U.K. National Health Service Proposing 10% Cut For Prescription Drug Prices

Main Category: Pharma Industry / Biotech Industry
Article Date: 09 Jan 2008 - 8:00 PDT

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The United Kingdom's National Health Service is negotiating revisions to the U.K. national price list that could cut prescription drug prices by 10%, the Financial Times reports. A five-year, 7% cut was made in 2005 under the last negotiation of the Pharmaceutical Price Regulation Scheme, which was supposed to last until 2010. The larger cut proposed by NHS would save one billion pounds annually and help meet savings goals mandated by the Treasury in 2007. NHS plans to reach an agreement with the industry by June.

According to the Times, the drug industry is concerned that the government is too focused on reducing drug costs and is not taking into account the savings drugs can provide in health and social care costs or what lower prices might do to drug research and development in the U.K.

The pharmaceutical industry might endorse calls to remove off-patent branded drugs from the payment schedule but in return request higher prices for innovative treatments and faster approval for new drugs. Meanwhile, a report from the Office of Fair Trading called for the PPRS to move toward a value-based scheme under which the cost for drugs would be more closely related to the benefits the medication provides. Such a system likely would increase prices for some drugs, but lower the cost of others, according to the Times (Timmins, Financial Times, 1/7).

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