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New five-year pricing deal on NHS branded medicines agreed

Costs of these drugs to NHS will be flat-lined for two years from Jan 1st

Caroline White

Wednesday, 04 December 2013

Pharma’s representative and negotiating body, the Association of the British Pharmaceutical Industry (ABPI), has hammered out the final details of a deal with the government on the costs to the NHS of prescription meds.

Under the new voluntary Pharmaceutical Price Regulatory Scheme, for which the Heads of Agreement were announced on November 6, industry has pledged to keep NHS expenditure on branded medicines flat for two years, after which prices will rise slowly.

Pharma companies have also agreed to underwrite the NHS spend on branded medicines if it exceeds the allowed growth rate and make payments to the Department of Health.

The five year scheme, which is the result of lengthy and complex negotiations, will come into force on 1 January 2014.

“With this five-year agreement [we have] agreed to play our part, in light of the financial challenges facing the NHS,” commented ABPI Chief Executive, Stephen Whitehead.

But he said that it was up to the government to create an environment that would encourage the industry to grow.

“Therefore we are disappointed that the government has chosen not to maintain a taper for companies with NHS sales between £5 and £25 million,” he said.

“We now need the government and the NHS to respond positively to this unique opportunity to demonstrate their active commitment to improving patients’ access to the latest innovative medicines,” he emphasised.

He described the negotiations as “the most complex we have ever had with government.”

He added: “It should not be underestimated how difficult this will be for the industry. The commercial environment in the UK has an impact on its attractiveness for research and development investment and it’s too early to say what impact this settlement will have on industry investment.”

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