A major part of the new Pharmaceutical Price Regulation Scheme (PPRS) which is due to take effect on January 1 will now delayed by at least three months, following the decision by the Department of Health that a public consultation is required.

The Department is calling for a consultation on how the Scheme’s loss of exclusivity (LOE) provisions linking the prices of patent-expired branded medicines to those of any equivalent generics – where these exist – will apply to individual products. The consultation detailing the impact on these products will be published at the same time as the new PPRS and, in the meantime, manufacturers will not now be required to reduce the prices of post-LOE branded products for which generic alternatives exist, on January 1.

The LOE provisions are part of the “heads of agreement” for the new PPRS agreed by the Department and the Association of the British Pharmaceutical Industry (ABPI) back in June, and observers have expressed surprise that the Department should decide on a public consultation now, “at the eleventh hour,” as one industry source put it to Pharma Times.

However Peter Martin, chief operating officer of Norgine - the specialty pharma company which resigned from the ABPI this month - said he was “pleased that these ill-conceived proposals have been delayed for proper consultation. I believe they create a policy which is contrary to the interests of the ABPI’s members.” Norgine had accused the ABPI of adopting, during the PPRS talks, “negotiating positions which favour the business interests of a limited number of global multinationals, to the detriment of other parts of its membership and the UK healthcare system."

Contacted by Pharma Times this morning, the Department said it was aware that “particular concerns” had been raised about the impact of the provisions relating to out-of-patent medicines if they were implemented around the Christmas period. ”The DH and the ABPI have notified PPRS members that those particular provisions will be delayed by at least three months and will not apply from January 1st as originally planned. PPRS negotiations between the government and ABPI are ongoing and it would not be appropriate to comment further at this stage,” the Department added.

Further concerns for industry

Meantime, industry insiders are also seriously concerned about another element of the outline PPRS agreed in June. The deal calls for a 5% reduction in the prices of drugs from January 1, with provisions for a further, one-off reduction of 2% in 2010 or 2011 if the National Health Service (NHS) drugs bill should grow faster than 6.7% in either 2008 or 2009. However, Pharma Times has been told that the Department says it is lacking the data set to be able to measure this 2% “safety valve” and, while it has made assurances that it will be able to resolve this issue in good time, there are concerns that if this is not the case, there could be further delays in the new Scheme’s full implementation.

The ABPI and the Department are fully committed to implementing the new agreement in time, the industry association told Pharma Times.