Proposed changes to the pharmaceutical price regulation scheme (PPRS) could damage the NHS as well as the pharmaceutical industry, leading health economists have warned.

An analysis of changes proposed by the Office of Fair Trading (OFT) in this week's British Medical Journal (February 2), said that if the terms of the new PPRS were poorly described it: “could reduce rather than improve health and undermine the evidence base for future NHS practice.”

The new value-based drug pricing scheme was recommended by the OFT in February last year to replace the system used for the past 50 years. The new system would create a body similar to NICE to oversee drugs' clinical worth and recommend a price to the NHS based on that value.

The authors, led by Professor Karl Claxton, professor of economics at the Centre for Health Economics at the University of York, are concerned that such cost-effectiveness decisions need to be “transparent and based on independent scientific analysis” and by a body that was prepared to reject approaches from the pharmaceutical industry.

The team of academics from the UK and Canada are also worried that under the new system approval for new drugs could hamper further research to support the drug's use. They suggest that any price set for an approved drug should take into account the value of the evidence that may be forgone for future NHS patients.

Criticisms quoshed
But the authors dispelled some of the intial criticisms of the scheme. They said the belief that drug companies might relocate out of the UK following the introduction of the scheme was incorrect. They wrote: “It is, however, a myth that the current pharmaceutical price regulation scheme incentivises inward investment. In fact the scheme legally cannot distinguish between companies with research located in the UK and those elsewhere.”

“It is difficult to imagine a situation in which the local market would directly influence this choice because products developed in one location can be produced and marketed worldwide.”

The researchers also allayed fears that companies creating “me too” drugs would be penalised by the new scheme, saying: “manufacturers could charge the same price as the incumbent - if they are equivalent - and have the same NICE guidance, or command a higher price if they can demonstrate additional health benefits.”

The NHS currently spends about £8 billion a year on branded prescription medicines.

By Rob Finch