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Commissioners hit by rising generics costs

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Why are generics costs rising and how will it affect commissioners?

Clinical commissioning groups (CCGs) are claiming generic drug prices have increased significantly and are likely to pose a ‘significant financial risk’ this financial year.

Commissioning leaders are reported to have told Health Service Journal editors that the total additional cost could run into more than £1m per CCG. However, an estimate presented to NHS England’s board in November suggested the overall increase could amount to £50m.

The reasons for the rise in prices are said to be unclear, but are likely to include the fall in the value of sterling since the Brexit vote and the reduced number of manufacturers.

Another factor is that dispensaries have been able to buy generics at low prices in recent years.

British Generics Manufacturers Association director general Warwick Smith told HSJ that with narrow profit margins on generics sales in the UK, this country is not going to be at the top of the list to receive products if supplies are short.

Ingredients prices are in dollars and Euros, he said.

He also added that the principle reason for price hikes had been regulatory action against four manufacturers that had stopped production of some medications.

Other CCG leaders said NHS England and the Department of Health were considering how to reduce the risk faced by CCGs.

Further information

HSJCCGs facing ‘significant financial risk’ after generic drug price surge