ABPI Viewpoint: The Price Of Medicines, UK

Main Category: Pharmacy / Pharmacist
Also Included In: Public Health
Article Date: 22 Jul 2009 - 5:00 PST

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According to the Department of Health, for every £1 spent on healthcare in the UK, just 12p goes on medicines. Yet when it comes to debate around NHS finances, it sometimes feels like the price of medicines gets all the attention.

In fact, when you look at how the UK compares to other countries, medicines here are cheaper than elsewhere. The UK is now bottom of the league of 12 comparator countries, behind, for instance, Belgium, Finland and France, and has been sliding down the league table since 2006. (Source: ABPI)

The UK also spends less per head on medicines than many of our European neighbours. In 2008, the UK spent £200 per head on medicines compared to France where they spent £372 (up from £327 in 2007) and in Belgium where they spent £327 (up from £263 in 2007). (Source: IMS, OECD, ONS).

The price of medicines in the UK is controlled by the Department of Health (DH) under a scheme known as the Pharmaceutical Price Regulation Scheme (PPRS), and one of the reasons why medicines in the UK are cheaper than elsewhere is because the DH has demanded sharp cuts in recent years. In January 2005, the NHS medicines bill was reduced by 7 per cent under the PPRS. In January this year, it was cut by another 3.9 per cent.

With each percentage point cut comes a saving to the NHS of roughly £80m a year. To date, those cuts have saved close to £2bn.

In January 2010, prices will come down again by 1.9 per cent, adding a further £152m to the amount being saved every year. Attention is always focused on cost, rather than around a more holistic perspective of the value that medicines bring. Medicines help keep people out of hospital, out of pain, in work, at home with their families and, in the extreme, alive.

Conditions such as asthma, coronary heart disease, epilepsy, diabetes and schizophrenia which used to be a life sentence 15 to 20 years ago are now eminently treatable - all thanks to new medicines. Statins - the new breed of heart drugs which help reduce cholesterol and cut heart disease - alone are estimated to save 10,000 lives a year.

In the UK, we are lucky to have a National Health Service which allows the high price of some medicines, particularly those for rare diseases, to be balanced against the lower cost for the majority of medicines. A key reason for this is the prevalence of generic medicines, cut-price copies of original, breakthrough medicines that are no longer protected under patent laws. In 2007, 82.6 per cent of all medicines - a shade over eight in ten - were prescribed generically in the UK, the highest rate in Europe.

Over the next three years, there will be even more generic copies as seven out of the top 20 branded medicines will go off patent. The ABPI estimates this will save the Department of Health at least £2.9bn by 2012.

Producing generic medicines is cheap but finding the original breakthrough medicines is a risky, costly and painstaking process: investigation into 10,000 compounds is likely to yield just one successful compound; and first discovery through to bringing a new medicine to market takes between 10 and 12 years and costs over £500m.

Just three out of ten medicines available to patients ever recoup the cost of their development, and those that do make money, have to subsidise the others that don't, including those serving small patient populations, rare diseases and paediatric conditions.

Source
ABPI

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