Generic drug shortages are having a real impact on community pharmacies and patients – PSNC is asking pharmacies to keep them informed of any issues

The UK generic drugs market is one of the strongest in Europe. In 2013 generics accounted for approximately 75 per cent of the market by volume and 26 per cent by value. A free-market approach with competition between manufacturers and incentives for GPs to prescribe and pharmacists to dispense is the basis of a thriving generics sector. But it’s also a complex market, constrained by regulatory delays and costs, coupled with the introduction of biosimilars (competing versions of more complex biological drugs), which are an emerging and increasingly important part of the generic drugs market.

A five-year pricing deal agreed by the Government and pharmaceutical companies last November, which introduced a fixed limit on NHS spend on branded medicines, will also affect the generics sector. Exactly how remains to be seen. The deal is intended to increase availability and use of the best branded medicines and innovative treatments without burdening the taxpayer.

Warwick Smith, director general of the British Generic Manufacturers Association (BGMA), which represents 90 per cent of generic manufacturers in the UK, says: ‘The UK medicines industry is extremely efficient, and provides patients with a stable supply of affordable and accessible medicines throughout their life.

The BGMA welcomes any policies that increase access to innovative and proven medicines for patients. The mature competitive generic market in the UK already saves the NHS £11 billion a year, and provides important headroom to allow further investment into the uptake of new medicines,’ he says. ‘As yet it is too early to assess the immediate impact of the changes to the PPRS, but it is something we will monitor very closely to see how it unfolds.’

Price rises for innovation

But have generic prices fallen too far? A recent report by Visiongain, a business information provider for the pharmaceutical industry, looked at the generic drugs world market 2014–2024. It found that while volume of sales continue to flourish, the UK has been experiencing steep price declines over the past four years. This means that the UK market has one of the largest generic market shares in Europe by volume, but only a moderately large market by value.

The BGMA has expressed concern that the current level of revenue that generic drugs generate in the UK is now insufficient to support continued product development and innovation, especially as demand for complex generics and biosimilars is likely to increase, requiring higher research and development expenditure in the future. ‘Prices are at a tipping point and the Department of Health needs to be aware that it can’t be squeezed further,’ says Mr Smith. ‘There could be things that the DH could do to change the dynamics slightly, but it’s a very complex area.’

Supply issues

In addition to pricing problems, in recent years pharmacies and the Pharmaceutical Services Negotiating Committee (PSNC) has noticed a significant increase in the number of high-volume generic products experiencing market shortages.

‘The causes of these are complex and impacted by wider market forces, such as changes to active pharmaceutical ingredient costs as well as consolidation of generic manufacturers,’ says Komal George, PSNC head of support services. This is alongside problems with the supply of branded medicines. ‘Shortages are having a real impact on both community pharmacies and patients. The PSNC and others have repeatedly pressed for solutions.

‘At the DH’s supply chain forum meetings last year, many supply chain stakeholders backed the findings and recommendations of the All-Party Parliamentary Group’s inquiry into the matter. More recently, the PSNC and wholesalers (BAPW) both pressed for the Pharmaceutical Price Regulation Scheme (PPRS) to incorporate robust provisions to ensure speedy access to medicines needed by pharmacies, and were disappointed that nothing was included.

‘Community pharmacy on its own will not be able to resolve the issues, but we continue to look for ways to improve the situation, for example by pressing the DH to find and agree to a new system for dealing with the pricing of medicines in short supply, and to fully recognise the impact that shortages have on margins.’

In the meantime, the PSNC is encouraging contractors to report any problems directly to them, so it has up-to-date information. Pharmacies can do this using an online feedback form or by calling the PSNC Information Team on 020 312 0810.

Innovation and profitability

Not all pharmacists see supply of generic medicines as an issue. Award-winning pharmacist Ashley Cohen from Leeds, who has grown his Pharm-Assist Healthcare business from one to five pharmacies over the past eight years, argues that you need to establish good relationships with wholesalers and short-liners. ‘We don’t necessarily go for the best prices, but instead have negotiated 90-day payment terms,’ he says. ‘Cash flow is tight so we tend to buy one month at a time rather than going for the better deals and buying in three to five months’ stock at a time.’

A good generic medicine partner can help to minimise the risk of supply problems and negotiate prices. Actavis, for example, says it has a generics portfolio of more than 745 products and offers Actavis Accumulator and Partner pricing schemes through its wholesalers. The scheme ensures profitability is maintained by adapting the amount paid in response to any concessionary pricing reimbursement changes. The company is also innovating in education through its Actavis Academy, which offers 35 online CPD courses. Pharmacists can also download the Actavis Academy app.

The ‘nocebo’ effect

Pricing and supply issues aside, patients need to be reassured that generic medications are as effective as their branded counterparts. Research indicates that some patients may perceive generics to be of lower quality, and that this can influence patient behaviour during treatment. This is particularly the case for patients with long-term conditions, where alteration in their usual medication can raise doubts in their minds.

Patient concerns about the side effects of a medicine and its necessity are both big factors in non-adherence, according to Professor Rob Horne, who spoke at last year’s Royal Pharmaceutical Society conference. ‘When patients have negative beliefs about a medicine, they are more likely to experience side effects, otherwise known as the “nocebo” effect,’ he says.

‘If you switch a treatment brand without the patient’s consent it can adversely affect adherence and perceived efficacy and toxicity. Switches of this kind should not happen without first discussing the change with the patient, inviting questions and offering strong reassurance,’ says Mr Horne.