NPA responds to National Audit Office (NAO) report into spending on generic medicines

08 Jun 2018

The National Audit Office (NAO) has today issued a report about its investigation into NHS spending on generic medicines in primary care.

During 2017, the prices of certain generic medicines purchased by pharmacies for the NHS increased unexpectedly, placing what NHS England described as a “significant unbudgeted pressure” on clinical commissioning groups.


The NAO investigation sets out the possible causes of the price increases from 2017-18 and how the Department of Health and Social Care (DHSC) and NHS England responded in order to maintain the supply of generic medicines for patients and manage spending.

The Department identified a range of supply-related and other factors which may have driven the 2017 price increases.

It also identified increases in manufacturers’ prices and unexpected growth in wholesalers’ margins in 2017, which it could not fully explain.

Andrew Lane, chair of the NPA’s policy and practice committee, said:

“Independent pharmacy contractors have had a torrid time because of increased generic medicines prices.

“We have displayed professionalism and great patient care by continuing to supply patients promptly – dispensing in good faith every time with the hope that we will be paid adequately for the items dispensed.

“Pharmacists have put patients first throughout all this, spending many extra hours hunting down supplies, to ensure continuity of therapy is maintained.

“Most independents cannot buy bulk stock in advance, so are particularly vulnerable to price instability.

“At a time of deep cuts in pharmacy remuneration, the uncontrolled and unpredictable purchase costs hiked up working capital and many pharmacies have had to seek overdrafts at higher than normal costs.

“It adds insult to injury that independents will face a claw back of profit they were unlikely to have made in the first place, as clawback is applied evenly across the contractor network.

“Smaller pharmacy contractors will yet again get squeezed from both ends.

“Lessons must be learnt from this difficult period and pharmacists must be better supported to maintain a quality medicines supply service.”

DHSC will have new powers – expected to come into force in July 2018 – to control the price of generic medicines and obtain sales and other information from manufacturers and wholesalers.

The new legislation will also introduce mandatory information-sharing arrangements.