Health Policy

28.11.18

New voluntary drug pricing deal could cut NHS medicine bill by almost £1bn

A new voluntary scheme to control the pricing of branded medicines could provide patients with earlier access to new medicines and save the NHS almost a £1bn on its annual medicine bill.

It will introduce an annual 2% cap on the growth of branded medicine sales to the health service with companies repaying the NHS for spending above this limit, and is expected to deliver savings of around £930m.

The ‘Voluntary Scheme for Branded Medicines Pricing and Access’ was agreed by the government, NHS England and the Association of the British Pharmaceutical Industry (ABPI) and is expected to come into effect in January 2019.

The old Pharmaceutical Price Regulation Scheme (PPRS) agreed between the government and industry is due to expire on 31 December this year, leading to negotiations between the three sides to agree new terms.

Developed in partnership with the pharmaceutical industry, the five-year scheme is designed to support innovation and manage spending on medicines.

The details of the deal are still being finalised, but will include an NHS commitment to improve the uptake and use of medicines across five key disease areas.

Matt Hancock said the scheme will be “good for patients will be good for patients, good for the NHS and good for the UK life sciences industry.”

He added: “Cutting-edge and best value medicines will be fast-tracked and we will cut our medicines bill by £930m next year following tough but constructive negotiations with the pharmaceutical industry – money we can redeploy into better NHS services, alongside the NHS long-term plan.”

The health secretary argued that the deal will also ensure the UK “remains an attractive hub for research and investment so the next generation of ground-breaking treatments can be developed here with patients benefitting earlier.”

The ABPI said in a statement that a “major milestone” had been reached, and that it would provide a “more flexible and streamlined commercial process” which would make the UK more attractive to investors.

Companies that choose not to join the voluntary pricing scheme will instead be enrolled in the statutory scheme, which operates alongside the voluntary one to control the cost of branded NHS medicines.

Health minister Lord O’Shaughnessy called the deal a “vote of confidence for our world-leading life sciences sector” and claimed it would be particularly helpful for small and medium-sized businesses by allowing greater commercial flexibility.

Image credit - Julien Behal/PA Wire/PA Images

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