Drug firm slashes prices after MoS investigation -saving taxpayer £500k

By Jason Lewis
Last updated at 12:42 AM on 25th July 2010

A drugs company under scrutiny for increasing the price the NHS pays for lifesaving pills by 1,000 per cent in two years has dramatically cut its charges after a Mail on Sunday investigation.
The firm slashed the price of its hydrocortisone tablets, used to treat kidney patients, by £7.40 – saving the NHS almost £500,000 on its monthly drugs bill.
The company’s boss had claimed the NHS ‘doesn’t care what it costs’ when he was asked to explain the price increases passed on to the taxpayer.
The price cut came as the Department of Health admitted it does not police the cost of everyday medicines supplied to the NHS.

A drugs company has slashed the price of its hydrocortisone tablets following a Mail on Sunday investigation

Despite claims of profiteering on some commonly prescribed drugs, civil servants said the department ‘does not regulate generic prices’.
The Mail on Sunday investigation revealed how some pharmaceutical companies were imposing huge price increases while earning
massive profits. Drugs firm Auden McKenzie was charging £44.40 for a packet of its 10mg hydrocortisone tablets, but on Monday – the day after our investigation was published – the company wrote to wholesalers cutting the price to £37 with immediate effect.
The firm had increased the price of the tablets for the NHS from £5 in 2008 to a peak of £48 earlier this year – making it about £2.4 million a month.

Company boss Amit Patel, 35, whose personal wealth is said to exceed £40 million, claimed the price rises were needed to pay for his firm’s new multi-million-pound factory production line.
He refused to say where the factory was or give any further details and said the price of the drugs would ‘creep back down’ because the firm had recouped much of its outlay.
In a previous interview with The Mail on Sunday, he said: ‘Joe Public doesn’t know what it takes to . . . revive these old drugs. Quite rightly . . . the Government views medicine as public safety, so they don’t care what it costs.’
He added: ‘To be honest, they don’t care what it costs. You either meet their criteria or you don’t market the product.’
Last week, he issued a statement denying that he had claimed the ‘NHS doesn’t care what drugs cost’ and saying he ‘strenuously denies ever discussing the production costs of the drug’.
Questions to Auden McKenzie’s media advisers asking for the reasons for the reduction in the price of the tablets went unanswered yesterday.
Between 2007 and 2008, the firm’s turnover rose from £5.3 million to £10.6 million and its profits trebled to £6.2 million.
Details of its more recent accounts – which coincide with the increased price of hydrocortisone – are not available and are listed as overdue by Companies House.

 

More...

• ‘NHS doesn't care about cost of medicine’: Drugs firms accused of profiteering by raising prices by ONE THOUSAND per cent

Another medicine under the spotlight is Flucloxacillin syrup, one of the most common antibiotics prescribed to children. It is used to treat a variety of skin conditions and throat infections.
According to the NHS drugs price list, in October last year a 125ml course cost the NHS around £4 a bottle. The current NHS price, unchanged last week, is £21.87, a more than five-fold increase.
The medicine is made by Icelandic drug giant Actavis and the price increases will cost the NHS an estimated £44 million.
In response to The Mail on Sunday investigation, the Department of Health claimed they were ‘aware that the prices of a small number of medicines have risen in recent times and we are reviewing what action may be taken’.
But they later ‘clarified’ these comments saying they were not carrying out any review.
A statement from the department added: ‘The Department of Health does not regulate generic prices and relies on competition to secure value for money.
‘As with any market, prices of medicines can go up or down for a variety of reasons.
‘No new review of generic pricing has been launched but where a price has significantly increased, as happens from time to time, the Department reviews these on a case-by-case basis to determine the cause of the price increase and its rationale.’
On Friday, the department issued a further statement which read: ‘The NHS has saved billions of pounds through the use of generic medicines.
‘The Department is committed to securing value for money for the taxpayer and large levels of savings have already been achieved by reducing the prices at which generics are reimbursed . . . However, we do not comment on specific cases.’