Industry warns of worrying signs from NHS drugs bill
pharmafile | April 13, 2006 | News story | |Â Â Â
NHS spending on medicines has fallen in relation to its overall budget – just one of the many causes of concern for the UK pharmaceutical sector, the ABPI has warned.
The industry body has highlighted a number of statistics it says are 'worrying signs' that the country's pharma sector is being undermined.
It says prices of medicines are more than 21% lower in real terms than they were 10 years ago, while the percentage of the budget that the NHS spends on medicines has dropped to 11%.
The figures have been released as part of the ABPI's annual review and show that the UK spends less on medicines than most other European countries, with the annual cost of prescriptions written by British doctors averaging 205 pounds per person.
This is despite the fact that the number of NHS prescriptions dispensed increased by 37 million last year to 826 million in total.
Meanwhile, the ABPI says balance of trade in pharmaceuticals is also in decline. Last year the pharma balance of trade was the highest of any sector in British industry, but fell 8% on the previous year, when the figure stood at 3,712 million pounds.
"Our latest statistics show that there are some worrying signs over the health of the pharmaceutical industry in the UK," said Dr. Richard Barker, Director General of the ABPI.
"We are providing medicines at lower, relative cost than 10 years ago; they are a smaller percentage of NHS spend than for many years; and other European countries, by and large, spend more on medicines than we do. The public and politicians need to recognise the NHS is getting excellent value for money invested in UK medicines. However, we have serious concerns over the research and manufacturing base in the country, and our balance of trade – while still the envy of many other industries – is now showing a decrease."
At the end of his two-year presidency the outgoing ABPI President, Vincent Lawton warned that the government had to make sure medicines prices provide pharma companies with an incentive to maintain their investment in the country.
"In a competitive global industry, the UK must remain an attractive and viable place for pharmaceutical companies to invest."
He said 40% of new medicines introduced in the past ten years support the government focus priority areas of cancer, coronary heart disease, mental health and diseases of the elderly.
He argued the industry's medicines were contributing to the health of the nation and the productivity of the NHS by reducing need for costly hospital stays and stated: "As the average prescription costs less than 11 pounds, and a day in hospital costs around 200 pounds, [medicines] are helping save taxpayers money while enabling patients to stay at home longer."
The ABPI's Annual Review says international competition to attract pharma investment has grown ever fiercer with more and more countries developing the technical infrastructure needed to take on this work.
It predicts the UK pharmaceutical manufacturing base is likely to decline as older medicines lose their patent status and manufacturing is moved overseas, threatening the positive balance of trade.
ABPI Director General Richard Barker also warned that the Office of Fair Trading's investigation into the current pricing system the PPRS also threatened the success of the UK industry.
"Although no pricing scheme is perfect, the PPRS provides a more stable environment than any other in the EU."
Pharmaceutical companies carry out around a quarter of all business research and development in the UK, and a third of their UK sales are reinvested in UK R&D, making it one of the country's greatest hi-tech success stories.
Pharma's investment directly employs 73,000 people and indirectly creates employment for a further 250,000 people. It has also resulted in the UK being responsible for around one in five of the world's top 100 medicines – more than any country except the USA, and as many as the rest of Europe combined.
