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Two major pharmacy bodies have warned the chair of the Lords Public Services Committee which is looking into the causes of medicines shortages that urgent investment is needed in the generic medicines market to bolster the resilience of the UK supply chain. 

In a letter to Baroness Morris, Company Chemists’ Association chief executive Malcolm Harrison and Community Pharmacy England’s director of research and insights James Davies said the recent agreement struck between the Government and US president Donald Trump, which will see the UK pay more for branded medicines through the NHS in exchange for a deal to keep tariffs on UK pharmaceutical exports into the US at zero per cent for the next three years, should not be funded “by further pressure on the generic medicines market”.

As part of the deal, the UK will increase overall NHS spending from 0.3 per cent of GDP to 0.6 per cent of GDP in the next decade. According to the Department for Business and Trade, the UK exported £11.1 billion of medicines to the US, accounting for 17.4 per cent of all goods exports in the 12 months to the end of September 2025.

The letter, which was also signed by Healthcare Distribution Association executive director Martin Sawer and Medicines UK chief executive Mark Samuels, called for a review of Drug Tariff pricing and retained margin, which stands at £900 million, “to reduce the number of medicines supplied to the NHS at a loss”.

They also wanted recognition that branded and generic medicines need “funding models that incentivise participation and competition” and a procurement model that allows the UK supply chain to “operate in a financially sustainable way”.

They warned the decision of global manufacturers to prioritise other markets or withdraw from the UK entirely because of low generic medicine prices continued to impact patients, wholesalers, manufacturers and pharmacies and “caused entirely avoidable medicine shortages”.   

“For years, competitive procurement of medicines for the NHS by community pharmacies has driven the prices of generic medicines down,” they wrote.

“It is estimated that this model has saved the taxpayer billions of pounds. Unfortunately, prices for generic medicines have now hit rock bottom. At present, the reimbursement price for over 850 million generic medicine packs is 99p, or less, for up to a month’s supply. This is simply not sustainable.”