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October 13, 2024
Health ministers are seeking to slash the NHS medicines bill by imposing a discount of up to a fifth on prescription drug prices from the start of next year.
In an aggressive opening shot for negotiations with the pharmaceutical industry, the Department of Health laid out the discounts of 20 per cent for drugs in the statutory pharmaceutical pricing scheme, the legal framework for determining pricing, in a consultation paper released on Thursday. The NHS currently spends £13bn a year on medicines.
While the majority of the UK’s patented drugs are priced under a voluntary system which may yet agree more generous terms, the outline of the planned statutory scheme sets a tough discount for any companies that refuse to negotiate.
The move comes at a time of growing international budgetary pressures and as health ministers battle to safeguard the NHS allocation in next week’s spending round.
Vince Cable, business secretary, Philip Hammond, defence secretary, and Eric Pickles, local government secretary, are all seeking to have parts of their own budgets redefined as health spending in order to ease the pressure on their departments, which are facing deep cuts.
Lord Howe, the health minister, said: “We cannot simply spend more and more on drugs – this would mean spending less and less elsewhere. A drug that brings a lot of extra benefits may justify the NHS paying more, but equally the NHS might pay less for a drug that does not deliver wider benefits.”
The industry is bracing for a fresh round of slow moving talks around the next five-year voluntary pharmaceutical price regulation scheme set to come into force in 2014 and likely to incorporate a broader “value based pricing” assessment taking into account indirect benefits of medicines to carers and families as well as patients.
The Association of the British Pharmaceutical Industry, the trade body, said: “The medicines used in the UK by the NHS already provide good value for money. The price of our medicines are among the lowest in Europe . . . Compared with our European counterparts, we continue to struggle at getting the latest and most innovative medicines to patients.”
The public release of the consultation document follows a meeting between ministers and senior pharmaceutical executives on Wednesday, after which one industry participant said: “We are perplexed and confused by the inconsistent messages.”
The consultation offers the first public detail for many months on a new pricing regime set to begin in just half a year’s time in January 2014.
The National Institute for Health and Care Excellence (Nice), the NHS medicines advisory body, will in future consider elements of “value-based pricing” championed by Andrew Lansley, the former health minister.
Source The Financial Times