Examination of witnesses (Questions 1
- 19)
THURSDAY 4 NOVEMBER 1999
MRS HELEN
MARLOW, MR
COLIN HAYTON,
MS LINDA
WHALLEY and MR
NICK SCHOLTE
Audrey Wise
1. Thank you very much. Welcome to our witnesses.
My name is Audrey Wise, I am taking the chair pro tem.
I will be slipping across and David Hinchliffe will be resuming
the chair in a while. Perhaps you would like to start by introducing
yourselves so it is in our oral record for the benefit of our
note takers. Perhaps if we start with you, Mrs Marlow.
(Mrs Marlow) Okay. I am Helen Marlow. I am the Pharmaceutical
Adviser for Croydon Health Authority. The role of my post is basically
to provide strategic advice to the health authority on clinical,
professional and policy matters relating to pharmaceutical services
and prescribing, including GP prescribing budgets.
(Mr Hayton) I am Colin Hayton, the Chief Executive
of Shropshire Health Authority.
(Ms Whalley) I am Linda Whalley, Chief Executive of
North Manchester Primary Care Group, responsible for 128,000 patients
registered with 67 GPs in 30 practices across North Manchester.
(Mr Scholte) I am Nick Scholte, the Chief Executive
of the Prescription Pricing Authority. I have been in post since
March 1999.
2. Can I just say to the witnesses that the
acoustics in these rooms are not good so think in terms of projecting,
even almost shouting. If I can kick off with a question to our
first three witnesses in particular to tell us just briefly, because
you have given very helpful written evidence, what has been the
financial impact of the recent developments in the pricing and
availability of generic drugs? Have there been any organisational
consequences?
(Mrs Marlow) In my own area—Croydon—my
PCGs are facing between a 0.92 per cent and a 3.18 per cent overspend
on their prescribing budget at the moment which is forecasting
a £500,000 overspend on a £25.5 million budget and that
is after any contingency funds we have got available. For us it
is a real concern.
(Mr Hayton) Similarly in Shropshire we are facing
a £1.6 million overspend on a budget of £42 million
when we thought we had set realistic budgets at the beginning
of the year. The effect of the costs of generics on that appears
to be significant, a 7.7 per cent increase in the volume of generics
in the year to June but a 20 per cent increase in costs, and in
particular months even more significant figures.
(Ms Whalley) Across Manchester we have an overspend
forecast at 1.7 million for primary care groups. The impact varies
between just under a third of a million at one primary care group
to just over half a million at another primary care group. All
four primary care groups are being affected both financially and
organisationally because we are having to use contingency funds
across the city as well as additional funds earmarked for investment
in primary care and hospital services as well. We envisage that
whatever outcome there is to the problem this year there will
be repercussions in the next financial year as well.
Mr Gunnell
3. I was going to ask how you imagine the present
problems you have will affect forward planning and in particular
how you think they will affect your budget setting and prescribing
next year?
(Mr Hayton) It is a serious concern in that any overspend
this year which we find almost certainly impossible to balance
this year will be a first call on any resources next year. Effectively
our development aspirations in primary care next year are going
to be prevented by having to put money into prescribing in an
unplanned way.
(Mrs Marlow) It is going to be very difficult next
year to know what level of prescribing budget we are going to
need as well as worrying about the problems of this year's overspend.
Because of the information we have available we are not very clear
of the impact of the generic prescribing problem, how long it
is going to last, if it is ever going to resort back to previous
levels and also, as I am sure a colleague here will say, there
are problems with information coming from the Prescription Pricing
Authority which are not their fault at all. This information is
vital to us in terms of our financial planning and managing our
prescribing budget and if that information is severely delayed,
which it is at the moment, it causes extra problems.
(Ms Whalley) In addition to the comments from my colleagues,
an additional problem I would like to highlight is the fact that
this is the first year in primary care of cash limited prescribing
budgets. They have been set on the basis of historic spend this
year because of the need to set realistic targets for primary
care to aim for. I think we have all tried to set budgets that
are realistic. In my primary care group we have six practitioners
who are currently forecasting an underspend but they are all very
small underspends, around about one per cent, and most of them
are under one per cent. Five of those practices all had significant
overspend in previous years. What we will see next year, when
we move away from historic spend towards more capitation based
targets, are budgets that it will be very difficult for primary
care to meet. I think in addition to the difficulties around getting
information to inform the process there is a management process
which will become much more sharply focused next year because
the pressures will become much more acute.
Dr Brand
4. I would be very interested to hear whether
there has been any effect on the motivation of GPs' primary care
groups because working hard at increasing your rate of generic
prescribing could release resources for other clinical services.
(Ms Whalley) Indeed.
5. If you find that all that hard work does
not actually deliver the goods it must be quite difficult for
you to inspire the people to continue that process.
(Mr Hayton) Certainly increasing generic prescribing
rates has been a target for all our six primary care groups and
our estimate is that we have lost the potential of a third of
the savings because of the generic price increase. As my colleague
said, primary care groups are in their first year, this is the
first year of cash limited budgets overall, and we desperately
want primary care groups to be a success and to move into next
year as a success. They are looking for developments in primary
care particularly which this financial trend may prevent them
achieving next year.
Mr Burns
6. I was just wondering when you first became
aware that this was a more serious problem than just a temporary
blip? Leading on from that, have you had any formal notification
or guidance on the problems from either the Department of Health
or the Prescription Pricing Authority? Can I wrap that up with
a question that has been alluded to in some of the earlier answers
and that is have you had any indication of how long this problem
will last?
(Mrs Marlow) I suppose it started to become apparent
as we started to get the financial statements for this financial
year's prescribing budgets, so April's financial statements probably
really started reaching us about eight weeks after the end of
April, July time. That was when it really started to become apparent.
We think it is probably three per cent of our prescribing costs.
We have had some informal discussions with our NHS Executive Regional
Office about the problem. We do not know how long it is going
to last and at the moment we have not got very much information
about how long this problem may last.
7. Can I just ask, you mentioned you had some
informal discussions, what has been the feedback?
(Mrs Marlow) Health authority pharmaceutical advisers
meet regularly with the regional pharmaceutical advisers to discuss
prescribing issues and obviously this is an issue that is near
the top of our agenda. We have been talking about the mutual problems
it is causing us, the size of the financial problems and what
we can do about it, what information we know about it. Our regional
pharmaceutical adviser has been able to feed back some information
from the NHS Executive that they have.
8. What sort of information?
(Mrs Marlow) How they are investigating it, that they
are aware there is a problem and the things they are doing about
it, information about the problems it is causing the PPA and that
they are trying to support the Prescription Pricing Authority
in managing the delay and information problem.
Audrey Wise
9. Anyone else?
(Mr Hayton) Just to reinforce that, there was no indication
this could be a problem in budget setting for this year so we
made no allowance. I do not think any other health authority has
made an allowance for this kind of trend during the year. So it
has hit us since the financial year started.
(Ms Whalley) I would like to add that it reinforces
the difficulties that we are having in terms of motivation. The
two questions are very much linked because not only do we have
the financial pressures but we have a credibility issue in a sense
in that we cannot really give any sensible explanation to the
GPs in the primary care groups as to exactly how the problem has
arisen in the way that it has and when we can expect solutions.
That in turn is undermining our efforts, quite considerable efforts,
to engage with the clinicians across the board in the activities
of the primary care group.
10. On the question of timing, there was apparently
some informal research in Birmingham which had come to light certainly
by May about the pretty hefty increases. Were any of you aware
of any of that?
(Mr Hayton) Not research. There had certainly been
discussions amongst chief executives in the West Midlands sharing
the analysis that prescribing advisers had been doing during the
summer, but I think this was largely unexpected.
Mr Gunnell
11. Have the current problems had any direct
impact on patients? Are you aware of any patients who have been
put at risk either by non-availability of the drugs that they
are on or that they regularly need or through having different
packaging?
(Ms Whalley) I can certainly say that I have information
from a number of GPs not necessarily about risk, but certainly
about confusion arising out of different packaging and the different
doses and so on that people have been having to come to terms
with. Not only is that the problem from the patients' point of
view, but it is increasing the workload within primary care because
obviously those concerns from the patients have to be addressed
as well and I think it is going to be another problem when the
availability of drugs is resolved because obviously the patients
will then have to get used to a different look of medication again.
I think ultimately it is part of the general practitioners' desire
to improve quality across primary care and that involves consistency
of care as well and in this day and age presentation does matter.
12. Patients do get used to particular drugs
in particular packaging.
(Ms Whalley) Very much so.
Audrey Wise: We do not want to neglect our witness
from the Prescription Pricing Authority permanently and Peter
has something to address to you.
Dr Brand: We had comments on the delay in the
issue of PACT data. Very kindly our witness said that it was out
of your control. I would like a little expansion on that and what
are the problems you have been getting which means that you now
face, or at least clinicians are facing, a three or four-month
delay instead of the usual six weeks.
Audrey Wise
13. Before you answer that, can I just translate
that, that "PACT" is "prescribing analysis and
cost". We do want our report to be intelligible to the wider
public.
(Mr Scholte) I will try and be brief. PACT is one
of the range of reports that we produce on prescribing habits
and cost information. It may be helpful to the Committee if I
can take you through the normal pricing procedure for generic
drugs and then explain to the Committee what the outcome of the
placement of drugs in Category D has on the PPA and our ability
to provide information in a timely manner. Generic products are
normally in Category A of the drug tariff. The reimbursement price
to the NHS determined by a basket of suppliers is two times the
wholesale price and one times the manufacture price, and there
are two wholesalers and three manufacturers. When a product moves
into Category D it is when either two wholesalers or one wholesaler
and two manufacturers declare that they have less than four weeks
of stock available for distribution. If the product moves into
Category D, the pharmacist can endorse the prescription with a
specific supplier and the PPA are obliged to reimburse the pharmacist
at the specific price for that specific manufacturer.
Dr Brand
14. Do you make any investigation as to whether
there is indeed a four week supply?
(Mr Scholte) We ask suppliers to declare their stock
position.
15. Which suppliers do you ask? Do you ask local
British suppliers? Drugs are a global market and when there were
profits to be made parallel importing was absolutely rife, and
Greek Azantac and Italian Salbutamol were the norm at one stage.
Are you actually looking at a broader availability or do you have
a very strict national criterion?
(Mr Scholte) We have a very strict criterion. We look
at the same suppliers for availability of stocks.
16. That is not the answer to the question.
Are you only looking at British manufacturers or are you looking
at the global availability of a particular drug?
(Mr Scholte) We are looking at the stock levels held
by the companies that go into making the basket which determines
the drug tariff price.
17. So those particular companies would actually
control by their activity whether a drug is in Category A or in
Category D?
(Mr Scholte) The stock level held by the three manufacturers
and the two wholesalers determines whether or not a drug is in
Category D or not.
18. So they effectively control whether something
goes into Category D or not by their rate of manufacture?
(Mr Scholte) In essence, yes.
19. And you have not really been worried about
that as a concept?
(Mr Scholte) We operate this rule as agreed some time
ago, I believe, and certainly before my time, with the Department
of Health that those are the suppliers that we should go to for
this information.
Dr Brand: Well, we will obviously have to ask
Ministers about that. It sounds like a very cosy relationship.
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