My Lords, I will now move into a very different area, but one that is integrally related to the Bill: that of “specials”. Concerns relating to specials and obtaining them have been brought to my attention by the British Association of Dermatologists, the Royal College of Ophthalmologists, the Royal College of General Practitioners and others—so the issue goes more broadly than simply dermatology.
Specials are unlicensed medicines manufactured or procured specifically to meet the clinical needs of an individual patient. They may be put on the skin; they may be alternative ways of making a medication that can be ingested when there are swallowing difficulties: for example, in babies fitted with a fine-bore nasogastric tube, and so on. The most frequently prescribed specials are made in small batches, but sometimes there are only one or two patients at any one time in the country who need this particular preparation.
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In his previous answer, the Minister spoke about the problem of generics overpricing and the monopoly that some generics producers have. I suggest that unless we do something about it, we have exactly the same with specials productions. We have effectively
the ability of a monopoly—a fixed price, one person producing it and charging whatever price has been arranged. I will come on to why I think that price can be sometimes inappropriately high.
One problem is that in a hospital, the trust is required to keep procurement costs down, so they seek the most cost-effective quote—normally from an NHS manufacturing unit which will manufacture the product. I was grateful to the Minister for meeting me previously and referring to comparisons in price between England and Scotland on the drug tariff. I noted that on the figures he supplied to me, all the dermatology items listed are more expensive in England than in Scotland, although some other items are lower. Only two ophthalmic preparations were listed, whereas there are well over 20 in the Royal College of Ophthalmologists’ guidance on specials. I worry that this is a fairly incomplete list.
In primary care, the situation is different from hospitals, because the retail chemist pharmacist is required to seek only one price quote when procuring specials not listed on the drug tariff and is guaranteed reimbursement however high the price paid. Legally, a quote can be acquired from a parent or sister company, which adds an incentive to seek a high quote and thus make a higher profit. The tariff-setting process compounds the problem. Prices for specials in primary care are set by reference to the prices of the Association of Pharmaceutical Specials Manufacturers, composed of private companies only. These members manufacture relatively small quantities of dermatology specialties and on an ad hoc basis, leading to extremely high prices. Until now, NHS manufacturers claim that they have been refused involvement in the process for setting tariff prices in England, although when I met the Minister, his officials said that they had not been able to get the prices from the NHS manufacturers.
Estimates for the amount of money wasted are difficult to obtain, although the top 12 dermatology specials dispensed in England in the last full year— 2013—would appear to have cost £845,000, rather than the £162,000 they would have cost if procured from an NHS manufacturer. It would seem sense therefore for commissioners to be obliged at least to seek the most cost-effective option, which is why the amendment asks for them to seek no less than three quotes. Obviously if there is only one source of production for a very difficult special, while they may seek three they would not be able to get more than one and all the NHS manufacturers might say that they would not be producing it.
The objection to the amendment raised when I met the Minister was that sometimes these things are needed very urgently. I point out that in subsection (2) the amendment states:
“Unless there are over-riding reasons not to accept it, the cheapest quote must be selected”.
I should have thought that in guidance to go along with such an amendment to the Bill a clinical emergency would count as an “over-riding reason” and therefore would not require a pharmacist to try to seek another quote. Certainly in dermatology, a day or two of seeking alternatives is not going to make a major difference to the clinical condition. However, I have had dermatologists write to me describing a clinical
situation where they will prescribe a special but the clinical commissioning group will refuse to pay for it because the community price is so high. The patient therefore has either to return to the hospital’s outpatient clinic all the time to obtain their topical treatment or, worse, their disease goes out of control and they can end up on very expensive systemic therapy, with all its complications and required monitoring. That is much more expensive than if the special had been provided in the first place. We need to amend the Bill to include the requirement that there is the equivalent of a degree of competitive tendering.
The argument was also put forward that lack of economies of scale in the manufacture of specials mean that the price is particularly high. That is sometimes true, but some specials can be manufactured in batches. Some topical creams can be manufactured in a series of tubs, which will last for quite a long time.
Recent examples of overpricing for specials have come in, for example, from Surrey Downs clinical commissioning group, which recorded in November 2016 that a patient was dispensed an oestrogen implant pellet at one pharmacy for 38p, while in the same month another local patient was dispensed an identical pellet in another pharmacy for £370.59. That seems an unbelievable discrepancy in pricing. Similarly, a tablet to be taken daily for bronchitis was dispensed for one patient at the price of £46.20 a packet and in another pharmacy at £271.17 a packet—again, a vast difference. I have tabled this amendment, and I intend to take it further, because I just do not understand why NHS money is potentially being spent unnecessarily, simply because there is no requirement to seek competitive quotes. I beg to move.