The NHS is wasting around £200million a year on over-inflated drug prices because officials haven’t used their powers to crack down on rip-off merchants.
Prices of some medicines have rocketed by up to 12,500 per cent by manufacturers because of a loophole that means the health service will still buy them.
Some 70 generic medicines were found to have had their prices hiked in 2016, and only 19 of those have had big price reductions since.
This is despite the Department of Health and Social Care having had the power to impose a lower price for 18 months, to avoid wasting taxpayer money.
Although the Government has reportedly used its powers to control drug pricing to save the NHS £150 million a year, the health service could still be forking out more than £200m to cover the costs of medicine manufacturers hiking their prices for profit
The NHS was found to be overspending on drugs by £370million two years ago, after an investigation by The Times.
And it has since reportedly cut this total by around £150million, suggesting more than £200million is still being wasted.
One over-priced steroid medication had its price hiked by 12,500 per cent from 70p in 2008 to £85 in 2016 – it is unclear if this has been reduced since.
The Times has exposed how medicine companies are working in a loophole in rules on pricing.
Although branded medications have a limit to how much companies can make off them, unbranded drugs do not.
This means the prices of these unbranded drugs can be decided entirely by the manufacturer, which can put them high as it wants.
The DHSC has the power to force companies to lower their prices if they’re not value for money.
One company, Atnahs, raised the price of seven of its drugs by up to 2,600 per cent and, because it was the only UK supplier, they were still bought by the NHS.
One of its drugs, an antidepressant called doxepin, shot up from £5.71 a pack in 2013 to £154, which it still costs today.
And Concordia International, another NHS supplier, is now charging £29.06 for eye drops which cost £2.09 in 2016.
An antidepressant sold by Concordia has increased in price from £9.57 to a staggering £386.53 – a rise of 3,939 per cent, which it is allowed to do because the drug is unbranded.
HOW DOES THE NHS BUY MEDICINES?
The NHS spent approximately £17.4 billion on medications in 2017, a figure which has been growing by an average of five per cent a year since 2010.
For a medicine to be funded for the NHS, it first has to be approved by the National Institute for Health and Care Excellence.
New medicines then have to have a budget impact test to make sure it is worth the money a pharmaceutical company is charging for it.
How many people will take the drug, the condition it is used to treat, and what alternative treatments are available are all likely to be considered.
After NICE has decided who should be eligible for a medication and has confirmed how much it will cost, the health service can choose to buy it.
NHS England can negotiate directly with suppliers if a drug is going to cost more than £20 million a year during any of the first three years of its use.
In this way, the NHS may be able to secure drugs for below their market rate.
The NHS has also ruled that low value medicines and those which are widely available in shops should not be offered on prescription.
Earlier this year it was revealed laxatives, sun cream, wart treatments, cough mixture and diarrhoea therapies would no longer be funded by the NHS for most patients.
Source: The King’s Fund
The brand name of drugs can be dropped when the patent – exclusive rights to the recipe – has expired, a process which usually takes at least 20 years in the UK.
After this, other companies are free to make and sell their own versions of the same medication – these are called generics and a loophole in NHS pricing rules means companies can charge whatever they want for them.
For example, when the patent expired on Viagra, other companies started making exact copies of the pills but selling them for less money, undercutting real Viagra.
But when a company becomes the only one making the generic, that element of competition is removed and prices can be hiked to extortionate levels.
A spokesperson for the DHSC spokeswoman said ‘the overall spend on generic medicines went down compared to last year’.
And a representative for Atnahs Pharma told The Times the firm’s pricing is ‘competitively benchmarked’.
Concordia International added ‘the government may not see a need to use these prices controls’ because it believes the system works well.
The lucrative activities of companies making money off the NHS loophole, including Atnahs Pharma, were exposed in 2016.
Four companies exposed at the time by The Times had been found to be buying out-of-patent drugs which were no longer considered profitable by big pharmaceutical companies.
They then bought the marketing rights, dropped the famous names and used the unbranded technical name of the drug to bypass NHS pricing controls, it is alleged.
Among the 32 drugs having their prices hiked were:
- 10mg tablets of steroid Hydrocortisone – up by 12,500 per cent from 70p in 2008 to £85 in 2016.
- 50mg of anti-anxiety drug doxepin up from £5.72 to £154 a packet between 2011 and 2016.
- Cyclizine 30mg tablets, used to treat nausea, up from £9.57 to £353.06 a packet.
The four businesses, two of which were linked to the same two brothers who run the global firm Atnahs, were raking in a reported £262 million a year at the time.