EU & Competition news

The Department of Health has announced that the government and the pharmaceutical industry have agreed a significant deal on parts of the new Pharmaceutical Price Regulation Scheme (PPRS). According to the Department, the package agreed strikes a reasonable balance between public and private interests.

The agreement pledges to support uptake of new medicines and ensure that patients, as well as industry, benefit from access to innovative treatments. The Department also stated that the agreement will also deliver stability and predictability for the industry and achieve better value for money for the taxpayer.

The agreement includes a saving of 5% in the cost of drugs sold to the NHS with a further price reduction of 2% available if growth in the drugs bill exceeds an agreed threshold. The 5% savings will be made up of a base price cut for all branded medicines of 2%, combined with measures to reduce the price of out of patent drugs (where a generic equivalent exists) and a further variable price cut to deliver 5% overall. In addition, support is to be given to innovations in practice to give patients faster access to new medicines that are clinically and cost-effective. A non-contractual voluntary scheme is also to be introduced that will provide stability and predictability in Pharmaceutical Pricing for the next 5 years.

Further negotiations are to continue on issues including making sure that access to medicines reflects their value to patients, before the new scheme can be finalised and implemented.

The Department of Health has also launched a consultation on statutory proposals to control the price of branded medicines with effect from 1 September 2008. The proposals are to apply to any companies choosing not to sign up to the PPRS, or in the event that one is not reached.

This material first published by the LexisNexis Butterworths. All rights reserved.