HC Deb 11 March 1988 vol 129 cc404-5W
Mr. Simon Coombs

To ask the Secretary of State for Social Services if he has any plans to examine the cost and method of supply of generic medicines to the National Health Service; and if he will make a statement.

Mr. Moore

The White Paper "Promoting Better Health" commended voluntary generic prescribing by doctors as good professional practice and noted the expectation of its continued use in the future. It is important therefore that there should be wide availability of generic medicines throughout the country and that the market should operate efficiently. Together with my right hon. and learned Friend the Secretary of State for Scotland and my right hon. Friend the Secretary of State for Wales, I am appointing Touche Ross Management Consultants to study the market for generic medicines in Great Britain. They are being asked to examine the extent of competition in supplies to NHS hospitals and to family practitioner service contractors, the prices paid, the effectiveness of the systems for setting the prices of these medicines and the extent to which United Kingdom and other manufacturers can enter and remain in the market.

I am asking the consultants to report within six months. The contents of their report will necessarily be confidential because of the commercial information which it will contain. The terms of reference for the study are:

  1. 1. To study the market for generic medicines in Great Britain with particular reference to:
    1. (a) the extent of competition in the supply of generic medicines;
    2. (b) the similarities and differences between the ways in which generic medicines are procured by and distributed to:
      1. (i) NHS hospitals;
      2. (ii) FPS contractors (retail pharmacists and dispensing doctors);
    3. (c) the prices paid for generic medicines by:
      1. (i) NHS hospitals;
      2. 405
      3. (ii) FPS contractors;
      and the reasons for any differences in those prices;
    4. (d) the effectiveness of the systems for setting prices for generic medicines in the Drug Tariffs and recovery of any difference between the Drug Tariff price and the price actually paid, noting that the system in Scotland differs in certain respects from that in England and Wales;
    5. (e) the relationship between the prices of generic medicines and the extent to which United Kingdom and other manufacturers can enter and remain in the market.
  2. 2. In the light of the above:
    1. (a) to put forward if possible proposals for improving the arrangements for the procurement, distribution and pricing of generic medicines, with particular reference to FPS contractors, which:
      1. (i) are compatible with our international trading obligations (including EEC and GATT) and the independent contractor status of retail pharmacists and dispensing doctors;
      2. (ii) take account of the range of ownership and management in retail pharmacy and the nature and level of involvement of wholesalers;
      3. (iii) would stimulate further competition;
      4. (iv) would ensure the availability of generic medicines at reimbursable prices throughout Great Britain;
      5. (v) would lead to reductions in the cost of medicines to the NHS as a whole;
      6. (vi) would ideally also further encourage the prescribing of generic medicines, where appropriate;
    2. (b) to assess the effect of any proposals on United Kingdom and other manufacturers of generic medicines;
    3. (c) to report within six months.

Net Weekly Spending Power1 April 1988 Illustrative Income Support Cases2
Supplementary Benefit3 £ Income Support £ Change £
(i) Rent-paying lone parent, 2 children aged 4 and 11, claiming 3 months. 62.02 70.10 +8.08
(ii) Lone parent with mortgage, 3 children under 10, claiming 6 months. Attendance allowance, heating and laundry additions for 1 child. 97.78 103.65 +5.87
(iii) Rent-paying lone parent, 1 child aged 12, part-time earnings £25, claiming under 1 year. 34.06 49.35 +15.29
(iv) Single unemployed man aged 30, non-householder. 29.31 33.40 +4.09
(v) Pensioner aged 76, diet and heating additions, non-householder receiving attendance allowance. 62.33 66.45 +4.12
(vi) Single woman aged 26, severe disability allowance and heating addition, non-householder. 33.18 46.45 +13.27
(vii) Unemployed man, wife and a child aged 3, rent-payer. 66.00 68.35 +2.35
(viii) Single man, sick, new claim, rented accommodation. 31.37 33.40 +2.03
1 Net weekly spending power is defined as income after payment of housing costs (rent or mortgage and local authority rates—where appropriate).
2 All other main assumptions as in "Impact of the Reformed Structure of Income Related Benefits", October 1987, except where detailed assumptions have been specified elsewhere.
3 April 1987 net spending power on supplemantary benefit has been uprated to April 1988 hypothetical levels by the retail price index excluding housing.

Mr. Favell

To ask the Secretary of State for Social Services if he will provide estimates of net weekly spending power, both under the present system of supplementary benefit and under the new system of income support, for each of the following illustrative cases: (i) a sick man claiming less than a year with a wife and two children aged three years, paying a mortgage, (ii) an unemployed man with a wife and three children aged three, 11 and 12 years who live in local authority accommodation, (iii) a single

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