In a service case where a contractor made a large number of broken bulk claims which were unjustified, the then FHSA decided that constituted a breach of the TOS and recommended a very large withholding. The conduct was also regarded as fraud by the Crown Court, resulting in a heavy fine.
Miscellaneous Matters
Clause 12. Out of pocket expenses over 50 p may be claimed in certain circumstances.
Clause 13 extends the broken bulk rules in Clause 11 to allow for the payment of the full cost of using reconstituted products with a short life.
PRICES IN PART VIII
Part VIII contains a list of generic drugs which, if ordered on an NHS pre- scription, will be reimbursed to the pharmacy at the prices stated.
List Prices
Pharmacists are paid the DT basic price for dispensed medicines, less a dis- count as set out in Clause 6. If a drug is included in Part VIII, the price shown will be used for reimbursement regardless of what a pharmacist has dispensed to meet the order.
Exceptionally, when the DH has identified a shortage of a Part VIII generic, it may grant that product NCSO status. The pharmacist can endorse the form ‘NCSO’ and receive a payment based on what he has supplied.
For products ordered and supplied as a branded product, that DT basic price is the usual wholesale list price.
For generics, the price paid is usually set out in Part VIII. For products not listed, there the price will be the wholesale list price.
Category B
This contains less common drugs. The reimbursement price is calculated from a weighted average of the list price from AAH, Alliance Healthcare (Distribution) Ltd, UCB Pharma and Thornton & Ross.
Category C
These drugs are not readily available as a generic. The price is based on the list price of a particular brand, manufacturer or supplier.
Category M
This category also contains drugs which are readily available as a generic.
However, in this case the reimbursement price is calculated by the DH based on information submitted by manufacturers.2
Data collected for the latest quarter from manufacturers is analysed over the following quarter and is used to determine individual drug reimbursement for the quarter after that.
The Category M scheme is a voluntary (non-contractual) one made by the Secretary of State and the representative industry body within the meaning of Section 261 of the NHS Act 2006. For the purpose of this agreement, the Secretary of State recognises the British Generic Manufacturers Association (BGMA) as the appropriate industry body as set out in Section 266(6) of the NHS Act 2006.
All companies supplying generic medicines are able to join the relevant scheme.
Those which do not join this Scheme or which are denied membership in accordance with the Scheme are subject to any statutory scheme setup under Sections 262–264 of the NHS Act 2006. Sections 262–264 of the NHS Act 2006 govern the price that may be charged for NHS medicines and the level of profit derived from their sale through statutory schemes.
Those sections do not apply to members of this Scheme.
The current scheme is intended to operate until 1 January 2014.
Details of the scheme may be found here.3
THE BLACKLIST AND THE SELECTED LIST
Any food, drug, toiletry or cosmetic may be prescribed on an NHS prescription unless the product is listed in Part XVIIIA of the DT. In 1984, the Government issued a list of preparations which would no longer be prescribable on NHS pre- scriptions. Initially, seven categories of medicine were examined and a selected range of drugs would be available on the NHS in seven categories: antacids, laxatives, analgesics for mild-to-moderate pain, cough and cold remedies, bitters and tonics, vitamins, and tranquillisers and sedatives.
The products excluded were mainly those which were ineffective, too expen- sive or with no medicinal use. Many were products which could be bought OTC.
The DH estimated the change would mean a saving of £75–100 million.
The Blacklist
The ‘Blacklist’ is found in Schedule 1 to the NHS (GMS Contracts) (Prescription of Drugs, etc.) Regulations 2004 which is reproduced in Part XVIIIA of the DT.
According to Regulation 2 of NHS (GMS Contracts) (Prescription of Drugs, etc.) Regulations 2004:
A drug, medicine or other substance listed in Schedule 1 may not be ordered for patients in the provision of medical services under a GMS Contract.
The Selected List
The ‘Selected List’ is found in Schedule 2 to the NHS (GMS Contracts) (Prescription of Drugs, etc.) Regulations 2004 which is reproduced in Part XVIIIB of the DT.
According to Regulation 3 of NHS (GMS Contracts) (Prescription of Drugs, etc.) Regulations 2004:
A drug, medicine or other substance specified in an entry in column 1 of Schedule 2 may not be ordered for a patient in the provision of medical services under a GMS Contract unless:
that patient is a person of a description mentioned in column 2 of that entry and that drug, medicine or other substance is prescribed for that patient only for the purpose specified in column 3 of that entry.
The items included on the list may only be prescribed for the patient groups and for the purpose listed in the Tariff. The pharmacist is under no obligation to verify these.
Prescribers must endorse prescriptions for these products ‘SLS’. If the
‘SLS’ endorsement is missing, the prescription should not be dispensed and will not be passed for payment by the NHS Prescription Services. Pharmacy staff cannot make the SLS endorsement.
Appliances
Only the appliances listed in Part IXA, B and C may be supplied.
For appliances, the quality will be determined either by an official standard referred to in the name, for example absorbent lint BPC or by a specification in the DT itself. DT Technical Specifications are obtainable on request from the PPA.
Part IX of the DT lists the appliances and dressings which may be sup- plied. The list is very specific, in some instances only certain sizes may be
supplied although others are made. For example only 10 cm Non-Sterile Gauze Swabs packed in 100 s may be supplied.
In some entries, where a general specification is given, any make which meets the specification may be supplied, for example Open Wove Bandage Type 1 BP 1988. In others, only the specified makes may be supplied. This is particularly noticeable where items for incontinence are concerned, where the detail extends to the model number.
Chemical and Diagnostic Reagents
The only chemical reagents which may be supplied are those listed in Part IXR. According to Section 275 of the NHS Act 2006, ‘medicine’ includes such chemical reagents as are included in a list approved by the Secretary of State for the purposes of Section 126.
Some diagnostic reagents are regarded as drugs.
Regulation 2 of the 2012 Regulations states:
‘drugs’ includes medicines.
The effect is that the DT can make provision for diagnostic reagents only if they are drugs, chemical reagents, medicines or appliances. Since it is dif- ficult to regard something used for determining whether an illness exists to be the means of treating that illness, diagnostic reagents might not be regarded as medicines.
The definition of a medicinal product in the Medicines Act 1968 specifi- cally includes a substance used in ‘diagnosing disease or ascertaining the existence, degree or extent of a physiological condition’.
The Human Medicines Regulations 2012 use a different wording.
Regulation 2(1) states:
In these Regulations ‘medicinal product’ means:
(a) any substance or combination of substances presented as having properties of preventing or treating disease in human beings or
(b) any substance or combination of substances that may be used by or administered to human beings with a view to:
(i) restoring, correcting or modifying a physiological function by exerting a pharmacological, immunological or metabolic action or
(ii) making a medical diagnosis.
Non-dispensing GMS contractors may claim personal administration pay- ments for the same diagnostic reagents.
HOW ARE PAYMENTS MADE?
The DT lays down the basic rules which will be followed by the PPA when calculating the payments to be made in respect of the drugs, etc., supplied on Forms FP10 and variants.
Basically, payment is made for the quantity supplied on the script. The price paid is calculated from the normal wholesale price of the product for supply to community pharmacists. This price is normally set out by the manu- facturer in price lists.
A discount is deducted from the total due to each contractor for each months’ dispensing. The discount is calculated according to the total amount due, on a sliding scale constructed to reflect the discounts generally achieved by contractors in their purchasing.
Zero Discount
The DT contains two ‘Zero Discount’ lists in Part II. These lists contain either descriptions of product groups (e.g., insulins for injection) or individual product names (e.g., Cystagon capsules; crystal violet powder BP 1980). No endorsement is necessary. The price for reimbursement will not have any dis- count taken off.
Containers
Part IV specifies that card containers may only be used to dispense foil or strip-packed tablets, capsules, etc. All other medicines, including creams and ointments, must be supplied in airtight containers of glass, aluminium or rigid plastic. Where appropriate, a dropper bottle or separate dropper shall be used.
Borderline Substances
Under the NHS, a general medical practitioner may prescribe (and the NHS may pay for) only drugs, medicines and certain appliances. Drugs and medi- cines are not clearly defined, but the category does not normally include food or cosmetics. Hospitals are not restricted in the same way and are able to pro- vide anything needed for the care of the patient.
Part XV of the DT contains two lists providing information on borderline substances.
List A is an alphabetical index of the approved borderline products and the conditions they may be prescribed for.
List B is an alphabetical index of medical conditions and related approved products for managing those conditions.
The Advisory Committee on Borderline Substances advises on the clas- sification and on whether or not they should be prescribed by GPs at NHS expense or prescribed only for patients with specified medical conditions.
PRICE CONTROL OF NHS MEDICINES
The prices of medicines supplied for NHS use are controlled in a number of ways.
Pharmaceutical Price Regulation Scheme
Firstly, the majority of branded medicine manufacturers belong to a voluntary price regulation scheme. The current scheme, called the Pharmaceutical Price Regulation Scheme (PPRS) was agreed between the DH and the Association of the British Pharmaceutical Industry (the trade organisation for the pharma- ceutical industry). It came into effect on 1 January 2009 and is scheduled to run for 5 years. It covers those medicines which are manufactured by scheme members and which:
(a) have EC or UK marketing authorisations;
(b) are sold as branded products; and (c) are supplied to the NHS.
The scheme includes branded medicines regardless of whether patent protec- tion is in force, and medicines supplied on tender or on contract. OTC medicines dispensed against an NHS prescription are included. Generic medicines, ‘standard’
branded generics and OTC medicines sold directly to the public are not included.
A ‘standard’ branded generic is defined as an out of patent product to which the manufacturer/supplier, who is not the originator company, has applied a brand name and that is directly comparable to a true generic that is readily available.
Under this scheme, prices are controlled indirectly. The control is exerted by limiting the profits made by manufacturers. Target profits are set as a per- centage of capital invested. If the figure is exceeded the company is required to reduce its prices or to make a repayment to the DH. However, prices may only be raised with the approval of DH. A company has freedom to set the price for new products within the constraint of the profit target.
Proposed Changes to PPRS
As trailed in the White Paper Equity and Excellence: Liberating the NHS, value-based pricing of medicines will be introduced into the United Kingdom from January 2014. After that drug prices will be set according to the value medicines provided, with access likely to be no longer limited by NICE-set cost-effectiveness thresholds.
Value-based pricing will cover new medicines only and a successor scheme to the current PPRS agreement will be agreed to cover existing medicines.
The proposed new schemes represent the biggest reform to the pricing of medicines in the United Kingdom since the PPRS was set up more than 50 years ago.4–6
Statutory Control of Prices
Membership of the PPRS is voluntary. Companies that choose not to become members of the current PPRS are subject to the statutory price control under
Section 261 of the NHS Act 2006 (see below – Control of Branded Medicine Prices).
Legislation to Control the Prices of Branded Medicine
A company may choose not to join the PPRS scheme or may be excluded by the Secretary of State for Health if, for example, it has failed to comply with the requirements of the Scheme.
In such circumstances, a different, statutory scheme would prevail.
The Health Service Medicines (Control of Prices of Branded Medicines) Regulations 2000, SI No 123, came into force on 14 February 2000 limiting the maximum price of prescription only, branded medicines supplied to the NHS and requiring manufacturers and suppliers of branded pharmaceutical companies to provide the DH with information on sales income and discounts.
Since then there have been periodic amendments and replacement regulations.
The current rules are found in the Health Service Branded Medicines (Control of Prices and Supply of Information) (No. 2) Regulations 2008, which are amended by the Health Service Branded Medicines (Control of Prices and Supply of Information) Amendment Regulations 2011.
The Regulations, which apply to the United Kingdom, control the price of branded medicines sold for NHS purposes. They apply only to medicines which:
(a) have EC or UK marketing authorisations;
(b) are sold as branded products;
(c) are supplied to the NHS; and
(d) are supplied by companies which are not scheme members within the meaning of Section 262 of the NHS Act 2006.
Under the Regulations, the maximum price which may be charged for the supply for health service purposes of a branded health service medicine of a particular presentation shall not exceed:
(a) 94.5% of the 2008 price and for newer products the initial price.
Financial information must be provided to the DH.
There are penalties for failing to supply information and for supplying above the specified price.
Legislation to Control the Prices of Generic Medicines
The NHS reimbursement price for a generic medicine listed in Parts VIII and IX of the DT is the price stated in the DT.
However, maximum prices can be set by the DH.
The Health Service Medicines (Control of Prices of Specified Generic Medicines) Regulations 2000 SI No. 1763 came into effect on 3 August 2000.
These Regulations allow the DH to control the prices of generic medicines which are sold ‘for the purposes of the NHSs in England and Wales, Scotland and Northern Ireland’.
Under the Regulations, the maximum price which is charged by a manu- facturer or supplier for the supply of a specified generic medicine for health service use shall not exceed the ‘specified price’.
‘Supply’ means supply by way of sale to a person lawfully conducting a retail pharmacy business or to a registered medical practitioner, in order to enable that person or practitioner (as the case may be) to provide pharmaceuti- cal services.
The ‘specified price’ is the price specified in the list. Provision is made for the maximum price to be increased.
The Regulations apply only to the medicines specified in the list of con- trolled prices.
Printed copies of the list are available from the DH.
The Regulations apply only to medicines that have marketing authorisations.
The manufacturers and wholesalers must provide sales information to the Secretary of State. There are penalties for failing to supply information, and for supplying above the specified price.
Legislation to Require the Supply of Pricing Information
The Health Service Medicines (Information on the Prices of Specified Generic Medicines) Regulations 2001 No. 3798 require companies to provide informa- tion on the prices of specified generic medicines supplied to the health ser- vices in the United Kingdom. The Regulations apply only to information on medicines specified in the list of medicines published by the DH.
Appeals
A manufacturer or supplier affected by price controls made under the statu- tory provisions has a right of appeal in accordance with The Health Service Medicines (Price Control Appeals) Regulations 2000 SI No. 124.
Control of OTC Prices
Following a decision of the Restrictive Practices Court on 15 May 2001, there are no longer any controls on the prices of OTC medicines sold to the public.
Self-Assessment Questions
1. List the broad categories of information in the DT?
Answer: The DT contains: a list of drug prices paid for dispensed prescrip- tions; the amount of fees and allowances to be paid for dispensing; detailed
ADDITIONAL RESOURCES
1. http://www.nhsbsa.nhs.uk/924.aspx
2. http://www.nhsbsa.nhs.uk/PrescriptionServices/1821.aspx
3. http://www.dh.gov.uk/en/Publicationsandstatistics/Publications/PublicationsPolicyAndGuidance/
DH_115260
4. http://www.abpi.org.uk/our-work/library/industry/Documents/Understanding%20the%20 pprs%202009%20final.pdf
5. http://www.dh.gov.uk/en/Healthcare/Medicinespharmacyandindustry/Pharmaceuticalprice regulationscheme/PPRSlegislation/DH_092413
6. http://www.parliament.uk/briefing-papers/post-pn-364.pdf
information on appliances; rules to follow when dispensing NHS prescrip- tions, for example what can and cannot be prescribed on NHS prescriptions and by which class of practitioner, instructions on endorsements; and lists of products which are not allowed on NHS forms.
2. List the basic rules for prescribing by GPs?
Answer: Doctors may prescribe any medicine, unless its use at NHS expense is specifically prohibited by the Secretary of State, or its use is restricted to specified circumstances. The list is not confined to the drugs listed in the DT, or to licensed products. Doctors may prescribe an appliance or chemical rea- gent, only if its use at NHS expense is approved by the Secretary of State, and only in the circumstances specified. Doctors may prescribe a ‘borderline sub- stance’ only if its use at NHS expense is approved by the Secretary of State, and only in the circumstances specified.
3. Under what circumstances may a community pharmacist dispense a different quantity from that ordered?
Answer: The quantity supplied may deviate from the exact quantity ordered only in specified circumstances as set out in Clause 10. These are where it is particularly difficult to open the container and dispense a part of its contents.
This applies to products which are: sterile, effervescent or hygroscopic, liquid products for addition to bath water, coal tar preparations or viscous external preparations packed in a castor, collapsible tube, dropper bottle, pressur- ised aerosol, puffer pack, roll-on bottle, sachet, shaker, spray, squeeze pack, container with an integral means of application or any other container from which it is not practicable to dispense the exact quantity.