Branded Generics

In some parts of the country, branded prescribing is a key problem for contractors.

As Category M prices are set to include an element of purchase profit, a fundamental part of the new contract funding arrangements, reimbursement prices may be higher than manufacturer’s list prices. To save money, some Health Boards may encourage branded prescribing.

When products are prescribed generically, pharmacies seek to obtain the best available generics prices, driving down the prices being charged by wholesalers and manufacturers and in turn the Drug Tariff reimbursement prices and costs for the NHS. Prescribing branded generics or off-patent branded medicines profoundly affects the competition that drives down prices in the generics market and acts to drive up costs to the NHS. It can also lead to unequal geographical distribution of the funding under the contractual framework.

Branded generic manufacturers sell their brands into the market at prices that, of necessity, include the costs of their marketing efforts with LHBs and prescribers; costs not incurred by “true” generic manufacturers. They are able to list prices lower than those of the equivalent generic drug because they are not contributing, or are contributing only at minimal level, to the delivery of the agreed level of purchase profit that is part of the contractual framework funding. The contribution that is missing is consumed by marketing costs and the branded generic manufacturer’s own profits.

CPW is completely against this practice and has been raising the issue with both Health Boards and Welsh Government for several years, as has CPE with the Department of Health and Social Care (DHSC) in England.

Contractors experiencing issues with Branded Generic prescribing are asked to raise this with CPW to info@cpwales.org.uk