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Hospital Loss-Lead Prescribing: Reality Or Myth?


Many people believe that hospital prescribing 'drives' prescribing in primary care. One driver is that the GP repeats the hospital prescription as reflecting best opinion, the so-called "halo effect"; the other is financial. Hospitals are thought to buy expensive drugs cheaply and force up community prescribing budgets, so-called "loss leaders". What is the reality?

Shopping basket: top 100 drugs by cost

PACT level 3 data for the Oxford Region (4th quarter 1993) was manually trawled to identify the top 100 drugs by total expenditure for the region. These drugs were then costed to provide the community cost, first by drug tariff and then by wholesaler price list for items not in the tariff. The true hospital price was then determined (cost plus VAT) from contract files, or pharmacy computer database. Total basket cost was obtained from cost of similar packs (ie comparing like with like).
The cost to the community pharmacist of this 'basket' of 100 drugs was £1665; the cost to the hospital pharmacist was £1553. The difference was 7%.
The actual value of the 100 drugs was £5,579,866, which is 55% of the total expenditure for this quarter. When the differences were broken down the following categories were identified:

This means, for example, that 14 drugs cost the hospital between 50 and 75% of the FHSA price, and accounted for 12% of the FHSA drugs bill.
The five drugs which were 75% or more cheaper in hospital than in the community (i.e. potential loss leaders) were diclofenac 25 mg tablets (ranked no. 3), co-amilofruse tablets (13), azathioprine 50 mg tablets (58), co-amilozide tablets (71) and fenbufen 300 mg tabs (73).
Among the top 100 drugs prescribed by GPs there are very few drugs which are purchased cheaply by hospital and used to treat large numbers of patients. Apart from co-amilofruse, now discontinued in Oxfordshire hospitals, and possibly ranitidine, there is insufficient evidence to lay the blame for high GP prescribing costs on hospital loss-lead prescribing.

Philip Wiffen & Dennis Lauder

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