Branded Generics

Background

Some generic manufacturers have been marketing a limited range of branded generics to PCT's since July 2001. These products may have reimbursement prices lower than Drug Tariff prices for the appropriate generic, resulting in a reduction in reimbursement to community pharmacies. Some PCT's have already agreed to recommend that GP's in their areas prescribe Discovery products. The arguments against doing so can be summarised as follows:
 

1. PCT's may save money on their individual drug budgets in the short term but not necessarily in the longer term. It is likely that any widespread use of branded generics could jeopardise the significant progress that has been made to restrict the growth in the drug bill through the current system of open competition and incentives. GPs are incentivised to prescribe generics as the savings can be spent in other areas for the benefit of patients. Pharmacists are incentivised to negotiate discounts from competing suppliers that exceed the level of discount clawed back by the government. This activity:

  • benefits the drug bill as the Drug Tariff price is adjusted downwards to reflect the changes in market pricing. It also allows for prices to fall below those of branded generics over time.
  • helps individual pharmacists play their part in sustaining a viable pharmacy network that can support the NHS in its drive to fulfil its ambitions for improved patient care.

2. The DOH is very keen to encourage generic prescribing and has set a target of 72% for the UK as a whole. Branded generics do not contribute to this target.

3. Some products are not stocked by the major wholesalers and this can make it difficult for contractors to fulfil scripts promptly, causing inconvenience to patients, and to GP's, who might have to change scripts back to the generic

4. Since only a minority of PCTs recommends branded generics, patients may have difficulty getting their prescriptions dispensed by a pharmacy outside the boundaries of those PCTs, which recommend the Discovery products.

5. Patients need to understand their medicines and the reasons behind any changes. Pharmacists, doctors and nurses will need to provide additional counselling to reassure patients that their treatment has not changed despite the different appearance of their medicine.

6. By specifying a particular branded generic, PCTs are preventing other generic suppliers from supplying them and this may be anti-competitive. The PSNC is very concerned about the potential impact of any widespread use of branded generics on the viability of community pharmacy and the availability of generic medicines in the longer term.