Facts and figures
The off-patent industry thrives on simplicity and efficiency, combining high volumes with low margins. Years of downward pricing pressure have stretched and globalised the supply chain, as manufacturers have sought efficiencies to remain viable. The average generic medicine costs the NHS under £4, with most under £3 – of which between one third and one half covers pharmacy and distribution margins.
Medicines in primary care: key statistics
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Around 1.2 billion presentations are dispensed annually by community pharmacies.
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The Drug Tariff includes approximately 3,250 presentations and over 14,000 individual licences.
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For the first time, generic prescribing and dispensing rates exceed 80% (currently 80.66%).
The average reimbursement cost of an unbranded generic is £3.91, compared to £24.86 for a branded medicine.
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A 1% switch from branded to unbranded dispensing saves the NHS £251 million.
Market dynamics
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The £20.6bn overall drugs cost for England (not including rebates) is split evenly between primary care (£10.1bn) and secondary care (£10.3bn). An extra £98m covers medicines prescribed in hospital and dispensed in the community. We estimate that medicines spending in Scotland, Wales and Northern Ireland totals an additional £3.5bn.
- The volume of medicines is far higher for community pharmacy, but the cost of on-patent originator medicines used in acute settings means that the spend is broadly even.
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We estimate that the English generic and biosimilar market is around £5bn (actual sales, not reimbursement), potentially more with inflation. This comprises:
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Primary care: £2bn of unbranded generic sales.
- Primary care: £1.25–1.5bn of branded generic sales.
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Secondary care: £0.75–1bn of generic sales.
- Largely secondary care: £0.75–1bn of biosimilar sales.
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