Government and pharma reach PPRS deal
pharmafile | November 19, 2008 | News story | Sales and Marketing |Â Â ABPI, parÂ
The UK government has agreed a new flexible pricing deal with the industry, in which companies can raise the price of medicines showing greater value.
The deal replaces the agreement outlined in June, and after months of tension both sides say they are happy with the final arrangement.
The Department of Health said: “The flexible pricing scheme agreed will ensure that medicines fairly reflect their value to patients, branded drugs will see their price cut, and industry innovations will be encouraged and rewarded.”
The non-contractual, voluntary scheme aims to provide stability and predictability in pharmaceutical pricing for the next 5 years.
The deal is effective from February 2009 when the cost of branded drugs will be cut by 3.9%, with a further 1.9% cut in 2010. Companies will set their own prices for products, but – crucially – these may be raised later once clinical effectiveness or value is proven.
In a bid to maximise NHS savings, the government will also allow pharmacists to switch a branded drug to a generic cheaper version, unless specified otherwise by a doctor.
Risk-sharing arrangements, whereby a company might refund the cost of a new drug to the NHS if a patient fails to respond to it, or offer the first cycle of treatment free, will also become more ‘systematic’.
This move was hinted at two weeks ago alongside the government’s introduction of NHS top-ups, as part of its package of measures to increase access to new medicines.
Alan Johnson, secretary of state for health, said a more flexible approach to pricing was “in everyone’s interests”.
He added: “It gets clinically and cost effective drugs to more patients – providing cheaper options where clinically appropriate – delivers value for money for the NHS and the tax payer, and creates a better market for the pharmaceutical industry while supporting research and innovation.”
Overall the deal seems to please industry members.
Dr Richard Barker, director general of the ABPI, said the agreement was a “landmark”, adding: “For the first time, the PPRS is much more than a simple economic agreement that looks at price alone.
“It is an all-encompassing package that encourages the discovery of new, more effective medicines, while at the same time allowing NHS patients to access these treatments more quickly.”
The ABPI said this was the final agreement and no more revisions would be made, to ensure stability for the industry.
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