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.

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).

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.