NHS Scotland’s data gatherers, ISD, report some costs are falling.

The annual publication by NHSScotland of medicines prescribing stats offers an important insight into the actual state of play on what is being prescribed, in what volume and at what cost.

The Dispenser Payments and Prescription Cost Analysis report feeds some interesting facts into what can be a febrile area of debate where opinions range from those who believe modern medicines are bankrupting the NHS, to those who believe that those same medicines are what is keeping people well, and at home and out of hospital, longer.

The pharma industry point to the enormous risks they take in researching potential new medicines, the up-front investment required, and the need for them to recoup that investment, to recoup the investments in all of the research that wasn’t successful, and to deliver a return to their investors during the limited period of patent protection.

On the other hand, NHSScotland and the Scottish Government look at the global pharma industry and compare its profitability to an NHS that is under enormous cost pressure to deliver more with little extra funding – which in turn means sometimes patients cannot get access to certain treatments.

The ISD (Information Services Division of NHS National Service Scotland) stats published in July show that the total cost of prescribing decreased by 0.5% for the year 2018/2019. This bucks the trend of the preceding decade where the cost of prescribing has risen by 20%.

Perhaps more interestingly, the actual cost of the items fell. The gross ingredient cost (the cost of items dispensed at their list price) fell by 2%. Reporting based on list price can be problematic as NHSScotland does not pay that price for many items as manufacturers routinely offer discounts, the reduced price being confidential. 

The net ingredient cost of items (the cost of items prescribed after the discounts taken by dispensers are applied) also fell by 1.3%.

Without getting overly technical, this all simply means that the average cost of prescribing medicines, per head of population in Scotland fell from £248.79 to £246.96.

At the same time, the increased expectations being placed on pharmacy meant the cost of providing pharmacy services rose by 5.5%.

It is unfortunately impossible to know whether these trends will be replicated in the future without knowing what is behind them in the first place. It is likely to be a mix of factors, including but not limited to the expiry of patents on some high cost medicines; the increased focus on medicines adherence and wastage; and the effects of the agreement negotiated between the UK Government and the medicines industry that caps to the cost of branded pharmaceuticals across the whole of the UK.

Given the increasing demand for NHSScotland treatment driven by demography, it is unlikely that, even if medicines themselves continue to be cheaper, the cost of providing them will drop in the long term.

In fact, the inflationary pressure of changing demographics makes these falls in cost all the more noteworthy and provides NHSScotland’s money people with a small respite to their daily grind of managing budgetary pressure.