Select Committee on Health Appendices to the Minutes of Evidence


APPENDIX 12

Memorandum by Dr David Purdy Nene Valley NHS Primary Care Group (GD 15)

LOCAL IMPACT OF INCREASES IN THE COST OF GENERIC DRUGS

  I am aware that parliamentary questions have been tabled in relation to current shortages in the supply of some commonly prescribed generic drugs, and that the Health Select Committee has launched an enquiry. I therefore thought that you would welcome some information related to the impact of this shortage locally, in terms of projected overspending against drug budgets in 1999-2000.

  The shortage of generic supply in the market has resulted in us experiencing significant price rises for a number of commonly prescribed drugs. For example, Frusemide, which is commonly used in the treatment of cardiac failure has risen in price by over 750 per cent since April.

  Some generic drugs are currently so scarce that even if a GP prescribes them, they cannot by obtained and therefore have to be dispensed by the pharmacist in branded form, thereby increasing overall prescribing costs. For example, metronidazole, commonly used to treat a variety of infections is currently unavailable and is therefore often dispensed as Flagyl, which is 759 per cent more expensive.

  What these shortages and cost increases mean locally is that this PCG is facing an overspend on its prescribing budget of, if current forecasts prove accurate, anything up to £137,000. Across Northamptonshire, the total overspend is projected to be around £1 million. This is despite quite strenuous efforts by GPs to increase the cost effectiveness of their prescribing, without which the overspend would be much higher.

  The situation is not helped by significant and increasing delays at the Prescription Pricing Authority in reporting expenditure to PCGs. The delay is such that we have only just received expenditure related to prescriptions written in July.

  The county's financial recovery plan to save £5 million was undertaken before the problems with generics emerged. The generic shortage adds an additional £1 million of cost pressure to this figure, unless prices ultimately fall back to their previous level, if and when the supply problems are resolved. I am chairing a countywide Project Group looking at modernising prescribing practice in Northamptonshire, and although we are hopeful of making some significant cost savings from this work, these will be wiped out by the current level of overspending.

  This PCG, like others across the county, is doing a lot of good work to improve cost effectiveness and drive up quality in primary care through clinical governance. There is a real risk that if the generic problem is not resolved quickly, then the push to modernise the NHS in our area will be slowed down by both the loss of available revenue, and the loss of support and commitment from local professionals who will have seen their efforts come to nothing, as a result of something which is outside of GP, PCG, or Health Authority control. Essentially, the current year drug budgets are unmanageable and the emphasis is on damage limitation.

  I am aware that the Department of Health are looking in to the problem at national level. However, even if the situation were to be resolved today, there will be significant cost overruns in 1999-2000, that will need to be funded, both locally and across the country from 2000-2001 budgets, because, as I understand, no new money is likely to be forthcoming in this financial year.

  I hope that this letter provides you with useful background to the problems we currently face. Please do not hesitate to contact me, if you would like any additional information related to this issue.

4 November 1999




 
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Prepared 21 December 1999