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Pharmaceutical Services Negotiating Committee

Drug Tariff News

PSNC's Update on NCSO/price concessions

PSNC has today issued an update about its ongoing work on price concessions and reminded contractors of the need to challenge suppliers charging prices that are above the agreed concessionary prices and to send invoices to PSNC where those higher prices are still charged.

Background

In recent months shortages have become a more significant problem for contractors, in part because an increasing number of high volume generic products have been affected. Manipulation of the market is also making the situation increasingly complicated and appears to be having a significant impact in some regions. 

PSNC has been working hard to secure appropriate NCSO/price concessions for contractors where lines are not available at the Drug Tariff price as a result of a shortage. Concessionary prices are set by the DH, but we continue to challenge the DH where we do not believe these prices reflect actual market prices or do not have evidence that there are significant amounts of stock available at or below the concessionary prices. 

It is vital that contractors continue to challenge wholesalers where they are charging prices that are significantly above concessionary prices.  Although we know that most wholesalers would not do this, we have received reports of some wholesalers deliberately inflating prices and informing contractors that NCSO will be granted.  We also know that some contractors have successfully challenged high prices.

Pricing information

PSNC has been asked by some contractors to publish pricing information given to us by wholesalers. Publishing lists of some suppliers’ prices could result in us being legally challenged for breach of Competition law, so we are not able to do this.

Ongoing work

PSNC continues to work hard to reach agreement on price concessions as early as possible each month but given the limitations of the current model this is not always possible and we are in urgent discussions with the DH to find a longer-term solution to deal with generic shortages. Our aim in these discussions will be to find solution that is both fair for all contractors and that will minimise the opportunities for market manipulation.

Evidence from contractors’ invoices continues to be a vital part of this work, and where contractors are being charged prices that are higher than the agreed concessionary prices, we would urge them to challenge their wholesaler, and if this is not successful, to send their invoices to us.

Posted 29 April 2013

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