APSM Blog

Tuesday, 8 December 2015

APSM corrects Daily Mail article market stats

An article published today (8 December 2015)  in the Daily Mail ‘High Street Chemists who charge the NHS £300 for skin creams that should cost £12’, contains a number of significant inaccuracies about the Specials market and APSM activities.
  
Here follows the APSM response to the facts presented within the article.


DAILY MAIL QUOTE:  The practice has been exposed by the BAD which says up to £400m a year of taxpayers’ money is being wasted on paying too much for these treatments.  Even 2% salicylic acid cream which can be effective for these conditions costs the NHS £75m per year.

APSM Response:  Dermatology Specials are a small proportion of Specials spend in primary care – approximately £1m per year.

The total spend on Specials in England in 2014 was £89.5million in primary care.  A very small percentage of this is for dermatology specials through community pharmacy.   

Only a small number of Dermatology products are in the top 500 specials*.    In the last 3 months to September 2015, 1404 items were prescribed for topical use (which would include dermatology products) at a cost of £259,360.  Over a year this is approximately £1m. (Just over 1% of all spend).

Of the 3 products mentioned specifically, Coal Tar 5% was 220 prescriptions in last 3 months less than£200,000 per year (average cost £180 - £190).  Coal Tar 10% ointment 100g was 23 in the last 3 months – less than £30,000 a year. 2% salicylic acid in aqueous cream 100g was 63 prescriptions in 3 months - approximately £50,000 over a year.

These figures are based on data for England. The estimated value for Dermatology Specials in the community including Scotland and Wales is £1.2m (an additional 20%).

*The NHS BSA lists the top 500 most reimbursed specials (in Primary Care) by cost (NIC) and number of items.  This includes items on the Drug Tariff as well as those not included in the Tariff and covers approximately 80% of the total spend on Specials each year.




DAILY MAIL QUOTE:  In Scotland they are still supplied by NHS prices but in England the pricing is governed by market forces

APSM Response:  The Scottish Tariff covers a smaller number of products (50) and uses a different mechanism for setting prices, although commercial and NHS prices are also taken into account.  Overall, the price of the majority products on the Specials Tariff in Scotland is similar to the England Tariff with some fluctuations (some are cheaper in England than Scotland and visa versa). 

Certain dermatology products may have been negotiated separately and we cannot comment on the process used.

The Specials Tariff is designed by the Department of Health to provide sustainability of supply and a mechanism to ensure that safe and effective specials are available to the NHS via a resilient supply chain that provides a fair return, ensuring the long term sustainability of the specials market.  The DH has a mechanism for deciding which products will go on Tariff and it is regularly reviewed. 


DAILY MAIL QUOTE: “The creams are made by 14 member companies”

APSM RESPONSE: Of our 13 members only a minority produce any of these creams and in very small volumes.  APSM members report that they produce a relatively small number of specials for dermatology supply to community pharmacy.  If they are asked to produce them they are generally bespoke ‘one off’ preparations, i.e. the ingredients are sourced and they are manufactured, quality checked and sent out the same day.




DAILY MAIL QUOTE:  “in prescriptions outside hospitals, £246 - £346 for every pot used”

APSM RESPONSE: The Tariff prices listed for these products as listed in the latest Tariff dated November 2015 they are:

-      100g Coal tar 5% in oint base  - £280.96
-      2% sulphur/2% salicylic acid in aqu cream  - £198.64
-       10% coal tar oint 100g - £216.36.

Prices in English November Part VIIIB




DAILY MAIL QUOTE: These traditional ointments contain coal tar, sulphur or sometimes dissolved aspirin, in aqueous cream, a base of paraffin oils used for generations for dry skin.

APSM Response:  The product examples used are not simple, effective or high street products.
Coal Tar is a particularly difficult product to manufacture.  Although it has been used for hundreds of years in skin preparations, there are concerns about its toxicity and known carcinogenic properties both for patients and those involved in manufacturer, so it can only be manufactured under special conditions.  Pharmaceutical standard coal tar as an ingredient is now very difficult to source – due to recent changes in safety and quality regulations there are now only a very limited number of raw ingredient suppliers worldwide and the cost has become prohibitive – in fact many licenced manufacturers have had to cease manufacture.   For these reasons, it is rarely used in manufacture for licenced pharmaceuticals or Specials.

In March 2013, the MHRA (Medicines and Health Regulatory Authority) issued a warning about the use of Aqueous Cream, particularly for children with eczema as it may be an irritant.  This is thought to be because of the, sodium lauryl sulfate (SLS), contained in emulsifying wax which is one of the ingredients of aqueous cream.  The National Eczema Society and NICE advise caution in its use.




DAILY MAIL QUOTE: Private manufacturers have come in as part of the drive to open up the NHS to market forces, but as a result patients and taxpayers are being penalised.

APSM Response:  Commercial manufacturers were set up in response to MHRA increased controls on specials quality and patient safety following the ‘peppermint water case’ in 2000, in which an infant died after an incorrectly formulated pharmacy preparation.  Specials are now rarely made up in a community pharmacy.  There are a small number of hospital manufacturing units which also have MHRA licences, but the commercial sector exists to meet the majority of demand.



DAILY MAIL QUOTE:  “The NHS is charged more than £300 a pot for products that could cost just £12


APSM Response: If an NHS manufacturing unit charges £12 then this reflects the price they charge, not necessarily the cost of the product – this would not be sustainable in a normal commercial environment.   The full costs of manufacture may have been allocated elsewhere within the NHS budget (staffing, capital investment, etc).   Also, for some medicines they may have been able to manufacture a batch in advance or at a later date and can achieve cost efficiencies this way, i.e. they are not always operating a same-day service. 

In England and Scotland a number of Hospital Pharmacy units are supplying Specials alongside commercial manufacturers and together we are providing essential services to patients.  However, most in-house hospital units are not geared up to large volume production across such a wide range of possible products so could not meet the demand for Specials – particularly in England. Therefore the majority of capacity and volume in the market comes from the commercial pharmaceutical manufacturing sector and so the cost structure of the market has to be based on a commercial rather than NHS funded model.

The Price Difference reflects the commercial model

The main purpose of Specials manufacture is to patient safety and to meet patient clinical need.  Commercial manufacturers are required (by the MHRA) to carry sufficient capacity to meet demands on a daily basis with more than 20,000 potential preparations on systems, it is not possible to predict demand so most orders are manufactured same day.  For the average manufacturer this can be 2-500 different orders per day.  There are inherent costs involved with maintaining a high level of production capacity to fulfil orders, as well as express delivery costs.    This same-day manufacture also includes a very stringent quality process (to pharmaceutical standards) – see attached – to ensure patient safety.  The costs associated with this intensity of commercial manufacture are reflected in the price.



DAILY MAIL QUOTE: “We have tried to discuss it with the APSM but says it doesn’t have to talk to us”.

APSM RESPONSE:  “We made a direct approach to BAD over a year ago to introduce ourselves.  We attended a meeting, shared information and agreed to attend future meetings of their Specials Working Group.”


DAILY MAIL QUOTE:  “Because of a commitment to open the NHS to market forces and competition, the Government has now prevented NHS pharmacies that manufacture these creams for hospital use from also offering them through community pharmacies”

APSM RESPONSE: “Our understanding is that any hospital pharmacy with an MHRA specials licence can – and do - supply to community pharmacy.”





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