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REIMBURSEMENT PRICES FOR FOUR GENERIC MEDICINES

Lord Warner, Health Minister, today announced proposals to reduce the reimbursement price paid to community pharmacy contractors and dispensing doctors for a limited number of medicines from 1^st December 2003. This letter seeks comments on these proposals by 7^th November.

Reimbursement price of doxazosin, omeprazole, lisinopril and simvastatin

The current system for calculating the reimbursement prices for generic medicines is based on prices supplied to the Prescription Pricing Authority (PPA) by two wholesalers and three generic manufacturers.  The PPA use the prices supplied to calculate a list of reimbursement prices known as the Drug Tariff. On the most frequently prescribed generic medicines community pharmacy contractors and dispensing doctors are able to obtain a discount on the reimbursement price from suppliers.  The system also provides for a periodic Discount Inquiry to recover some of the difference between Drug Tariff prices and the procurement prices available to community pharmacy contractors and dispensing doctors.  The last Discount Inquiry was undertaken in October 2000.

Generic versions of the medicines listed below have only become available during 2002 and 2003 and therefore the margin available on these medicines is not part of the current discount recovery calculation.

                        Doxazosin

                        Lisinopril

                        Omeprazole

                        Simvastatin

There are currently significant differences between the reimbursement prices and the procurement prices available to community pharmacy contractors and dispensing doctors for most presentations of these medicines

On 2^nd September the Department of Health published a consultation document "Arrangements for the Future Supply and Reimbursement of Generic Medicines for the NHS".  Subject to the outcome of the consultation the Department intends to implement the new arrangements from April 2004.  It is not appropriate to undertake another Discount Inquiry at this time which could take account of these margins in a revised level of discount recovered, because the results of such an Inquiry would not be known until after the new system had been introduced.

Ministers are committed to introduce a new system for generic medicines that achieves the objectives set out in the "Arrangements for the Future Supply and Reimbursement of Generic Medicines for the NHS".  At the same time it is important that until the new arrangements are introduced, the NHS obtains reasonable value for money from the existing reimbursement system. The Department of Health has concluded that the present margins available on simvastatin, omeprazole, doxazosin and lisinopril do not meet this objective.

As a result the Department proposes to reduce the reimbursement prices of simvastatin, omeprazole, doxazosin and lisinopril reimbursed to community pharmacy contractors and dispensing doctors from 1^st December 2003. The reimbursement prices that the Department proposes to implement from 1^st December 2003 are set out in Schedule1 attached.  Thereafter the Department will keep the reimbursement prices of simvastatin, omeprazole, doxazosin and lisinopril under review and may consult on further changes if appropriate.

You are invited to make representations on the above proposals by sending your comments and views either in writing to:

            Eunice Barnor

                        Room 138A

                        Department of Health

                        Richmond House

                        79 Whitehall

                        London

                        SW1A 2NS

Or by Email entitled Reimbursement Prices of Four Generic Medicines to: generics@doh.gsi.gov.uk to arrive no later than 7^th November 2003. 

 A list of the organisations being consulted on this proposal is at schedule 2 attached.

Yours sincerely

DR FELICITY HARVEY

Head of Medicines, Pharmacy and Industry Group

                                                       SCHEDULE 1

                               SCHEDULE 2

LIST OF RECIPIENTS OF THIS CONSULTATION DOCUMENT

British Generic Manufacturers Association

British Association of Pharmaceutical Wholesalers

British Association of European Pharmaceutical Distributors

British Association of Generic Distributors

Pharmaceutical Services Negotiating Committee

Association of the British Pharmaceutical Industry

The Consumers’ Association

Dispensing Doctors' Association

Primary Care Trusts’ Chief Executives in England

Health Authorities’ Chief Executives in England

General Practitioners Committee - British Medical Association

The Patients Association

National Pharmaceutical Association

Royal Pharmaceutical Society of Great Britain

Company Chemist Association

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This page last amended on 10 October  2003