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Reaction to the Health Service Medical Supplies (Costs) Bill

Warwick Smith, Director General of the British Generic Manufacturers Association (BGMA), said: 
“We understand the Government’s desire to monitor and control the prices of NHS medicines where they are not effectively limited by competition. But we must recognise that the UK benefits from one of the most competitive generic medicines markets in Europe delivering some of the lowest prices available. Generic competition saves the NHS more than £13billion every year, increasing access by allowing more patients to be treated as a result. Allowing flexibility of pricing ensures that the market attracts numerous suppliers, which in turn maintains downward pressure on prices as manufacturers compete for market share.
“Prices of generic medicines controlled by competition in this way has been a core element of the UK’s success, often reducing factory gate prices by 90% or more compared with the original branded equivalent. It is important that the success of the UK’s arrangements in delivering these very low prices across a large number of products is not undermined by action designed to deal with recent price increases in 1% of generic medicines, which may or may not be justified.  Experience in other markets that lack flexibility due to more rigid price setting policies shows that shortages of medicines are more common, putting patient care at risk, and as well as delivering prices that are on average higher than in the UK.
“Where competition is not controlling prices, our arrangements provide for the Department of Health to intervene and if necessary they can refer cases to the Competition and Markets Authority. We need to make this intervention work effectively in these rare extreme cases and not put at risk a system which generally works extremely well for patients and the NHS.”