The UK Government says that the new five-year, multi-billion pricing deal agreed with drugmakers will introduce a fixed limit on NHS spend on branded medicines for the first time ever "with all additional expenditure above this level paid for by industry".
Commenting on the latest version of the Pharmaceutical Price Regulation Scheme (PPRS), the Department of Health says "the breakthrough deal will allow the NHS to increase the availability and use of the best branded medicines and most innovative treatments without risking a spiralling bill for the taxpayer". It also claims that "pharmaceutical companies will benefit from greater certainty on how much will be spent each year and increased use of new and recently developed medicines".
The previous agreement generated savings through an agreed price cut on branded medicines sold to the NHS but with no upper limit on overall cost, the government notes. It adds that the demand for medicines has grown steadily in the UK "and so the new arrangements will allow the NHS to make better use of its precious resources".
Specifically, NHS spending on branded drugs – more than £12 billion in 2011/12 – will remain flat for two years, followed by small increases of less than 2% in the following three years. This marks "a significant saving for the taxpayer when compared to an average growth of 5% in previous years".
Jeremy Hunt, Health Secretary (pictured) said that the agreement ensures NHS patients "will receive the best and most advanced medicines in the world while managing the cost". He added that "UK pharmaceutical companies have responded to the challenges we face as a country, both in terms of the increased demand for medicines and pressure on public spending. I hope in return we have given them the certainty and backing they need to flourish as a sector both here and in the global market".
The DoH argues that the deal "will strengthen Britain’s life science sector and its ability to compete globally", a view not shared by Pfizer (see link below). The new arrangements will be introduced from January 1.