Branded medicines pricing

Closed 4 Dec 2015

Opened 10 Sep 2015

Overview

The Department of Health is consulting on proposals to strengthen the arrangements for controlling the cost of branded medicines to the health service. The aim is to keep the Statutory Pricing Scheme in broad alignment with the voluntary  Pharmaceutical Price Regulation Scheme 2014  to allow the whole of the branded medicines pricing system to operate in a fair and consistent way.This will ensure that patients continue to have access to the best drugs while containing cost-pressures on the NHS and providing clarity to drug developers

We are consulting on the following options, in order to ensure that the cost of branded medicines to the NHS stays within affordable limits:

Option 1:      A further cut in the maximum price of branded medicines already on sale to the NHS on 1st December 2013.

Option 1a:    As Option 1, plus a cut in the maximum price on 1st September 2015 of branded medicines introduced for sale to the NHS after 1st December 2013.

Option 2:     Replace the current 15% price cut with a payment by companies against sales of branded medicines already on sale to the NHS on 1st December 2013.

Option 2a:    As Option 2, plus a payment by companies against sales of branded medicines introduced for sale to the NHS after 1st December 2013.

The Government's preferred option is 2a, which we think is the best way to align the savings produced by the statutory scheme with the PPRS and would help companies in the statutory scheme to compete globally by providing stability in UK prices.

Why We Are Consulting

The reason we are consulting on reform to the statutory scheme is to meet the following challenges:

  • Relative to the health service sales covered, the statutory scheme produces lower savingsthan the PPRS and the gap is expected to widen;
  • We need to re-align the statutory scheme savings with the PPRS in order to promote a more level playing field between companies in the two schemes and in order to encourage companies to remain in the PPRS;
  • It is currently difficult to re-align the schemes because of the differences in the mechanisms used to make savings;
  • The current regulations leave the Department with challenges relating to price controls and enforcement which we need to address.

What Happens Next

The Department of Health will consider the consultation responses before making any amendments to the statutory scheme which controls prices of branded health service medicines.

In reaching a decision on the proposals, the Department will take into account the challenging financial position of the NHS, the need to align broadly the effect of the statutory and voluntary schemes, responses from people and organisations consulted and any other relevant factors.

Audiences

  • Charities
  • Managers
  • Commissioners
  • Pharmacists
  • Foundation Trusts
  • NHS Commissioning Board
  • Clinical Commissioning Groups
  • patient groups and patient advocates
  • Patients
  • Patients
  • Service users
  • Suppliers

Interests

  • Regulation