The rapid increase in generic prices in the UK: A failure of competition or regulation?

There have been steep rises in the price of some generic drugs since Septem ber 1998. These rises have been the subject of an inquiry by the House of C ommons Select Committee on Health. This article comments on the pricing of generic drugs and suggests possible solutions to the recent price rises. A fall in the price of generics in the five years prior to September 1998 was a result of regulatory action, rather than strong price competition. Howev er this regulatory system has now been shown not to have the incentives to encourage suppliers to meet the Government's objective of cheaper generic d rugs. This raises the question of whether cost control strategies for prima ry care prescribing based on the greater use of generics are reasonable.