The Pharmaceutical Journal
Vol 279 No 7464 p143
11 August 2007

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News summary

PPRS overhaul to focus on value to patients and NHS

Renegotiation of the pharmaceutical price regulation scheme (PPRS) will focus on delivering value to the NHS, to patients and to the taxpayer, the Government has said.

Publishing its interim response to the Office of Fair Trading’s market study on the current PPRS (PJ, 24 February, p208), the Government announced its intention to overhaul the scheme. Four aims will guide the renegotiation: delivering value for money; rewarding and encouraging innovation; assisting the uptake of new medicines; and providing stability, sustainability and predictability.

Stephen Timms, minister for competition, said: “We are undertaking a continuing programme of detailed analysis of the OFT report’s proposals, and will discuss this analysis with the industry, taking into account their strong concerns about a number of the proposals. … We will take this work forward over the coming months and will discuss proposals with industry. We will then aim to make further proposals as part of the renegotiation of the PPRS.”

Sue Sharpe, chief executive of the Pharmaceutical Services Negotiating Committee, said that in recent years the activities of certain manufacturers had given rise to a range of problems for pharmacy contractors relating to the terms on which they procure medicines for NHS patients. “A particular concern for pharmacy contractors has been primary care trusts encouraging the prescribing of branded generic medicines, a practice which leads to unequal geographical distribution of core pharmacy funding,” she said.

“The OFT shared PSNC’s view that this practice also increases costs for the NHS. Systems for regulating brands should not be used to distort the generics marketplace and we believe strongly that changes should be made to the reimbursement arrangements for both branded generics and off-patent brands as part of the reform of the PPRS arrangements.”

A Department of Health spokesman said that, although the Government recognised the benefits that PPRS agreements have brought to the UK over the past 50 years, ministers believe it is important to update the system so it is fit for purpose and contributes to achieving greater efficiency in NHS expenditure. He added that any new agreement would recognise the contribution of the pharmaceutical industry to the UK economy through the provision of health care and the development of medical advances.

“It is in all our interests to encourage research and reward innovation, but above all we want to ensure that the taxpayer gets value for money and patients continue to benefit from innovative products at a reasonable price,” he said.

In its interim response, the Government outlines the changes in the pharmaceutical industry and the delivery of health care that have led to its decision to initiate renegotiation of the PPRS. Blockbuster drugs are now rare, it says, and innovation is increasingly focused on ever-smaller patient populations. “This creates major challenges in ensuring affordable delivery of these benefits to patients,” it argues.

In a statement, the Association of the British Pharmaceutical Industry said it recognises the Government’s need to gain best value for money from medicines and welcomes the assurance from the Government that any new agreement would acknowledge the contribution of the pharmaceutical industry to the UK economy.

“The ABPI believes that a stable, voluntary agreement is crucial to retain the industry’s major R&D investments,” it added.