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Millions shaved off NHS drugs bill

20 November, 2008  

A deal that will shave hundreds of millions of pounds off the NHS drugs bill has been agreed between the pharmaceutical industry and the Department of Health.

Drug companies will supply the NHS at lower initial prices, with the option of increasing charges if treatment proves to be of benefit to patients.

The move follows a demand by the Office of Fair Trading (OFT) last year that the value of drugs must adhere more closely to the Pharmaceutical Price Regulation Scheme (PPRS).

The OFT had identified a number of drugs where prices were “significantly out of line with patient benefits”.

The new scheme will save £350m in 2009/10 and £550m every year thereafter. In 2006/07, £10.6 billion – 12.7% of the total NHS budget – was spent on drugs.

The scheme will ensure that more drugs become available on the NHS, and that more patients will benefit from a wider range of innovative medicines. The cost of branded drugs will also be cut.

The agreement also allows for more schemes to give patients access to drugs that have yet to be approved by the National Institute for Health and Clinical Excellence.

Dr Richard Barker, director general of the Association of the British Pharmaceutical Industry (ABPI), said: “This landmark deal marks a turning point for patients, the NHS and the pharmaceutical industry.

“For the first time, the PPRS is much more than a simple economic agreement that looks at price alone.

“It is an all-encompassing package that encourages the discovery of new, more effective medicines, while at the same time allowing NHS patients to access these treatments more quickly.

Copyright Press Association 2008

Department of Health