E-cigarette ‘rip-off’ that could cost the nhs

E-cigarette ‘rip-off’ that could cost the NHS dear: Cartridges costing just 4p to make are being sold for £1.50 each

  • Refill cartridges for e-cigarettes are sold for 37 times their original cost
  • Campaigners warn that NHS could pay over the odds for proposed contract to supply smokers with tobacco-free alternative

Firms making e-cigarettes could be ripping off customers – with research showing refill cartridges are being sold for around £1.50, despite costing only about 4p to produce.

This means customers are paying roughly 37 times the cost price, when typically consumers pay around eight times the cost of manufacturing a product.

Now campaigners have raised concerns that the mark-up means taxpayers could lose out if the NHS finalises a deal thought to be under discussion for British American Tobacco to supply prescription e-cigarettes.

Overpriced: E-cigarettes are being sold at a mark-up of 37 times their manufacturing cost

Overpriced: E-cigarettes are being sold at a mark-up of 37 times their manufacturing cost

Jonathan Isaby, chief executive of the TaxPayers’ Alliance, said: ‘The NHS has a terrible record of negotiating a good price, despite its scale as a buyer.

‘It would be important to remind those involved in the negotiation that in times like these there is absolutely no scope for the NHS to tie itself to a contract which delivers anything but the best value.’

E-cigarette cartridges contain around 1.5ml of liquid and need replacing every few days at the cost of around £1.50 each.

Using materials available on the internet, it is possible to make enough liquid to fill a cartridge for around 4p – but wholesale prices mean they are likely to cost even less for major firms to make.

Contract: The NHS is thought to be close to signing a deal to supply subscription e-cigarettes

Contract: The NHS is thought to be close to signing a deal to supply subscription e-cigarettes

However Simon Jordan, who owns e-cigarette subscription service Rokfri, claimed many firms simply price products so they are cheaper than cigarettes – which carry duty of at least 16.5 per cent plus VAT – rather than in proportion to what they actually cost to produce.

Yesterday Dr Tim Ballard of the Royal College of GPs said: ‘It is unclear if making e-cigarettes available on prescription is cost-effective for the NHS.’ The Tobacco Manufacturers’ Association declined to comment.

A Department of Health spokesperson said: ‘As there are currently no licensed e-cigarettes on the market, any concerns are based on pure speculation.

‘In any case the NHS has put strict systems in place to make sure we get the best value for money.’

BAT declined to comment.

Read more: http://www.dailymail.co.uk/news/article-3466652/E-cigarette-rip-cost-NHS-dear-Cartridges-costing-just-4p-make-sold-1-50-each.html#ixzz41KmgbjY2
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