Medicines can be ‘branded’ or ‘generic’. New medicines are generally marketed under their brand name and their patents are protected for around 20 years. During that time, no other company can manufacture or market the medicine. After this, other companies can manufacture and market the same medicine under its generic name, usually at a lower price. Generic medicines are commonly prescribed to patients in the community: of the £4.3 billion that the NHS spent on generic medicines in 2016–17, 81% was in primary care. Community pharmacies buy medicines on behalf of the NHS, for which they are then reimbursed. For generic medicines, the Department’s policy is to rely on competition in the market between suppliers of generic medicines to control their price. The Department does not set the price of generic medicines, but does set the amount that community pharmacies will be reimbursed by the NHS (the ‘reimbursement price’). Clinical commissioning groups pay for these medicines out of the funding they receive from NHS England. Despite being the main purchaser of these medicines in the UK, the NHS has relatively limited influence over how much they cost in what is a global market.
During 2017–18, the costs of certain generic medicines increased substantially partly as a result of two large medicine manufacturers having their production suspended because of quality issues. One example of price rises was for a mental health medicine called Quetiapine: its reimbursement price for 100mg tablets peaked at £113.10, 70 times higher than the previous reimbursement price of £1.59.
Published: 12 October 2018