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‘Unprecedented rise’ in concessionary price requests in 2017-18, say Government auditors


By Beth Kennedy

08 Jun 2018

There was an ‘unprecedented rise’ in the number of concessionary price requests from contractors in 2017-18, Government auditors have revealed.

 

These rocketed from fewer than 150 a month before May 2017 to a peak of 3,000 in November of the same year, according to a report by the National Audit Office (NAO) published this morning (8 June).

 

The Department of Health and Social Care (DHSC) granted a whopping 709 price concessions in 2017-18, up from just 282 the previous year, the report said.

 

The rise in concessionary prices were caused by ‘significant’ increases in the prices of certain generics, some of which increased more than tenfold. For example, at its highest price, the DHSC set a concessionary price for Quetiapine 100mg tablets at £13.10 – 70 times more expensive than the previous set price of £1.59.

 

Steps to maintain generics supply

 

The DHSC identified a number of contributing factors to the price increases during this period – some of them supply-related.

 

It took ‘a number of’ actions to maintain the supply of generics, including liaising with manufacturers to check on supply levels, permitting one manufacturer whose license was suspended to supply certain ‘critical’ medicines and releasing supplies of one medicine from a centrally held emergency stockpile, the report said.

 

The DHSC received intelligence informing it about how supply issues were affecting patients’ ability to obtain certain medicines, although it did not know how many patients had experienced problems in getting their prescriptions, the report said.

 

 

‘Unexpected growth’ in wholesalers’ margins

 

The NAO also identified increases in manufacturers’ prices and ‘unexpected growth’ in wholesalers’ margins in 2017, which it said it could not ‘fully explain’.

 

The DHSC’s analysis also suggested that the concessionary prices it granted were set ‘higher that necessary’ above wholesalers’ prices, which resulted in an additional £86.3m in costs in 2017-18, according to the report.

 

It expects this sum will be ‘recouped in subsequent years through the established reimbursement mechanisms’.

 

However, the Pharmaceutical Services Negotiating Committee (PSNC) told The Pharmacist it ‘does not recognise’ this figure.

 

‘Significant unbudgeted pressure’

 

The generics price increases resulted in ‘significant’ unforseen costs for clinical commissioning groups (CCGs), which the NAO estimates spent £315m on concessionary prices in 2017-18. In May, NHS England reported an unaudited end-of-year deficit totalling roughly £250 among CCGs, which was partly attributed to spending on concessionary prices.


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