Generic prescribing

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One of the high-level performance indicators in relation to efficiency within the national performance assessment framework (PAF) is the level of generic prescribing. The thinking behind this is that the choice of generics will achieve considerable cost savings, since some branded products can cost the NHS substantially more than their generic equivalents when the patent has expired.

The increase in both prescription volume and costs over recent years (often for new drugs), has been made possible within tight budgets because of the heavy reliance on generic prescribing rather than branded drugs. But the recent higher cost of generics and the current high level of generic prescribing (approaching 80 per cent) is probably a limiting factor.

NHS influencers should be aware that several PCTs have voiced their concern over the introduction of line extensions following patent expiry. Fareham, Gosport, Portsmouth and Hampshire PCTs wrote to several companies in 2002 warning that educational collaboration with them might be in jeopardy if they continued to introduce new forms of metabolites and stereoisotopes before patents expire.

In the letter, the PCTs made it clear that assumptions concerning generic costs in the future were essential to balancing their budgets:

‘The NHS does not have the capacity actively to sustain the market for branded products past the patent expiry period. Indeed, the decision about the amount of money made available for prescribing in primary care is based on the assumption that savings are realised when popular drugs become available as generics’, they wrote. NHS influencers need to be aware of this type of sentiment.

NHS influencers should also note that in September 2003 the DH published its final thoughts for consultation on a new system of reimbursing the cost and supply of generic medicines. At the same time the Department also issued a consultation on the next five year Pharmaceutical Price and Regulation Scheme (PPRS) scheme from 2005-10. Annexe B contains the results of a study into the extent of competition in the supply of branded medicines to the NHS and the executive summary is worth examining. Amongst the stakeholder groups that the government took soundings from before the more formal renegotiations started were NHS management — particularly SHA, acute trust and PCT chief executives. As such the content of this documentation should be of interest to NHS influencers. The new PPRS scheme starts in January 2005 and the final agreement, includes a mandatory 7 per cent price cut. See Wellard’s NHS news, November 2004