As the government announced a revised payment percentage under the statutory scheme to control the costs of branded medicines, generics manufactures asked the government to refrain from “unnecessary intervention.”

The government said in its response to a consultation that it will set a payment percentage required to limit the expected growth of net branded medicines sales to 1.1 percent nominal annual growth from the 2018 baseline. The change will take effect from 1 January 2019.

Reacting to the proposed changes, Warwick Smith, director general of the British Generic Manufacturers Association (BGMA) and the British Biosimilars Association (BBA), said the government has not taken the existing price control mechanism into account.

“We continue fundamentally to believe that the government should not intervene in pricing when there are already effective mechanisms such as competition or tenders to control prices of branded generics and biosimilars,” said Smith.

“It is clear that the government has failed fully to reflect that competition drives greater savings and value for the NHS than unnecessary intervention in the market that can blunt the positive effects of competition.”

Smith added that arguments advanced by the government would not stand up to scrutiny.

“We believe it bizarre to be advised to increase our tender prices so that we can pay a rebate on our revenues instead of simply charging lower prices,” he said.

As per the criterion set in the consultation response, payment percentages for 2019, 2020 and 2021 will be 9.9 percent, 14.7 percent and 20.5 percent respectively.

This is a downward revision of the payment percentages for 2020 and 2021 compared to those stated in the consultation, Department of Health and Social Care said in the response document.

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