Pricing scandal sees NHS pay £89 for cod-liver oil capsules

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Taxpayers are being charged up to 40 times the usual cost for common over-the-counter products being prescribed by NHS doctors, The Telegraph can disclose.

Fish-oil capsules

The NHS confirmed that inflated prices were being paid by taxpayers and announced the situation was being reviewed Photo: ALAMY

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By , Claire Newell and Ben Bryant

10:00PM BST 15 Jul 2013


The NHS is currently paying up to £89.50 for cod-liver oil capsules — identical versions of which can be bought on the high street for about £3.50. Taxpayers are also being hit with inflated costs for vitamin E, evening primrose oil and other over-the-counter products.

Despite being freely available without prescription, the products are all regularly prescribed by GPs and NHS doctors — a situation which now appears to be being exploited for commercial gain. The prescription pricing scandal has emerged in the past two years because of a loophole in the rules which allows chemists to select “suitable” products from drug companies and bill the taxpayer.

The disclosures will add to fears that the system is not being properly policed. Last month, The Telegraph revealed that drug companies were colluding with pharmacists to overcharge the NHS millions of pounds for a group of drugs called “specials”.

The prices of more than 20,000 drugs could have been artificially inflated, with backhanders paid to chemists who agreed to sell them. Representatives of some pharmaceutical companies agreed to invoice chemists for drugs at up to double their actual cost. In the wake of the disclosures, this newspaper was contacted by a well-placed whistleblower, who raised concerns about the pricing of over-the-counter medicines being prescribed.

The whistleblower said: “When they got a prescription for something like cod-liver oil, pharmacists used to walk round the counter, pick a pack off the shelf and then charge the NHS that cost. Now, all of a sudden, they are dispensing packets of cod-liver oil for £89. They don’t even keep these products in the open sale area of the pharmacy.”

The NHS confirmed that inflated prices were being paid by taxpayers and announced the situation was being reviewed.

“While doctors should have the power to prescribe the medicines they think best for their patients, those medicines must also be good value for money,” said the health minister Lord Howe. “In a time of austerity, anything the health service provides should get the best possible value for taxpayers. Officials are working to see how the NHS can get a better deal on products like these.”

The issue around the prices paid for prescribed over-the-counter products centres around a small pharmaceutical company called Ennogen, in Kent. The firm, which was only set up in 2011, sells a wide range of common products marketed under brand names, and has quickly become popular among chemists. It is now supplying about one in 10 of the products under scrutiny.

It sells cod-liver oil under the brand name Elive. The 500mg capsules of Elive cod-liver oil cost £87.20 for packets of 30. From Seven Seas, they cost £2.08 for 30.

Elive extra strength capsules of cod liver oil – 1.05g capsules – cost the NHS £89.50. The comparable product from Seven Seas costs £3.50 – almost thirty times less.

The increase of chemists prescribing the Ennogen cod liver oil has been dramatic.

The Ennogen extra strength cod liver oil was first prescribed in August last year, with seven prescriptions being dispensed at a total cost of £972. By October, chemists were prescribing £8,577 of the product in a month. In March of this year, Ennogen was reimbursed £17,252 by the NHS for extra strength cod liver oil.

Last August, Ennogen supplied 0.2% of the cod liver oil products dispensed by chemists. By March this year, they were supplying 10.7% of the cod liver oil products dispensed by chemists.

Ennogen also produces zinc sulphate capsules, with 220mg strength, under the brand name Zing. Zinc sulphate is prescribed to combat zinc deficiency and to aid in keeping body tissue healthy. Ennogen’s list price for this product is £89.50. Other capsules, containing exactly the same amount of active ingredient, are reimbursed at £6.95.

Zing was also launched in August last year, filling only one prescription and being reimbursed £268.50. In March, the NHS paid out £14,263 for Zing.

Ennogen also produces Enstar XL tablets (100mg), which is their brand name for diclofenac sodium, used for a variety of conditions, including rheumatoid arthritis.

Chemists are able to reclaim £62.50 for a 28 pack of Enstar. A comparable product is Voltarol, which has the same amount of active ingredient. Chemists can only reclaim £9.47 for a product with the same amount of active ingredient when they sell a version made by Novartis Pharmaceuticals.

Other pharmaceutical companies are charging large amounts for standard drugs.

Cubic Pharmaceuticals, which is based in Rochester, also supplies “NP8” drugs – those not listed on the Drug Tariff.

Cubic Pharmaceuticals also charges £89.50 for zinc sulphate capsules.

Calamine lotion from Cubic costs £9.50 for 200ml. The same product costs £1.09 from Boots or 85p from Tesco.

The reimbursements system is managed by the NHS Business Services Authority.

The Chief Executive of the NHS Business Services Authority is Nick Scholte, who is paid between £150,000 and £155,000 a year.

Steve Barclay, Conservative MP who sits on the Public Accounts Committee said that senior NHS managers had questions to answer.

“It is unbelievable the NHS is paying over 40 times the market rate for everyday supplements such as cod liver oil. It also leaves senior NHS managers serious questions to answer. They are paid high salaries to make sure the NHS runs efficiently, but these figures suggest they have failed. Whilst the NHS budget has been ring-fenced this is no excuse for waste and this money could have been put to better use further improving services”

A spokesman for the authority said: “The prices held on the database are the list prices set by the manufacturer and communicated to the NHSBSA.”

A spokesman for Ennogen said: “Ennogen Healthcare manufactures a range of high-quality generic healthcare products, produced to approved standards. In the interest of transparency, we register the prices of all our products with the appropriate NHS authorities. All our products are subject to competition and a range of complex market forces which allows the NHS to achieve good value for money.”

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