UK govt and Pharma reach deal on PPRS, but with 5% NHS drug price cuts

After more than three months of hectic negotiations, the UK government and the drug industry, through its trade body the Association of the British Pharmaceutical Industry, have reached agreement on a revision of the Pharmaceutical Price Regulation Scheme which the parties believe "strikes a reasonable balance."

It does, however, call for a significant 5% price cut for drugs to be made available on the National Health Service, and possibly more, on top of the 7% reduction agreed under the 2005 PPRS deal. Although clearly unlikely to be welcomed by UK-based drugmakers, this seems to be a better deal than the 10% cut observers thought might be expected, after Health Secretary Alan Johnson said that the government is planning to cut the NHS prescription drug budget by a tenth from a then level of about L11.0 billion ($21.6 billion; Marketletter January 14).