Background to the report
During 2017, the prices of certain medicines purchased by pharmacies for the NHS increased unexpectedly, placing “significant unbudgeted pressure” on clinical commissioning groups, according to NHS England. In 2017-18, the net spend on the affected medicines totalled an estimated £315 million, seven times greater than the equivalent spend in 2016-17. During 2017-18, the costs of certain individual medicines increased more than tenfold.
The medicines affected by these price increases were ‘generic’ medicines. Medicines can be ‘branded’ or ‘generic’. Branded medicines are medicines sold under the name given by the company that made them. New medicines have patents that are protected for a minimum of 20 years, and are generally marketed under their brand name. At the end of this period, other companies can manufacture and market the medicine under its generic name, typically selling it at a lower price. In 2016-17, the NHS spent an estimated £4.3 billion, or 28% of total medicine expenditure, on generic medicines.
Content and scope of the report
This investigation focuses on primary care, where most spending on generic medicines is incurred, and it sets out the facts in relation to:
- NHS spending on generic medicines, and the 2017-18 increase in spending on certain generic medicines;
- Possible causes of the price increases in the market for generic medicines; and
- How the Department of Health & Social Care and its arm’s-length bodies responded to the price increases.