Why the NHS Budget Should Be Cut 55

I just went to see my doctor for a renewal of my omeprazole prescription. For ten years I have been taking 80mg per day, for hiatus hernia. That is two packets of 7 x 40mg per week.

The doctor called up the prescription on her screen and it showed £15.50 per packet charge to her practice. She asked whether I had tried a cheaper alternative. The answer was yes, without success. So I went to collect a month’s supply – eight packets at a cost to the NHS of £124 less my £7.20 contribution.

Yet this is a generic, not a branded, medicine. When in Ghana I buy precisely the same medicine, by precisely the same manufacturer – Dr Reddy of India – in precisely the same packaging, for the equivalent of £2.80 per packet. It is genuine – believe me, with this unpleasant condition you would know very quickly if it was not genuine.

So why is the NHS practice paying £15.50 for a packet of medicine available individually at retail price for £2.80 internationally?

At the international retail price my medicine costs £291.20 per year. The NHS pays £1,612 per year.

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55 thoughts on “Why the NHS Budget Should Be Cut

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  • Richard Robinson

    Good grief. £1300/person/year … “and pretty soon that starts adding up to real money”.

    How is it done ? Just, the drug companies set different prices in different countries ?

  • Andy

    Prices are set by markets rather than costs.

    If it makes you feel better it means we are subsidizing medicines for Ghana.

  • Pete

    I can see this as an argument in favour of changing the law on drug sales – but how would cutting the NHS budget do anything but make things worse? Your GP has tried to get you to shift to cheaper drugs – so it’s not complacency on their part. Do you believe the NHS (NICE?) could buy cheaper but chooses not to?


  • Richard Robinson

    “how would cutting the NHS budget do anything but make things worse?”

    If we paid the Ghanaian price, that _would_ cut the budget ?

    Andy’s comment re subsidisation suggests that Reddy would then up the Ghanaian price ? I don’t know. There’s a whole other sub-argument there.

  • Craig


    I strongly suspect that none of the higher price reaches Dr Reddy’s in India. I wouyld bet a very large sum that there is no significant difference between what Dr Reddy’s received for the packet that ended up in Ghana and the packet that ended up in the UK.

  • edwin

    In Canada, we have a dispensing fee that is added to the cost of medication. I don’t have any bills in front of me, but my thought is that the dispensing fee can easily be significantly greater than the cost of the drugs.

    Here it makes big sense to get longer supplies of cheap prescription drugs as you only pay the dispensing fee once.

  • Douglas

    Craig you have found the crazy little profit margin at work within the NHS. The government through the drug tariff sets what it believes a medicine will cost (the £15 you mention). It will then remunerate the pharmacy that dispensed the prescription with this amount less your contribution and a percentage that is arbitrally decided every year (called the “claw back”).

    The pharmacy however is able to buy in the mediation at any cost it can find. Including you £3 pound packs from Ghana (provided it can prove a reputable supply chain). The pharmacist then pockets the price difference.

    It always brings a smile to my pharmacist colleagues when the newspapers get high and mightily about over paid GPs yet ignore them

    As an additional note not all medications have quite such a vast price difference as omeprazole, some are even done at a loss. This doesn’t however quite balance out and this is where the pharmacy makes its profit. Not from selling shampoo as they would like you to think

  • Jon

    Uh oh, Craig – argue for NHS budgets to be cut, and you play right into the hands of your Tory opponents. They’d love to cut the NHS budget, making the service so difficult to access that a demand is created for private alternatives. Then, a spiral of damage occurs as more of the middle classes leave the public service, leaving the poor with a system that meets their needs even less than it does today.

    I am all for saving money, but please don’t get caught buying into privatisation ideology!

  • Neil Barker

    Craig, why do you ask such silly questions? You already know the answer. The guys who are responsible for overcharging you for drugs are the same Zionist plotters who rattle your back door…. Surely your disciple agrees?

  • Abe Rene

    We have a capitalist economy. The profits go to the shareholders of the manufacturing companies and middlemen like pharmacists or wholesalers (so far as they can). The alternative is government regulation of drug prices.

  • Anonymous

    My doctor prescribe a statin for me. When I got home after picking up the tablets, I found the instructions to be in spanish. Nothing in english was on/in the box except the label put on by the pharmacist with my name and address.

  • Chundernuts

    How else with the pharmaceutical companies pay for all that slick advertising……….. I mean ‘research’.

  • Duncan McFarlane

    I agree that the drug companies have bought too much influence with the main parties and that this leads to excessive costs and needs to change, but the biggest problem with the NHS is PFIs (private finance initiatives)and ‘PPPs’ (‘public private partnerships’) which mean that most of our hospitals are being paid for by exorbitant annual payments from NHS trusts to PFI and PPP consortia of big firms. As a result the costs to taxpayers have increased massively while the number of fully trained staff has fallen, the number of beds available in new hospitals has fallen compared to those they replace (as most replace 2 or 3 older hospitals.

    The cost and time taken to carry out basic maintenance (e.g changing a light bulb) have also gone through the roof under PFIs and PPPs.

    Several people who work in NHS hospitals have told me about this and Professor Allyson Pollock and others have done a lot of studies of it.

    If we want to reduce NHS costs we need to renegotiate PFIs and PPPs and also have lawyers on the look-out for breaches of contract by the PFI firms that can allow us to cancel the contracts (some of which are for a period of 50 or 80 years).

    Craig wrote “So why is the NHS practice paying £15.50 for a packet of medicine available individually at retail price for £2.80 internationally?”

    Probably because drug companies are paying money into party funds for both Labour and the Conservatives.

  • NomadUK

    Much as I dearly love Craig and his blog, and would vote for him in a second, whenever I hear anyone talk about cutting the NHS, I want to take a stout stick to his head, bundle him onto an aeroplane, and send him to live in the US for a few years. Then come back and tell me all about the overcharging, socialist hellhole we have here in the UK.

    There’s nothing wrong with the NHS that elimination of any taint of capitalism won’t solve. Well, that and cutting out IVF.

  • Leo

    If the NHS is mismanaged (and parts definitely are), or paying too much for something, then we should fix those things and spend the money better on helping people.

    NHS funding should never be cut, until the service is perfect; it should just be better spent.

  • technicolour

    Seconded love for Craig 🙂 but I agree with Jon, and others. Cutting the NHS budget will do nothing to reduce the price of prescriptions: why would it?

    And thanks, Duncan, for the background: Allyson Pollock’s very good, isn’t she? Another point people may like to consider is that the nearly bankrupt US health corporations have been circling round the NHS for some time; desperate to see a mass move towards private insurance and away from public health care. As the NHS itself becomes increasingly privatised, with concommitant layers of bureaucracy and the farming out of vital services, this is just what people are being forced to do.

  • Larry from St. Louis

    “So why is the NHS practice paying £15.50 for a packet of medicine available individually at retail price for £2.80 internationally?”

    Thank you, Ambassador Murray – you’ve just reminded me of how lazy, naive university students think, thus reminding me of my university days.

    The effect of your sort of naive thinking would be to raise drug prices in Ghana.

  • steve

    You don’t need to go to Ghana to find this low price. In Spain the same drug is about the same price as in Ghana. Of course with the coalition governments plans for the GP-led NHS we will see drug prices rise even more: Same overall money going to the NHS so need to get upset on that point but in a structure which will inexorably lead to more private (US) profiteering at taxpayers expense.

  • Anonymous

    ‘Our’ Government is owned by corporate/banking interests. The purpose of government is to serve them not us. They are parasites. We are sheep. They take all they can but usually remember to leave us still living……for the next time.

  • Duncan McFarlane

    technicolour – good point – i remember the US representatives to the WTO in the 90s arguing that public health services and public education were “barriers to trade” and so should be eliminated under WTO rules

    Larry – Perhaps you, being supposedly so much more hard-working and so much more logical than the rest of us mere mortals in your thinking, could explain how calling for the British government to buy generic drugs more cheaply rather than branded ones at much higher cost, could possibly drive the price of generic drugs at £2.80 up by over 500% so they exceeded the cost of the branded ones at £15.50?

  • Number6

    It’s possible that our NHS does not serve the people but is actually a racket to serve the big drug companies derived from IG Farben, whose controllers have had enough of us now and who now wish to implement mass genocide by introducing GM and flouride into the food chain, which possibly offers more opportunities for more profit.

    One sickness of our system is that pension funds depend on the profits of the big Nazi-related drug companies.

    We must not forget certain facts about Nazism.

    1. it was a creation of the Wall Street/City of London Axis-of-Evil for war and trial of evil economics and science

    2. after WW2 Nazism did not die, but was rather broken up into smaller pieces and survived. IG Farben is one prime example. Its children are bringing in GM. It was the Nazis who used flouride to supress populations en masse.

  • somebody

    Many of these generic drugs are made by Israeli owned companies when I did some researching.

  • Larry from St. Louis




  • Clark

    Douglas at July 6, 2010 2:36 PM,

    thanks for exposing the mechanism of this particular scam. There must be hundreds like this, all involving public expenditure.


    it isn’t often that I disagree with you, but I’d regard reducing the NHS budget as far too blunt an instrument for trying to solve this type of problem.

  • Chris Dooley

    Surely what you are asking for, is better regulation of the pharmacies, not actual cuts to the NHS.

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