UK govt delays new PPRS cuts to February 2009; OFT "value-pricing" included in deal

A compromise arrangement has been reached between the UK government and the Association of the British Pharmaceutical Industry to delay price cuts from the newly-negotiated Pharmaceutical Price Regulation Scheme by one month. The Department of Health, in a statement, said the deal "means that more patients will benefit from a wider range of innovative drug treatments at a fair price to the National Health Service." Its objective is to cut the NHS' annual drug bill of about L11.0 billion ($16.50 billion).

The new scheme will result in price cuts for branded drugs but industry innovation "will be encouraged and rewarded," the DoH claimed. Part of the reason for the delay, welcomed as "pragmatic" by an ABPI spokesman, was concern over pharmacy stocks in the Christmas and New Year holiday period (see page 12). The announcement is a public vindication of the Office of Fair Trading's recommendation that "value should be better reflected through the PPRS," a key element of the government regulator's 2007 report into drug pricing (Marketletters passim).

Cuts now, price rises later?