The spiralling cost of unbranded medicines is putting severe strain on the budgets of primary care groups.
Giving evidence to the health select committee hearing, which was triggered by an HSJ story six weeks ago, Shropshire health authority chief executive Colin Hayton said local PCGs were expecting to overspend their drug budget by£1.5m.
He said the overspend, on a primary care drug budget of£42m, would occur despite a 7 per cent uplift designed to take account of increased prescribing costs and would 'severely reduce the scope for PCG developments next year'.
Health minister John Denham said the problem was 'likely to cost the NHS in the order of£160m', although he claimed this would be offset by a£60m reduction in the cost of branded drugs next year negotiated by the government.
He told the committee£160m was '0.5 per cent of the whole allocation for the NHS' and that it should be 'within the ability of local health economies to manage'.
PCGs would only run into problems if 'unrealistic' assumptions had been made about prescribing costs, he insisted.
Meanwhile, Nick Scholte, chief executive of the Prescription Pricing Authority, told MPs it had been forced to take on more than 200 additional staff to cope with an increase in the number of category D prescriptions.
The PPA is looking to recruit more staff, since it is now running 42 days late in processing prescriptions, leading to delays in supplying data to the NHS and monitoring.
Mr Scholte said the situation would cost the PPA£3.3m a year until the position was recovered, 'which is contingent on policy decisions taken elsewhere.'