The Association of the British Pharmaceutical Industry says that price increases for branded medicines sold to the National Health Service are "even less likely to occur than in the past" under the new Pharmaceutical Price Regulation Scheme agreed between the ABPI and the Department of Health this year.
In a new guide to the workings of the PPRS, published on December 9, the ABPI notes that the 1999 scheme imposed an immediate cut in the price of medicines, averaging 4.5 per cent, and that no price increases are allowed until January, 2001. It adds that although there is mounting evidence that competition is effective in controlling prices, changes to the thresholds for price increases mean such increases are unlikely.
A company's profit level has to fall to below 8.5 per cent of the limit allowed by its return on capital employed before it can ask the Department for price increases.
Understanding the PPRS: the control of NHS medicine prices and costs. ABPI Publications Department, 12 Whitehall, London SW1A 2DY (tel 020 7930 3477). Price £15.