Northern Ireland faces ‘huge’ rise in generic drug prices

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Northern Ireland will have to pay significantly higher prices for generic drugs once the Brexit grace period expires in December, a key political party leader has warned, echoing concerns among health experts over supply future in medicine in the cash-strapped region.

Steve Aiken, outgoing leader of the Ulster Unionists, told the Financial Times that his party, which holds the Department of Health in Northern Ireland’s power-sharing government, had “genuine concerns” about what will happen once the region has to test and authorize drugs under the EU regime while the rest of the UK applies national standards.

Under the Northern Ireland Protocol, which governs the implementation of post-Brexit trade issues in the region, medicines made in Britain will need to be licensed separately for use in Northern Ireland and undergo safety inspections and separate quality tests from next January.

The change means Northern Ireland may no longer be able to get drugs at “very reasonable prices” guaranteed by the NHS’ massive purchasing power, Aiken said. He added, without giving figures, that there would be a “huge price gap” if Northern Ireland were to buy in bulk with the Republic of Ireland or the EU instead.

In 2019, a study commissioned by the British Generic Manufacturers Association (BGMA) from Oxera, a consultancy, compared manufacturers’ actual selling prices in five European countries to mature markets. He found that prices for generic drugs in the UK were generally lower, often significantly.

Northern Ireland already has some of the longest treatment waiting lists in the UK and its health department recently warned it will need an additional £400m this year on top of its 6 £.5bn a year ‘just to stand still’. “Not only can’t we afford to spend more on health, but why would we?” Aiken said. “We are British citizens, why don’t we have the same opportunities as the rest of the UK in terms of wholesale purchases?”

Northern Ireland’s Department of Health referred the questions to the UK Department of Health and Social Care, which oversees the purchase of medicines across the UK. The DHSC said Northern Ireland would continue to benefit from price caps on branded medicines under the 2019 Voluntary Government-Industry Pricing and Access to Branded Medicines Scheme, which limits raising brand name drug prices at 2% per year for five years.

“Historically, for non-branded and generic drugs, we rely on competition to keep prices low,” the DHSC said. “This has led to some of the lowest prices in Europe and has allowed prices to react to market demand, ensuring that we are always able to secure availability of medicines for UK patients.”

The department would not speculate on generic drug prices in Northern Ireland when it could not take advantage of the UK’s purchasing power, but a person familiar with the situation suggested it “may be able to negotiate commercial discounts on [its] own” or by purchasing with the Republic of Ireland.

However, Northern Ireland has 2 million people, the Republic 5 million and Great Britain 65 million.

The generics industry manufactures four out of five drugs used by the NHS. Mark Samuels, managing director of BGMA, said the industry was able to deliver these high volumes at low prices by accepting low trade margins.

Unless the UK and Northern Ireland reach an agreement to mutually recognize each other’s licensing and testing systems, companies would have to duplicate lab testing, technical specialists and warehousing for products destined for Northern Ireland.

“Without political intervention, patients will face drug shortages, dramatically reduced treatment choice and restrictions on access to new products,” Samuels said, adding that health commissioners “may well consider a increased drug costs as a direct consequence”.

Mark Dayan, political analyst at the Nuffield Trust, which is an authority on Brexit, said pharmaceutical companies were more concerned about the situation in Northern Ireland than any other aspect of the supply of medicines after the UK left of the EU.

A key issue was the EU Falsified Medicines Directive, which requires anti-tampering security and a barcode-like unique identifier on the packaging to ensure item tracking.

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