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Drug Tariff entry

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Dear Department of Health and Social Care,

The remit of the Drug Tariff is to use competition to encourage lower prices and create an incentive for pharmacy contractors to procure in a manner that is cost- effective for the NHS. The decision for inclusion being made by the Secretary of State. This being the case how is it possible that an identical product to another (minor differences in excipients only) is not included in the drug tariff despite being £84 cheaper than the alternative brand. The specific product included in the Drug Tariff is Aceteff (acetylcysteine 600mg) 30 tablets (Dunelm) £89.50 Part VIIIA (C), the alternative Nacsys (acetylcysteine 600mg) 30 tablets (Atlantic Pharma) £5.50 is not included in the drug tariff.
The tax payer has therefore being paying over £84 more for a generic prescription for over 12 months with the pharmacist potentially making a significant profit if dispensing Nacsys against this prescription. This is unacceptable given the cost pressures on the NHS.
What is the process for determining inclusion of products in the Drug Tariff?
Is there a process (and what is it) to identify where cheaper identical products are available to ensure these are included in the tariff as a priority?

Yours faithfully,

Mr Vijay Singh

Dear Department of Health and Social Care,

I have now updated my contact details as requested.

Yours faithfully,

Vijay Singh

Department of Health and Social Care

Our ref: DE-1161674

 

Dear Mr Singh,
 
Thank you for your correspondence of 3 January about the Drug Tariff.  I
have been asked to reply.

 

I appreciate your concerns.

 

The Freedom of Information Act only applies to recorded information such
as paper or electronic archive material.  As your correspondence asked for
general information, rather than requesting recorded information or
documentation, it did not fall under the provisions of the Act.

 

The reimbursement price of Category C products is based on a particular
proprietary product, manufacturer or supplier.  However, the pharmacist is
not required to dispense that brand.  Where they have supplied the
cheapest product for which a much higher price has been reimbursed, this
allows them to retain margin.  However, any margin is potentially captured
and it contributes to Community Pharmacy Contractual Framework (CPCF)
funding.

Funding for pharmaceutical services under the CPCF is paid to pharmacy
contractors in fees or allowances and medicine margin.  In 2018/19 the
margin, which contributes to funding, is £800 million.  The element of
margin in the funding arrangement encourages contractors to purchase cost
effectively.  

 

The Department assesses the medicine margin achieved by pharmacy
contractors through a medicine margin survey. The difference between the
medicine margin found in the margin survey and the medicine margin
available to contractors as part of the CPCF determines whether there
should be any adjustments to payments to community pharmacies.  If too
much medicine margin is generated, downward adjustments are needed and if
insufficient margin is delivered, upwards adjustments are needed.

Therefore, securing the lowest Part VIIIA reimbursement price is not
always critical to ensuring the NHS gets value for money, but it is
important to have a reimbursement price listed in Part VIIIA. This gives
contractors an incentive to source the cheapest product they can, allowing
them to earn margin as part of the CPCF funding for pharmaceutical
services.

I hope this reply is helpful.

Yours sincerely,
 
Natasha Dixon
Ministerial Correspondence and Public Enquiries
Department of Health and Social Care

 

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