OFT to investigate national drug price controls scheme
An investigation into the operation of the Pharmaceutical Price Regulation Scheme has been launched by the Office of Fair Trading.
The OFT wants to find out whether the scheme is an effective way of meeting
its stated aims, which are:
· To secure safe and effective medicines
for
the NHS at reasonable prices
· To promote a strong, profitable pharmaceutical
industry
· To encourage competition
The study has been announced in the wake of an earlier OFT investigation
into the impact of public procurement on competition, which noted concerns
that the power of multinational companies was not effectively balanced
by public sector buying power. It is expected to last at least until the
spring of next year and may continue to the end of the year, depending
on the findings.
John Vickers, OFT chairman, said:“Health care and the interaction
between government and markets are two of the OFT’s priority areas.
Both are at the heart of this study.We want to examine whether the PPRS
works well to ensure that pharmaceuticals markets meet the needs of patients
by offering adequate rewards to pharmaceutical companies for developing
new and useful drugs, while providing the taxpayer with value for money.”
The PPRS is negotiated between the Government and the Association of the
British Pharmaceutical Industry. It places limits on the total profit
that individual companies can make from their dealings with the NHS. Profits
are not guaranteed and companies that exceed their limit have to repay
the excess to the Government.
Richard Barker, ABPI director general, said: “The PPRS is conducted
in a transparent way, with annual progress reports to Parliament and full
details of how it operates made public.” He added that the ABPI
would co-operate fully with the investigation.
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