The Department of Health has announced a new consultation on the UK’s statutory scheme for companies selling branded medicines outside of the Pharmaceutical Price Regulation Scheme.

Any company in the UK which has opted out of the voluntary PPRS is automatically subject to the statutory scheme, which currently imposes a list price cut of 15% on products, to further safeguard the financial position of the National Health Service.

The DH is now consulting on a number of options for the scheme, and seems to be gunning for a new approach under which companies would make percentage payments on sales rather than price cuts, to bring it more in line with the PPRS.

It says consultation on further reform of the scheme is necessary because it in its current form it produces lower savings than the PPRS does and this gap is expected to widen.

“We need to re-align the statutory scheme savings with the PPRS in order to promote a more level playing field between companies in the two schemes and in order to encourage companies to remain in the PPRS to deliver its agreed objectives of stability and predictability to the government and the pharmaceutical industry,” the DH notes.

Negative signals

But the Association of the British Pharmaceutical Industry says is it concerned that the move “sends out further negative signals globally about the UK's willingness to pay for new and innovative medicines for patients”.

“Moreover, given that the last consultation on this scheme took place less than one year ago, we are concerned that further changes to the scheme may create uncertainty in the UK pharmaceutical market,” noted David Watson, the ABPI’s Director of Pricing and Reimbursement. 

In 2014 the statutory scheme covered around 6% of branded medicines sales in the UK, equating to around £710 million, while the PPRS covers around 75% of branded medicines sales, worth around £8.3 billion.