Jeremy Hunt has asked the competition watchdog which overlooks the health service to investigate claims that drug companies are exploiting NHS purchasers by inflating drug prices.
The Competition and Markets Authority (CMA) has been contacted by Hunt with a view to examining the way that drugs are procured in the health service.
This decision follows a prominent report involving the vast inflation of drug drug prices exploiting a loophole in NHS purchasing rules.
A spokesman for the Department of Health asserted that the allegations which have been printed in The Times and Daily Mail – and indeed this publication – are extremely serious, and warrant assiduous investigation.
“These are serious allegations and no pharmaceutical company should be exploiting the NHS. The secretary of state has asked the CMA to urgently look at the evidence uncovered by the Times as part of their continuing investigations into excessive drugs pricing.”
An investigation conducted by The Times suggests that suppliers are able to ensure that extortionate price rises are attached to certain drugs by dropping brand name associated with them.
This effectively takes medicines outside of typical NHS profit controls.
However, some healthcare observers have suggested that the process of acquisition in the NH could be improved significantly.
Experts suggest that rather than simply accepting drug price rises, procurement in the NHS should be focused on making more intelligent decisions about the purchasing of medicine.
Nonetheless, it is alleged that wholesalers and their customers can receive a cut of such price hikes, and that the prices of 32 drugs have risen by more than 1,000% in the past five years.
Responding to these reports, the CMA has the power to impose stringent financial penalties on any company found to have charged excessive prices for drugs.
And the Department of Health has the potential to recover any financial losses through the court system.
The health department has already indicated that the CMA has been tasked with conducting five investigations related to suspected anti-competitive practices, in both the pharmaceutical and healthcare sectors.
No details are available on the investigations at this time, but it is expected that this could be just the beginning of a wider process.
Considering the fragile position of the NHS, this issue is seen as being of critical importance.
NHS trusts have already been tasked with making efficiency savings of £22 billion by the end of the decade, and yet such a slack approach to the purchasing of medicine can obviously have a significant impact on NHS finances.