Suggestions that the UK government is looking to push for a 10% cut in the prices of prescription medicines on the National Health Service have raised eyebrows within the pharmaceutical industry.

The Financial Times has this morning reported that Alan Johnson, the UK’s health minister, told the newspaper he plans to generate substantial savings in the £11 billion annual drugs budget during talks with industry representatives concerning the Pharmaceutical Price Regulation Scheme.

This 10% figure will come as a shock to drugmakers especially as they signed a five-year deal in 2004 offering price cuts of around 7% in return for increased allowances to encourage R&D of innovative products.

The Department of Health surprised drugmakers in August by saying that renegotiation of the PPRS was needed, a move which came after the UK’s Office of Fair Trading published its controversial report on the PPRS, which concluded that the NHS could save up to £500 million a year. The August statement prompted a cautious response from the Association of the British Pharmaceutical Industry which said it recognised the Government’s need to gain best value for money from all aspects of NHS services, but pointed out that the system already benefits “from one of the most cost-effective medicines policies in Europe, with high levels of generics prescribed”.

The ABPI told PharmaTimes World News that it is weighing up the comments of Mr Johnson and may make a statement later today.