Page 35 - P4304.1-V91_PS-Magazine-November 2023 PRINT

The cost of medications plays a crucial role in determining accessibility and
affordability for the NHS. Generic pricing, the Drug Tariff, and concessions are all
key components of the intricate pricing system that governs the pharmaceutical
industry.

Generic Pricing
Generic drugs are pharmaceuticals that are equivalent to brand-name drugs
in terms of quality, safety, and efficacy but are marketed under their chemical
names. Generic drugs are typically much cheaper than their brand-name
counterparts, making them a cost-effective option for healthcare systems.

The pricing of generic drugs is influenced by various factors, including competition
among manufacturers, production costs, and regulatory requirements. When a
brand-name drug’s patent expires, other pharmaceutical companies can produce
generic versions, leading to increased competition and lower prices.
The Drug Tariff (England & Wales and Scotland)
The Drug Tariff is a vital resource for any NHS dispensing organisation. Amongst
other roles, it serves as a comprehensive list of generic medications and their
prices, which are agreed upon between the government and pharmaceutical
manufacturers/wholesalers. The Drug Tariff helps standardise generic pricing
across the NHS, ensuring that healthcare providers, such as dispensing doctors
and pharmacists, are reimbursed fairly for the generic medications they dispense.
The Drug Tariff is regularly updated to reflect changes in the pharmaceutical
market, including the introduction of new drugs and changes in pricing for existing
ones. This system helps maintain transparency and stability in drug pricing,
managing costs for the NHS. The price listed in the drug tariff of the month of
dispensing is the price you will be reimbursed for that item.
Concessions
Concessions are mechanisms within the drug tariff system that help address
temporary disruptions in the supply chain of pharmaceuticals or unexpected price
fluctuations. When the cost of certain medications rises significantly or when
they become temporarily unavailable, dispensing doctors or pharmacists may
face financial challenges in maintaining the supply of these essential drugs.
To address such situations, the NHS may offer concessions to dispensing
agencies. These concessions involve providing additional funds or reimbursement
to cover the increased costs of acquiring medications during the disruption or
price surge. Concessions play a vital role in ensuring that patients continue to
have access to their required medications, even in challenging circumstances.
Concession prices are published monthly at the end of each month, once actual
prices charged by main wholesalers and manufacturers have been analysed. The
concession price for an item should cover the elevated purchase costs with a
margin added. This is usually the case but not always and here lies the reason for
all your anxieties.
My personal take on concessions has always been not to worry about them! It
is not in the interest of the NHS to underpay you as given we are all in the same
boat, everyone would go out of business and where would that leave prescription
services in the UK? However, there is nothing wrong in being able to identify
supplies you have made that do remain above concession price, just in case you
can do something to reduce your loss.

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