Charles Joynson, WaveData MD, decided to have a look at the differences between the average market price for generics and the English drug tariff. He wanted to know if the gap between the two was being squeezed, resulting in some of the misery pharmacists are going through at the moment.
Although looking at averages of hundreds of products probably isn’t perfect, it’s the best way we have presenting data in an understandable manner. The first thing that reared its head was that we couldn’t just rely on the list of products in the drug tariff, because hundreds of them are only used in hospitals and can have very high prices. However, even these do occasionally get used in primary care.
Therefore, we decided to weight the data based on the number of prices we picked up over the last 10 years. This meant that Riluzole Tabs 500mg 56 got a very high rating whereas Nicorandil Tabs 20mg 60 got a much lower score. This allowed us to narrow the data down to the top 1500 products that have been seen in our market price data (sourced from pharmacists and dispensing doctors over the last 10 years).
This approach allowed us to draw two virtually parallel lines showing that drug tariff and the market prices were following the same track. The only difference was that the profitability of generics had risen from about 30% 10 years ago to closer to 36% today. This means that other pressures such as are NHS funding, the community pharmacy contractual framework, spiralling costs, shortages and increased workload are causing loss of profit and closure.