This is interesting

We can actually see the value of being a monopoly supplier.

According to the NHS drugs price list, in October last year a 125ml course cost the NHS around £4 a bottle. Now, the NHS price – which includes the wholesale cost set by the drugs company and a built-in profit for High Street chemist shops – has risen to £21.87, a more than five-fold increase.

The NHS price of the 250ml course, also branded as Floxapen Syrup, has risen from £8.02 last year to £26.87.

Until last year, the medicine, which is prescribed to more than two million patients annually, was made by two of the world’s biggest drug companies, Teva and Actavis.

But the price increases coincided with a decision last year by Teva to stop making the drug – claiming it was too expensive and unprofitable – handing its rivals a virtual monopoly.

The subsequent price increase could cost the NHS and the taxpayer an estimated £44million in extra prescription costs for this drug alone.

5 thoughts on “This is interesting”

  1. We investigated other firms supplying generics to the NHS a few years back. That investigation got stamped on eventually, the NHS really doesn’t care and would much rather we hadn’t bothered to look into it. These small firms seem to have found a way of making a killing, where they aren’t a monopoly they are a cartel – unless the NHS starts to get a grip then millions more will be wasted every month.

    The executives of these companies all know each other, and they know how to play the game, and they know that nothing much will happen to them. Often the senior figures involved seem to be from the same part of the world.

  2. “Often the senior figures involved seem to be from the same part of the world.” Would you care to elaborate?

  3. Wow, the DM piece is *extra-specially stupid*. It manages to get outraged about relatively cheap and effective generic drugs remaining relatively cheap [*], whilst also retaining its ongoing outrage about the NHS refusing to fund insanely expensive and ineffective patented drugs.

    Presumably this reflects the fact that the branded, patented pharma companies have better PR department than the genericists.

    [*] not to say that there isn’t profiteering going on, but compared with the cost of in-patent drugs, all the examples the article lists are still trivially low-priced…

  4. The odd thing is (ok, the odd things are) that Floxapen is off-patent and Teva is a generic rip-off copycat manufacturer.

    So actually, anybody can make this stuff – if (and it’s a gigantic if) they can convince the FDA that they’re making it in a safe and well-managed way.

    So if only one company can actually be bothered, clearly it’s not such a big deal, is it?

    Oh and btw, “the same part of the world” is code for the fact that Teva is an Israeli company. Draw what conclusions you wish, but the other big player in these markets is Ranbaxy, which happens to be Indian.

  5. Andrew:
    1) that’s not the odd thing, that’s the whole bloody point.
    2) the FDA has less than bugger all to do with anything, this being an article about the UK.
    3) the other big player in this market is Activis, which is Icelandic.

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