Abstract
Investigative Journalist, The Times
Our talk today is by Billy Kenber, who is an investigative journalist with The Times newspaper, so he tends to find out things that he ought not to find out, obviously.
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So thank you very much for coming and we look forward to what you have to say.
I am going to tell you this evening about a small group of companies, really a small group of individuals, who found a loophole and used it to make a huge amount of money in a relatively short period of time at the expense of the NHS. I am going to tell you how they did this, how they were able to get away with it for so long and, hopefully, offer some thoughts on what we can do to stop it in future.
This story starts in 2016. I am, as you have said, an investigative journalist at The Times and I cover a wide variety of topics. I am not a specialist in medicine or science, but it just so happened that in the early part of 2016 I was looking into an issue called ‘pay-for-delay’. That may be a term some of you are familiar with. Before I explain it for those who aren’t it is probably useful to very briefly outline the basics of how the pharmaceutical industry operates and how drugs are priced.
Broadly speaking, since the 1950s there has been a kind of social contract between the NHS on behalf of the public and drug companies, and the deal is this: in exchange for funding research and taking on those risks, drug companies are entitled to a reasonable return on their investment when they make a successful discovery. They get this during a period of exclusivity provided by a patent. A patent lasts for 20 years in the UK but drug companies will have to carry out clinical testing and other aspects of the regulatory process during that time. This means that the actual period of time a drug is on sale under a patent is generally closer to seven or eight years. It is a period in which companies are entitled to make a reasonable profit. The other half of that deal is that once that period ends market forces will come in and will drive down the price of the drug through competition. There will no longer be a patent, so any company can obtain a licence to make this drug and create a generic competitor. That in essence is how it is supposed to work.
Under ‘pay-for-delay’ drug companies sought to tip the balance. They paid rival companies who might bring in a competing drug to not bring in that drug for a period of one or two years; so at the end of the patent they were extending the monopoly for one or two years; and it has been found to be illegal in a number of cases.
So in early 2016 this is what I was looking for. I was seeking to see if this was happening in the UK and if it had happened recently. It had been a big problem in the United States and there had been a case in the UK dating back to between 2001 and 2004 involving GlaxoSmithKline, but it didn’t seem to be happening more recently. I started to look, doing the sort of thing that we journalists do; I spoke to people and I dug through documents, and there didn’t seem to be any recent cases. But, as I was doing this, something else came to mind.
It was this man, who again some of you may recall. He is a man called Martin Shkreli. He is an American; he is a former hedge fund manager, and in late 2015 he set up a start-up pharmaceutical company called Turing Pharmaceuticals. They bought the rights to a couple of drugs and he caused enormous public outrage when he changed the price of one of those drugs from $13.50 per pill to $750 literally overnight. This was a drug used for treating infections but it was particularly used by people with HIV and there was, unsurprisingly, given the scale of the price rise, an enormous outcry – how could he do this? How could he justify this? How could this be stopped?
So, with that in mind, I was interested in whether this sort of thing was happening in the UK. The British drugs bill, the bill the NHS pays for medicine, is about 10% to 15% of its overall budget and from 2011 to 2016 it had gone up from £13 billion to £17 billion, an increase of about a third. Was there someone like Martin Shkreli behind this increase? Were there British companies or British individuals implementing huge price rises, or was our system better equipped to prevent it?
To find an answer to that I started with a document called the ‘NHS Drug Tariff’. This is a document which comes out every month. Amongst various items included in this document is a long list of drugs and the basic price, which is the reimbursement price that the NHS will pay to pharmacists dispensing those drugs, is essentially the price that we pay for drugs in the UK.
I started doing some back-of-the-envelope calculations, looking through a drug tariff from 2016 and one from a few years earlier to see whether there had been any big increases in the price of drugs. The answer was that there had. Several drugs, in fact dozens of drugs, had gone up by more than 1000% in over just three or four years.
At this stage, there were lots of possible explanations for that. Perhaps the active ingredient in the drug had become much harder to get hold of and the price had gone up; perhaps the manufacturing had become more difficult; perhaps there were other factors that justified this; but it seemed, to my lay perspective, a very big increase in quite a significant number of drugs.
So I began to look through some of the figures. There was a steroid treatment that had gone from 70 p per packet to £85 per packet in three years; there was an antidepressant that had gone from £5.71 per packet to £154; and they were just the tip of the iceberg.
As I looked through these drugs, I began to notice something that seemed quite curious, and it relates to the ‘category’ column in the Drug Tariff. There are three categories, C, A and M, and those categories relate to the type of drug but also how the NHS prices those drugs.
Broadly speaking, Category A is for readily available generic drugs. They are not under patent; anyone with a licence can make them- and they are priced on the basis of two named large wholesalers and two named large manufacturers providing their prices and then an average is taken; it is slightly weighted but an average is taken of those prices.
Category C drugs are branded drugs. Now, they may be under patent or they may not be, but they are generally drugs with only one supplier, and those are drugs where, because there is only one supplier, a price is agreed between the drug company and the NHS, and if they want to alter that price they have to reduce the price of other drugs within the same category. So there is effectively a profit cap across all Category C drugs for a given company.
Finally, Category M drugs are the most common drugs of all. They are things like ibuprofen and paracetamol that are so readily available they just use market data from pharmacies and calculate it on the basis of that each month.
What I noticed was that the drugs that had had big increases also seemed to be moving category during that time. They seemed to be moving from Category C, the branded drugs, where the price is agreed and there is then a profit cap, to Category A, more readily available drugs, where the price is set in accordance with these two large manufacturers and two large wholesalers providing the prices, and that didn’t make sense, because Category C drugs are meant to be much harder to get hold of than Category A drugs; there is only meant to be one supplier, and the whole basis of the generic drug industry is that competition would drive down the price. So a drug moving from Category C to Category A should be falling in price, but instead here were dozens of examples of it increasing.
I began to look more closely at some of the individual drugs. One of them was this antidepressant that had gone from £5.71 to £154, and that is an antidepressant called doxepin. Those price increases had taken place in a matter of months, the bulk of price of increases, and particularly with the top one, the 25 mg dosage, you may notice that the amount it goes up by appears to roughly double; in fact, almost exactly double; each time it went up approximately every six months. That didn’t seem to me to be the kind of natural price increase you would expect with supply problems or problems with getting hold of an active ingredient. It looked suspicious.
So I looked a bit deeper into what this drug is and where it had come from. It is a drug that had been invented many decades earlier by Pfizer. By 2006, the drug was no longer extremely valuable. It was quite an old drug at that stage, with a relatively small patient group that took it, and they sold the drug on to a company called Marlborough Pharmaceuticals. They increased the price a little bit but it then stayed at the same price for the duration of their ownership, £3.77 and £5.71, until December 2013 when Marlborough Pharmaceuticals was bought by another company, a company called Atnahs.
I could see then that something else had happened shortly after that in April 2014, only four months after this purchase, which was that doxepin, which had been sold under a brand name of Sinepin, dropped the brand name. An announcement was made in the trade journals to the effect of ‘Sinepin will no longer be available in this packaging. It will now be sold as the unbranded generic doxepin, its generic name, and rest assured there is no difference in the product itself, it is just a repackaging’. This is the notice that went out in the trade journals in April of 2014.
In July of 2014, as you can see, the price started to go up, and it went up quite dramatically, initially from £12.71 to £48.00 for the 50 mg version, and then eventually on up to £154.00.
Other Atnahs drugs, drugs where the licence holder was the same company, had similar patterns. There was a drug to treat severe insomnia, sold under the brand name Welldorm in tablet form, which rose from £12.10 per packet to £138.56 between late 2014 and 2016, and these price rises were around the same time and again the brand name was dropped. There was an announcement that it will no longer be known as Welldorm, it will now be sold under its generic name, in this case cloral betaine.
For those two drugs alone, when I looked at the prescribing data, the cost of the price increase was approximately £5½ million a year to the NHS, just from two drugs.
So I started looking at some of the other drugs, and there were other drug companies beyond Atnahs with similar patterns discernable. Drugs would drop their brand names, would be repackaged and sold under their generic name, but instead of the price going down, the price would go up, and it would go up dramatically by thousands of percent. The biggest individual increase in percentage terms was for Hydrocortisone 10 mg tablets, and they went from 70 p to £88. Between 2013 and 2016 another drug, the epilepsy drug Primidone, rose in price from £12.60 to £97.39 for the 250 mg version. There were some huge increases going on and in all cases the brand names were being dropped.
At that point it clicked into place why that was happening and what that had to do with this switch from Category C to Category A. It seemed to me that what these companies were doing was buying the rights to old unwanted drugs from big drug companies like Pfizer or GSK. They were the only supplier of the drugs because the market was quite small, so they weren’t very valuable, and they were being sold under a brand name at that point. Once they had acquired it they would drop the brand name, and this would serve to move the drug from Category C to Category A, because Category C is for branded drugs and Category A is for non-branded generics, which they now were. In doing that they were essentially free to price them as they wished, because although there was this mechanism in Category A to price drugs there in accordance with these two named wholesalers and these two named manufacturers, in these cases the two named manufacturers didn’t make the drug and the two big wholesalers could only get the drugs from one place. They essentially had a monopoly and they had managed to identify the loophole, a way of removing the sales from the profit cap that existed under Category C purely by changing the name. The market forces that the NHS relied on to keep down the cost of Category A drugs were non-existent in these cases.
But why was there no competition? Especially as the prices rose, why didn’t other companies come in and start making generic versions of these drugs, competing on price and therefore driving down the price to the NHS?
Well, part of the answer is that to make a generic drug you need a marketing authorisation, and you get this from the Medicines & Healthcare Products Regulatory Agency (MHRA). But it is not a quick process, it takes two or three years, and it costs a few hundred thousand pounds, and in that time you have no idea whether other companies are doing the same, so there is a strong element of risk. You could finally get your licence and discover that two other companies had obtained one six months earlier, at which point it is not going to be of any value to you to launch that product. So these companies, in acquiring the drugs and dropping the brand names and increasing the prices, knew they likely had, at minimum, a two or three years period of exclusivity before anyone else was going to come in and compete with them.
As I built up this pattern and built up the number of drugs that were affected, I honed in on four companies.
They were Atnahs, which I have already mentioned, and two companies, one called Amdipharm and one called Mercury Pharma. These were both originally family run companies and they were bought by a private equity company called Cinven and merged into AMCo, which was then subsequently bought again and renamed and it is now called Concordia. Then there was also a company called Auden Mckenzie, which again has since undergone some ownership and name changes.
There were also some similar backgrounds in the way in which these companies had been founded and grown. They were often founded by former pharmacists, people who had had one pharmacy and built up a chain over many years and then moved into wholesale and then eventually moved into the business of making the drugs themselves as generic manufacturers, and they appear to have got a real sense of how the system worked, how the whole supply chain worked, and ultimately ended up creating these companies which then used this loophole essentially in the NHS pricing rules to significantly increase prices, and, interestingly, the founders of Atnahs were the same as the founders of Amdipharm.
They were two brothers called Bhikhu and Vijay Patel and they, fitting this pattern, had come to the UK from Kenya in 1967 and then Vijay had set up what became a chain of pharmacies in Essex. In the 1980s he moved into wholesale and in 2003 he set up Amdipharm. In late 2012, he sold Amdipharm to this private equity company. Several of the drugs they had formerly owned subsequently went up in price. After this had happened, they set up a new company, Atnahs, which then had this pricing behaviour we have seen on the graph earlier of approximately doubling prices every few months.
The influence of the private equity company that bought their former company and merged it with another and created AMCo also served as a kind of rocket booster under this sort of behaviour and what had previously been quite modest price rises dramatically escalated. For example, there was a thyroid treatment which under previous ownership had gone from £11.00 to £25.12 pence for a packet, and under AMCo it went up to a peak of £262.00. That drug alone cost the NHS an extra £19 million a year, again just for the price increase. When Cinven, after about 18 months of ownership, decided to sell on to a Canadian company at a huge price of US $3.5 billion the prices then rose still further, the Canadian company presumably trying to recoup some of its investment.
These companies seem to have found what, in some ways, amounts to a new model of drug company. It seemed to me, from the patterns I was seeing, that drugs to them weren’t about research and development over many years, they were about acquisitions and mergers, and they were essentially a financial asset where the stability of a population, as found in old drugs with a very stable population but not much room for growth in patient numbers, was simply an opportunity to increase price instead to take advantage of this captive market.
By the summer of 2016, a few months after I started work on this, I had a group of about 50 drugs where this pattern seemed to have applied. I identified these companies that seemed to be behind it, and I was just about getting ready to publish the story. There were still a few unknowns and not every drug maybe fitted the pattern of some of those I have mentioned. In some cases they weren’t the only supplier, there were one or two other suppliers, and there had been some possible explanations down the line from some regulatory action that has followed as to what was going on there. In one Competition and Markets Authority case concerning the supply of hydrocortisone tablets there is an allegation that Auden and AMCo struck a deal under which AMCo wouldn’t use its licence to make the drug and instead Auden would provide very cheap stock to them and neither would compete on price. The companies dispute this theory. But broadly speaking this debranding trick seemed to be the pattern of what was going on.
When approached for comment, the companies involved disputed the idea that the prices the NHS paid for their drugs, the prices I’ve outlined, were excessive. Their argument is that the drugs are old drugs and there are significant costs to acquiring and then maintaining them, particularly in keeping up with the latest regulatory and technical requirements. They say that many are niche drugs with relatively low volumes and that they are guaranteeing supply for vulnerable patients. The companies argue that the generic medicines market in the UK is ‘one of the most cost-effective in the world’ and delivers huge savings to the NHS.
They also argue that the NHS had effectively agreed these prices, because it wasn’t their pricing mechanism they were using, it was an NHS pricing mechanism. They had this basket of two wholesalers and two manufacturers and therefore it was up to the NHS to dispute the prices if it didn’t like what it got.
In June 2016, we published a front page story exposing what was happening. It cited a figure of £262 million which was the total extra cost for the, I think, 50 or so drugs in 2015. It went up to £370 million for 2016. Some of the price rises were during 2015, particularly in late 2015, so the full effect wasn’t truly felt until 2016.
When I published this story the reaction of the industry was that this was outrageous and shouldn’t be going on but that it was confined to a very small part of the industry, that these were small companies, they were obviously not household names, and that this was an anomaly in a system that otherwise worked very well. Even if that had been true, there were some serious health consequences above and beyond the financial consequences for the NHS of this increased bill.
There were patients on a drug called liothyronine, which in my understanding is a second tier thyroid treatment for people that don’t respond to the more mainstream drug levothyroxine, who were taken off the drug and GPs were told not to prescribe it because the cost had rocketed so high. In that case the cost of a single pill had gone from 16 pence to £9.22. Patients were going abroad to buy it; patients were turning online to less than reliable websites to buy it, such was their desperation. Others simply couldn’t get it and were left bedbound or unable to live a normal life.
The industry response was that this is bad, but this is not a systemic problem, that it is limited to the small guys, people we haven’t heard of. But as I continued to work on the story it became apparent that wasn’t quite the case.
In May 2016, I received a phone call from an anonymous source that drew my attention to some filings in a court case in a dispute between Pfizer, the British company, and a tiny company based in Somerset called Tor Generics. From these filings something became apparent.
In 2009 Tor Generics, which appeared to be essentially a one-woman band, had approached Pfizer with a plan for increasing the value of a branded drug that Pfizer made for epilepsy which is called Epanutin. It is phenytoin sodium in its generic name. Pfizer had a monopoly over this drug in the capsule form, it was the only one manufacturing it, but it wasn’t making very much money, and Tor Generics suggested that they should perform what was essentially this debranding trick with that drug but that instead of Pfizer doing it and risking reputational damage, Tor Generics would acquire the licence from Pfizer and do it on their behalf, with profits to be split between the two.
Now, the reason that ended up in a court case is because, although Pfizer liked this deal, they didn’t ultimately do it with Tor Generics, they did it with another company, a company called Flynn Pharma, or a deal that essentially had the same effect.
At this point it is worth pausing to note that Pfizer had a choice here, and they had a choice that they described themselves in internal emails that were later released. They had concerns about the profitability of this drug, and they are a commercial enterprise, after all, they are not to be expected to sustain loss-making drugs for the public benefit with no financial gain for themselves. So they discussed whether they should approach the NHS and ask for negotiation for the price to be increased whilst remaining a Category C drug, so it was under profit cap, but without having to reduce the price of other drugs. But at the same time they had these offers from Tor and from Flynn, which would allow them to increase the price by a far greater magnitude. Despite some internal concerns, as demonstrated in some of these emails, they decided to go ahead with that option.
To go ahead with the deal, because it was a Category C drug, they needed to change the name, and they needed, therefore, to change the packaging in which the drug was sold, even though it was going to continue to be manufactured by Pfizer in its factory and then passed on to Flynn to sell under their name, and to do that they needed the MHRA’s agreement; that is the medicines regulator.
Another interesting aspect of this and an interesting aspect of the behaviour involved is that when the MHRA initially said they didn’t want to give this consent because they had concerns that this drug had a very narrow therapeutic index and it would cause significant problems to patients to have any changes, even in the packaging of the product, Flynn Pharma, in the words of one MHRA official, were playing hardball and said (this is the MHRA reporting to the Department of Health). ‘Although the MHRA do not agree with the name change, Flynn effectively threatens to stop the product if they do not get the generic name approved. Whilst this is completely irresponsible of Flynn, we do not see an easy way out of this situation’. Flynn’s position is that delays in the MHRA’s usual process led to potential supply problems and it has denied threatening to stop supply.
As a result of the deal and the price rises that followed the cost of a 300 mg capsule pack of 28 pills rose from £2.83 to more than £67.00 and the same size pack of 50 mg rose from 67 p to £16.98. This is a drug that is used by, I think, around 50,000 epilepsy patients every year and the scale of these price increases, coupled with that much larger patient population size compared with some of the other drugs, meant that this drug alone in its capsule form cost the NHS almost an extra £50 million in 2013.
The Pfizer justification in a press statement was that it was loss-making and it needed to make these changes in order to ensure there weren’t stock shortages; with the need to ensure continuous supply something Flynn has also cited. For their part, Tor Generics has said that its proposal would allow an ‘acceptable and fair profit to be made’ to ensure the drug would continue to be made.
Soon there were other cases too, all over Europe in fact. Another big pharmaceutical company called Aspen Pharmacare bought up the rights to a number of cancer drugs from GlaxoSmithKline and then went round several European countries demanding large price increases. In the UK they were able to increase prices quite easily, but in Spain they met resistance from the health service, who refused to give them any price increase at all and said they were compelled under Spanish law to continue supplying it at the existing price. Aspen’s internal emails show that when the Spanish authorities did that, they said they were prepared to leave the stock to expire in a Spanish warehouse rather than sell it to patients at this lower price, and eventually all over Europe these prices went up.
Throughout these stories, the ones involving the larger companies and the smaller ones, there seems to be an obvious question, which was why hadn’t the NHS spotted this and why hadn’t had the NHS done anything about it? It had been going on for years at the point in 2016 when I wrote my first story about this. The oldest price rises dated back to about 2010 and the bulk of them began in 2013/2014.
The short answer is that the NHS had been aware of it. A stream of doctors, each in their own specialty, had spotted the cost of the drugs that they regularly dealt with rising and had gone to the Department of Health and gone to the NHS and drawn their attention to it and asked them to do something about it, but each in turn had been batted away and had received the same response, which was that the generic drugs which people were on saved the NHS a lot of money compared to the cost of keeping drugs on patent and that whilst there might be one or two anomalies in the system, it basically worked very well – ‘Nothing to see here’ essentially.
Another division of the NHS was also well aware of all of these price rises because they had to agree to put each one into the pricing database that is used by GPs and by pharmacists, and their internal communications and emails reveal that on occasion they were surprised by the size of the increases. They went back and checked with the drug company that they really did mean to put it up from £1.00 to £30.00, or whatever the precise figures were, and then once they got an assurance that that was indeed what they intended, they would put the price rises straight through. There was no attempt to seek justification or any sort of effort to challenge people over the reasons for these increases. Officials were essentially asleep at the wheel.
But things have changed a bit, and they have changed a bit in part because of these stories and the response they generated.
The change has been in large part because of the Health Services Medical Supplies (Costs) Act 2017. Previously, the NHS had powers under the NHS Act 2006, which did allow it to intervene and impose lower prices in certain cases. Although the industry view was that they were free to do this with Category A drugs, the Department of Health’s lawyers had concluded that there was a loophole which meant that actually they couldn’t do anything in the cases I have highlighted, and that is because, as part of the agreements for prices for Category C drugs and the attendant profit cap, there is an exemption from the Department of Health imposing prices. Now, it is intended to be an exemption from imposing lower prices on just those drugs in Category C, but the legislation was too broadly drawn and the Department of Health lawyers felt that that meant there was an exemption for all of a company’s drugs as long it had even a single drug in Category C, and all of these companies had at least one drug in Category C, so they felt their hands were tied.
But in September 2016 they tabled this new law, which was eventually passed in April last year, and this had two core aspects. One was simply a power to impose lower prices if the Secretary of State for Health concludes that a price being charged is excessive. It is a kind of overriding mechanism if the rest of the pricing structure isn’t working. And the other was a load of information powers around profitability and marketing costs and research costs for every individual drug broken down to a very detailed level which will allow the Department of Health, once that part of the Act comes into force this April, to see exactly whether or not a price rise is justified. No longer will companies be able to turn around and say in general terms ‘There are manufacturing problems’ or ‘It’s difficult; we want to guarantee stability of supply’, or ‘We have an investment here’. They will now have to prove it and they will have to prove that those costs merit the exact increase.
There have also been some changes in the regulatory environment. The Competition and Markets Authority had a couple of cases already under way but now has, I think, eight or nine cases involving pharmaceutical pricing, and it has taken quite an aggressive stance on what it finds to be an excessive price. There was a record fine handed down in that Pfizer and Flynn Pharma case of almost £90 million for the pricing there, although that is now being appealed by both companies who dispute that their conduct was unlawful. I think the result of the appeal is due any day and there are several other cases that the CMA are pursuing.
In addition to the regulatory action, it is in the Government’s power, once the decision has been made and the appeal process has been exhausted, to take civil action to recoup the increased costs of the drug that was later deemed to be excessive. The £90 million in the Flynn and Pfizer case is intended to be a fine for bad behaviour separate to the possibility of recouping the actual money that was unfairly spent.
There is action in Europe too. The European Commission has opened an investigation into the cancer drugs I mentioned involving Aspen Pharmacare and is taking the lead on that one.
One of the companies, Concordia International, which was the company that took over AMCo, has had more immediate consequences, in significant part because of this Bill and the focus on its excessive pricing. It bought a lot of these drugs from Cinven, the private equity company, in late 2015 and since the middle of 2016 has found itself unable to impose higher prices, and indeed under a lot of pressure to lower prices, and that, coupled with Brexit and some problems with the current exchange rate and an issue with one of its drugs with Euros, has led to a fairly spectacular collapse in its share price, down from about $37 to under a dollar, and it has already restructured and some analysts think bankruptcy may be imminent.
So some good things have happened, but it would be wrong to suggest that pricing problems have been solved altogether.
These are two recent stories that I wrote, one with a colleague, about drug pricing, and these issues have not been solved at all. On the left is a story about recent problems with shortages in the industry, affecting pharmacists in particular, and suspicions that certain wholesalers have been holding drugs back to artificially create shortages, which eventually leads to something called ‘No cheaper stock obtainable’, an NCSO, which is a temporary price increase, and the number of those temporary price increases have been soaring and the cost of those has been around £200 million for the latter half of 2016.
Another is a very recent story from last week about problems with the pricing of ‘specials’. These are medicines where no licence or a different type of licence is involved. They are unlicensed medicines. They are made to order often for patients who, for example, can’t take a drug in a tablet form and need it in a liquid form, or for patients particularly in dermatology. I believe a lot of the medicines there aren’t readily available in licensed form so can only be supplied unlicensed as specials, and there are huge discrepancies in the prices that the NHS is paying for specials because there is no regulation of the pricing at all. The way the scheme works is that when a prescription is made for a special the pharmacist goes out to a specials manufacturer and gets hold of it, and whatever that specials manufacturer cares to charge will be the price that the NHS will have to pay. So there was, for example, a medical moisturiser where a single pot was charged at more than £1,500 in one case, and in another case was charged at £1.73.
So there is certainly more to be done, but on the whole things have changed for the better in relation to the de-branding trick and the excessive pricing of generics. Some prices have started to come down, others no doubt will as these regulatory cases play their way out.
What solutions are there for dealing with this in the future? Well, one solution, I think, is hinted at by specials themselves. There are, I think, at least two NHS manufacturing arms that make specials, one in Scotland and one in the North of England, and those specials manufacturers are, I think it is right to say, by a substantial distance the lowest priced specials of any on the market. So perhaps there is a role there for the NHS to begin making its own generic medicines. It is something that has also been started by one Trust down in Torbay, but could it be done on a larger scale?
Above all, I think these sorts of cases, and particularly the de-branding cases and the amount of time that this was allowed to continue, show the need for all parts of the Health Service to be engaged in paying attention to the cost of medicines. These problems were allowed to continue for so long because no one took responsibility for stopping them.
You need to start at the top with officials at the Department of Health and at the NHS who should make better use of the data they have on prescriptions across the country and the different prices being paid to identify anomalous situations and also to better leverage their position as a huge and dominant customer to these companies to drive down prices and negotiate savings. That is also, I think, true in the separate world of new medicines and their pricing, though that is a related but separate issue.
I think it is also a responsibility for GPs and other medical practitioners to know the cost of what they are prescribing and, where that has changed, to bear in mind cheaper alternatives and to provide pressure upwards to keep prices down.
Finally, as patients we too can be better informed about the cost of the drugs we take. Every pound that gets spent on overpriced medicine unnecessarily is, after all, a pound that doesn’t go to the NHS budget where it is badly needed elsewhere.
I will take some questions, if anybody has any.