NHS "wasting L500M on drugs" claim

A UK Member of Parliament has claimed that the National Health Service has wasted over L500.0 million ($891.2 million) on drugs, by not switching to cheaper generic products when patents have expired. The claim is dis-missed by the Department of Health and the Association of the British Pharmaceutical Industry. The heart of this dispute appears to be the central government's payment system for pharmacies.

The Prescription Pricing Authority introduced a new pay-ment system in April 2005 which, according to the Depart-ment of Health, reduced "generic drug costs by L300.0 million in 2005/6. The new arrangements will ensure that reimbursement prices of generic medicines reflect market prices after patent expiry and offer good value to the NHS."

However, the Department of Health also states that prices "reflect the average manufacturers' market prices after discount, but continue to leave a margin of unrecovered discount of L500.0 million as part of the overall funding of L1.77 billion necessary to provide services for patients through community pharmacy." A spokesman at the PPA, speaking to the Marketletter, denied that its payment sys-tem was effectively subsidizing local pharmacies.