The Department of Health has informed UK drugmakers that the current pricing deal that sets the cost of prescription drugs to the National Health Service is being scrapped at the end of the summer.

The DH sent out letters to 180 active members of the Pharmaceutical Price Regulation Scheme serving a six-month notice period after which the current version will come to an end, and the industry and government are now working towards a new deal that will go live as of September 1, a spokesman for the Association of the British Pharmaceutical Industry confirmed to PharmaTimes UK News.

Last August, the DH shocked drugmakers by announcing a renegotiation of the PPRS, “to ensure that the taxpayer gets value for money and patients continue to benefit from innovative products at a reasonable price”, even though the current five-year agreement had only been in place for half its term and included a 7% price cut.

The move was prompted by an Office of Fair Trading report, which recommended reforming the PPRS to a value-based system to help deliver greater benefit to patients. Furthermore, it claimed that the NHS could save up to £500 million a year by choosing the cheapest alternative on a range of popular medicines.

Rewarding innovation
At the time, Competitiveness Minister Stephen Timms said: "It is time to develop a pricing system which is fit for purpose for the 21st century [as] we must ensure that any future pricing scheme delivers value, rewards innovation and ensures a fair deal”, while the Health Ministry promised that any new agreement would “recognise the contribution of the pharmaceutical industry to the UK economy through the provision of healthcare and the development of medical advances”, and stressed the importance of encouraging research and rewarding innovation.

But just last week, Nigel Brooksby, managing director of Sanofi-Aventis UK, told delegates attending The Economist’s annual pharmaceutical conference in London that the uncertainty surrounding the future of the PPRS has created a “black cloud” which is hanging over the UK in terms of investment prospects, and industry leaders warned that international drugmakers are putting decisions on whether to invest in the UK on hold while the scheme is being renegotiated.