In 2017 drug price rises led to a £250m overspend ©Tyler Olson/
In 2017 drug price rises led to a £250m overspend ©Tyler Olson/

MPs worried over post-Brexit drug supply

15 October 2018

The effects of historic drugs shortages mean the government urgently needs to show how it will secure the medicine supply chain after Brexit, MPs have said.

Citing a 2017 incident when patients had difficulty getting medicine because unexpected price rises hit supply chains, the Public Accounts Committee (PAC) said the government must show it knows how it would deal with a similar situation after leaving the EU.

The MPs said despite new powers awarded to the Department for Health and Social Care (DHSC), which came into effect in June to deal with such a scenario, they were not convinced the department had a clear plan on how to use these powers.

Nor could DHSC assure the committee of its plans to safeguard the supply of medicines after Brexit, which is “worrying given that this exit is fast approaching,” they said.

After prices rose for certain generic medicines last year, NHS England admitted that the subsequent £250m overspend was a direct result of the incident.

In a report, the committee found there were “clear signs” that prices of certain medicines were increasing from June 2017, but the department failed to take any action to manage costs until November.

The department would depend on this same process to take action should future pricing issues arise, it added.

“The impact of last year’s generic drug price increases should have served as a wake-up call to government,” said PAC chair Meg Hillier (Labour).

“Difficulty obtaining medicines left patients frustrated and distressed and pharmacists faced additional pressures to secure medicines in short supply.

“Yet while the Department of Health and Social Care now has new powers at its disposal, it could not explain to us how these will better enable it to handle similar price increases and related shortages in future.

“This is unacceptable and doubly worrying in the context of uncertainty over supply chains after Brexit, particularly for medicines with a short shelf life.

“Government cannot afford to drag its feet on this critical issue, either now or after Brexit.

“By the end of this year we expect it to demonstrate it has a clear plan to ensure patients can access the medicines they need, and to mitigate the impact of price rises on desperately stretched NHS resources.”

In August, a pro-remain campaign group warned that plans to stockpile six weeks’ worth of vital medicines to avoid supply disruptions caused by a no-deal Brexit could cost as much as £2bn.

Health secretary Matt Hancock wrote to healthcare providers saying his department would “ensure the UK has an additional six weeks supply of medicines” by the March 2019 exit date, “in case imports from the EU through certain routes are affected”.

But citing research by think tank the King’s Fund, campaign group Best for Britain suggested the temporary stockpile could cost up to £2bn.

Earlier, in July, an NHS procurement head told SM concerns over a medical supply shortage in the case of a no-deal Brexit were no more than “scaremongering”.

Alan Hoskins, procurement director for NHS South of England, said the UK already had “certain products and drugs that are stockpiled for a pandemic,” and that Brexit contingency planning was “nothing different to what we deal with on a regular basis”.

New powers on medicine prices

DHSC acquired new powers to collect information about the market for generic medicines under the Health Service Medical Supplies (Costs) Act 2017. These came into effect in June.

DHSC has published legislation to explain the powers, removing a loophole which allowed some suppliers of generic medicines to dodge the regulations, which now allow health secretary Matt Hancock to step in and limit prices.

Companies are now legally compelled to provide Whitehall with information on the medicines they sell, including pricing, replacing the previously voluntary arrangements.

But the PAC was “concerned” to hear that some companies can give DHSC “reasonable estimates” of how much they buy and sell medicines for, rather than actual figures, potentially limiting the accuracy of the information.

Companies are also required to tell government if they intend to stop supplying medicines, or expect a supply shortage.

But, the report said, this only applies if the company itself judges that its actions will affect patients.

The committee said the government had “admitted that while the legislation increases its powers it is not the whole answer”.

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