Off to Dubai - the NHS will pay.

This article is another Daily Telegraph Exclusive – an undercover exposure of the [alleged] sharks of the Pharmaceutical Industry and how they prey on the NHS [allegedly] depriving the NHS of many £millions;

 

Hallelujah: £120 for drugs that cost pennies.

Telegraph.co.uk  Sunday 23 June 2013

 

It was a warm spring day in Newcastle and the conservatory overlooking the manicured grounds of the hotel was full of couples eating lunch in the sunshine.

By Holly Watt, Claire Newell and Ben Bryant

At a table at the rear of the hotel’s restaurant, a middle-aged executive from a leading pharmaceutical firm was attempting to secure a lucrative contract to provide NHS prescription drugs to a new firm of high street chemists.

His company, Quantum Pharmaceutical, one of the biggest specialist drugs firms in the country, had recently spent £150,000 taking a group of chemists to Verbier, Switzerland, for 10 days of skiing. No one had to “put the hand in their pocket”, he boasted.

Last year, they had taken clients to Sardinia, while another group was soon off to Dubai for a “party”. Leaning forward, Leo McDermott, the business development general manager, explained, “I’m trying to paint you a picture of what we’re like and how we do business.

“In your position, doing what you’re doing, you could have the biggest parties of your lives in the next couple of years.” “I’d jump through all hoops [to] get your business,” he said with a smile.

However, there was no “business” to win. Unknown to him, the people sitting opposite him were not prospective clients but undercover reporters investigating how drugs companies are offering “incentives” to win contracts in a lucrative part of the pharmaceutical industry – providing “specials” to the NHS.

A whistle-blower working in the medical industry contacted The Daily Telegraph with concerns that specific pharmaceutical companies were colluding with some chemists to exploit the NHS pricing system that covered specials.

Following the allegations, Daily Telegraph reporters posed as representatives of an investment group in the process of buying pharmacies. They arranged meetings with five companies to discuss “deals” available to potential clients and found that companies were prepared to offer “incentives” and large discounts to win business.

The market for specials is keenly chased by drugs firms as – despite it involving taxpayers’ money – “the profits are very high”.

In 2011, the government tried to clamp down on how much drug firms could charge for each item and introduced a tariff that capped the price of some of the most popular products. There are currently 148 products covered by the tariff, with more than 20,000 off the list.

Despite the steps the government has taken to reduce costs, some pharmacists and other medical sources have expressed concern that the drug tariff prices have been set artificially high because the NHS uses data supplied by the companies who were previously selling the items for thousands of pounds. When one of the reporters asked Mr McDermott how the tariff price was set, he replied, “We can make these products for pennies. “So for them to come in and say on these lines, they’re £100 there, £120 there, £75, it was hallelujah.”

If a product is on the tariff, the pharmacist is able to claim the full amount even if they have not spent this money buying the drug. They are also given £20 as a dispensing fee to cover the cost of dispensing the product.

Such are the profits to be had, chemists are being offered lucrative “incentives” as drug firms compete for the business. When the reporters met Dhruv Patel, the head of unlicensed pharmaceutical sales at Pharmarama, he revealed that deals were available for “big customers”.

 

“We do sometimes hold box seats at Old Trafford, Arsenal, Tottenham, places like that, and so you have lunch with the players, and enjoy an afternoon, watch the match, and come back. We do rugby as well, we do rugby and cricket,” said Mr Patel. “It’s a thank you.” The executive also said that the company held training for its clients in “nice hotels” every six months.

When a reporter asked if the events were held in the Caribbean, Mr Patel replied: “It could be. Depends on your spend. Might be a first class ticket.”

However, Mr Patel was keen to stress that the system was above board. “We’re not sort of bribing anyone. You guys are already doing the business with us and it’s a thank you,” he said.

Mr McDermott from Quantum was keen to offer the reporters similar perks to win their business with conferences held in the tropics. “I’ll take you anywhere. But be careful. You’ve got to be careful, in the pharmaceutical world now, because there are new rules, laws and regulations and things, but conferences can be anywhere. The last one was in Vietnam.”

A spokesman for Quantum said that Mr McDermott’s suggestion that he would take the reporters “anywhere” was untrue and the company would “never” do this.

They said it was untrue that the company produced drugs for “pennies” and that they were “confident that the “NHS and taxpayer get good value for money”. They added that the Department of Health set the tariff price.

All the companies said they fully complied with their obligations under the Bribery Act.

 

Neil Harris

(a don’t stop till you drop production)

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