§ Mr. Mike Thomasasked the Secretary of State for Social Services(1) whether he will take steps to stop pharmaceutical companies offering incentives to pharmacists to dispense branded drugs in place of the generic drug prescribed in order to preserve their market share as, for example, the practice of Messrs Beechams Ltd who offer free supplies of their drug Penbritin to compensate pharmacists who dispense it when Ampicillin is prescribed;
(2) whether it is consistent with the code of practice for the pharmaceutical industry and with the arrangements for remuneration for pharmacists for Messrs Lilley Ltd. to offer pharmacists 300 free tablets of their drug Ilotycin (Erythromycin) with every 500 tablets ordered.
§ Mr. MoyleUnder the pharmaceutical price regulation scheme my Department reserves the right, in assessing the reasonableness of profits, to take into account revenue forgone by a company which differentiates in its selling prices between customers or classes of customers by286W providing free supplies or allowing discounts greater than are justified by normal commercial considerations.
The reimbursement of individual pharmacists in respect of prescriptions ordering the supply of Ilotycin is based on the trade price published by the manufacturer. Separate arrangements are made to ensure that, for pharmacists as a whole, normal discounts shown on suppliers' invoices are taken into account in determining reimbursement. The interpretation of the code of practice for the pharmaceutical industry is a matter for the industry's Code of Practice Committee.
I have no evidence that the companies referred to in the questions are supplying drugs free of charge but if my hon. Friend will let me have the information upon which his references are based I will arrange for the statements to be taken up with the company.