Ultra-low medicines pricing is driving medicines shortages and costing more in the long run, the Company Chemists' Association (CCA) has warned.

In a recent report it suggested that the decision by the government to set ultra-low drug tariff prices was causing some manufacturers to withdraw from the UK market, with a knock-on effect on medicine availability and pricing.

And it called for an end-to-end review of the medicines supply chain, more competitive pricing for UK medicines, and an increased ‘retained margin’ available for community pharmacies to further incentivise the effective buying of medicines.

Atorvastatin price cuts cost £24.5m more in the long term

The CCA highlighted three medicines as examples of where reducing the list price of a drug has impacted supply: ezetimibe, atorvastatin and omeprazole.

Atorvastatin has been the most prescribed medicine in terms of numbers of prescriptions since 2016 and reached 65 million prescriptions in 2023/24.

Between September 2020 and April 2023, the amount of atorvastatin prescribed increased by 17%, while at the same time there was a 7% decrease in spend, the CCA highlighted.

This included a period between January 2022 and April 2023, during which the drug tariff price for 28 x 20mg tablets reduced from an average of £1.27 to £0.92.

From September 2020 to December 2021, the overall monthly cost to the NHS for the drug was around £3m, dropping even further to £2.6m between January and April 2023.

'On the face of it, this seems like good value for the NHS, and the taxpayer. Unfortunately, the long-term impact of the decrease shows otherwise,' the CCA report said.

During this period, 'at least one major manufacturer of atorvastatin tablets stopped selling to the UK', the CCA said.

'This led to an immediate reduction in supply and availability of atorvastatin for pharmacies. In turn this led to patient access problems,' the report added.

Price concessions had to be introduced as increased difficulty in getting hold of the medication resulted in higher purchasing costs for contractors.

And between May and December 2023, the average monthly cost of atorvastatin to the NHS was £6.1m.

And in January 2024, after stability in supply resumed, a new drug tariff price of £1.64 per pack was set - higher than the £1.27 before the period of ultra-low pricing.

The CCA suggested that the price reduction and subsequent loss of the major manufacturer cost the NHS £24.5m more than it would otherwise have done.

'Without action, vicious cycle of meds shortages will continue'

The CCA said that 'without action, the vicious cycle of shortages will continue, leading to more and more patients being affected'.

It called for the government to take 'immediate action' by spending more on 'competetive pricing' for medicines, 'to make the UK market more attractive for global manufacturers and suppliers'.

It also suggested that increasing the ‘retained margin’ available for community pharmacies would 'further incentivise the effective buying of medicines by pharmacies'.

And in the longer term, it called for an end-to-end review of the UK medicines supply chain.

'Stranglehold' on pharmacies must be released

CCA chief executive Malcolm Harrison commented: 'Saving pennies is costing the taxpayer pounds with patients facing a ‘new normal’ of rolling medicine shortages.

'Pharmacies find themselves at the sharp end – either being forced to dispense medicines at a loss or simply unable to source medicines for patients that urgently need them.

'The current model of penny-pinching simply no longer works in the public interest.

'The stranglehold placed on community pharmacies must be released so that they have breathing space to competitively buy medicines for the NHS.

'The Government must invest to make the UK a far more attractive place to supply medicines.'

A snapshot survey by The Pharmacist has suggested community pharmacists across the UK are spending a day a week week trying to alleviate medicines shortages.

And one pharmacy leader has shared five practical steps pharmacy teams can take when dealing with medicines supply problems.