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Petition Create a publicly owned manufacturer for off-patent, generic drugs in the UK

Establish a national UK manufacturer of essential, off-patent, generic medicines (such as hydrocortisone, liothyronine or insulin) within the NHS. Make these medicines at close to production cost, in order to prevent the unethical practice of price gouging.

More details

These off-patent, non-branded (generic) medicines can be made very cheaply but the NHS often has to pay very high prices for them because some companies are “price gouging” (http://gouge.co.uk). The CMA has fined some companies, but several years too late, and hospitals can be forced to cut other services to pay for essential drugs. Introducing competition could help reverse this, increase employment in the UK, and guarantee a secure supply of these drugs (particularly important post-Brexit).

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Government responded

This response was given on 23 December 2021

This Government takes excessive pricing very seriously. For generic medicines, we rely on competition to drive down the selling price. This has led to some of the lowest prices in Europe.

This Government appreciates the important points raised in this petition and would want to assure the 10,000 plus signatories, that we take excessive pricing very seriously. While we have no current plans to create a publicly owned manufacturer for off-patent, generic drugs in the UK, we agree that it is important for NHS patients to have access to affordable medicines.

Price

Medicines spend accounts for a significant proportion of the NHS budget. The total. A large part of the NHS budget is spent on medicines, with total expenditure on medicines in England by the NHS estimated at £16.7 billion in 2020/21. The Department of Health and Social Care (DHSC) has various mechanisms to reduce that spend. For unbranded, also known as generic medicines, DHSC relies on competition to keep prices down which has led to some of the lowest prices in Europe. At the same time we have relatively resilient supply. This allows prices to react to the market. For example, in an international market, this ensures that when demand is high and supply is low, prices in the UK can increase to help secure the availability of medicines for UK patients.

However, there are instances as the petition has rightly highlighted, where there is little competition, or competition is not working effectively, and as a result, the NHS is paying prices for generic medicines that are higher than expected.

NHS England and NHS Improvement’s (NHSE&I) Commercial Medicines Unit (CMU) has multiple strategies in place to deliver a sustainable, competitive market providing value for money and security to the supply chain. For medicines that are not on CMU frameworks, local procurement teams review alternatives that are available.

In addition, the Competition and Markets Authority (CMA) is an independent, non-ministerial department, ensures that consumers get a good deal when buying goods and services, and that businesses operate within the law. It takes action against businesses and individuals engaged in anti-competitive conduct. Where companies are found by the CMA to be in breach of the legislation, DHSC considers seeking damages.

The CMA has opened several investigations into pharmaceutical companies' suspected breaches of the Competition Act 1998. These investigations have resulted in large fines for companies found to be abusing their dominant position by charging excessive and unfair prices, e.g. in relation to hydrocortisone tablets and liothyronine tablets.

Security of supply

Not all medicines can be or are made in the UK and some active ingredients for medicines that are made in the UK, have to be imported, so it’s important to recognise the global nature of supply chains and to ensure the free flow of goods. However, DHSC is keen to continue to work with industry and other stakeholders to build robust and resilient UK medicine supply chains for the future that are able to withstand future shocks to supply. This work builds on the analysis of medical product supply chains as part of the cross-Government focus on critical supply chains resilience in 2020, which identified a range of mitigations such as stockpiling critical goods, better procurement, diversifying the sources of active pharmaceutical ingredients used in medicines and, where relevant, looking at opportunities to onshore production.

The DHSC works closely with the Medicines and Healthcare products Regulatory Agency (MHRA), NHSE&I, the Office for Life Sciences, the Department for International Trade, the devolved administrations, industry and academia, on a range of measure to strengthen UK medicine supply resilience in the short, medium and long-term.

Finally, and to give further assurance on the safe and continued supply of medicines, the Department has well-established processes to manage medicine supply issues and works closely with MHRA, the pharmaceutical industry, NHSE&I and others operating in the supply chain to help prevent shortages and to ensure that the risks to patients are minimised when shortages do arise.

Department of Health and Social Care

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