines and obtain value for money for the service.
Announcing details of the discussion paper, Deputy Health Minister Malcolm Chisholm said:
"The growth in the use of generics, medicines without a brand name, has been a real NHS success story. Generic prescribing has increased steadily in recent years and now stands at over 60 per cent of all drugs dispensed in the community, providing real value for money to NHSScotland.
"Both the UK Government and the Executive is committed to maintaining that success. But to do so we must have a secure supply of generic medicines, and ensure value for money for the £80m a year which NHSScotland spends on generics within primary care.
"The proposals which we are launching today follow our increasing concern over steep price increases and supply problems in the generics market in 1999. This led the UK Government to commission a fundamental review of the generics market from Oxford Economic Research Associates (OXERA) - work which has formed the basis of our discussion paper proposals.
"As an interim measure, a statutory maximum price scheme was put in place last year for the main generics used in the community. However, it is now clear that neither these measures, nor existing supply and reimbursement arrangements are sufficient to enable the NHS to reap all the benefits of a competitive market - where it exists - and in some cases may allow excessively high margins to continue.
"The existing system is also unable to give NHSScotland a true indication of the exact cost of the generics it pays for and may not make the best use of the NHSScotland purchasing power. We hope that our discussion paper will help us address those issues and open up a wide-ranging debate involving all groups with a knowledge of the supply chain - community pharmacy contractors, wholesalers, manufacturers and patients themsleves, on the best way ahead.
"Neither the UK Government nor the Executive has any preconceived ideas of what that may be - but what we do want to ensure is that any decisions taken meet our objectives of delivering security of supply for our patients and value for money for the NHS."
The discussion paper puts forward two main options -
- a 'reform option' whereby current procurement arrangements, in which community pharmacists purchase generics on behalf of the NHS and are then reimbursed, would be left intact but the basis on which reimbursement prices are calculated would be changed. This would also potentially include an element of statutory price control.
Or the introduction of central purchasing, through competitive tendering, replacing existing procurement arrangements.
To coincide with the discussion of these options, all interested parties are being asked to contribute to a review of the present maximum price scheme. Subject to the outcome of the review, that scheme will remain in place pending decisions on the longer term.
BACKGROUND
1. The proposals which we being launched today follow our increasing concern over steep price increases and supply problems in the generics market in 1999. These concerns were highlighted in a report by the House of Commons Health Select Committee (The Cost and Availability of Generic Drugs to the NHS; December 1999).
2. The price at which generic medicines are sold is reserved to the UK Parliament. However, the level at which community pharmacists are reimbursed for the generic medicines they supply to patients on behalf of NHSScotland is a matter for the Scottish Parliament. The Scottish Executive has worked closely with the Department of Health in England on the development of discussion paper and will consult fully before any changes are implemented.
3. Under EU Law, the UK Government is required to start a review of the generics maximum price scheme no later that a year after its introduction - i.e. by 3 August 2001 and to announce the outcome within 90 days. The consultation letter will recommend that the prices are left unchanged.
4. The Scottish Executive is today issuing copies of the proposals to the professional and patient bodies and to the members of the Health and Community Care Committee of The Scottish Parliament.
News Release: SE1741/2001
23 Jul 2001