Pharma underwrites medicines bill with £207 million

The Department of Health and the ABPI have confirmed a payment of £207 million from pharma to underwrite growth of the medicines bill for the first quarter of 2015.

The move sits under the 2014 Pharmaceutical Price Regulation Scheme (PPRS) that terminates at the end of 2018, and follows its fourth quarter payment announced in March.

Representing 93% of the UK, 134 companies from the branded industry joined the voluntary PPRS – which was agreed in November 2013.

Now the growth rate of branded medicines covered by the scheme for the last six months was 3.03% – lower than the original forecast rate of 3.52% and down on the 2014 versus 2013 calendar year growth rate of 5.2 per cent.

Alison Clough who is the acting chief executive and executive director for commercial UK at the ABPI, says: “Today’s announcement once again demonstrates industry’s commitment to supporting the NHS in a time of austerity and reinforces the unique opportunity that the PPRS provides government and the NHS to offer patients access to newer, innovative medicines at minimal additional cost.

“We are not yet seeing the growth in all types of new innovative medicines, which the PPRS was designed to achieve, nor are we yet seeing a fundamental change, breaking down the barriers that get in the way of this happening.

She notes however that industry is ‘committed to working with government’ and the NHS to accomplish this, and points to its joint PPRS/Medicines Optimisation programme with the NHS and the Academic Health Science Networks (AHSNs).

Clough adds: “During 2014 industry paid a total of £310 million to the Department of Health under the PPRS and it is anticipating payments in excess of £800 million for 2015. The Department has announced that the NHS has received £796 million of these expected payments in its budget for this financial year.

“The NHS needs to ensure that this money allows clinicians to prescribe the medicines that they believe are right for their patients without undue focus on cost. This is currently not happening.”

Pharma will underwrite any further expenditure by the NHS subject to specific exceptions set out in the PPRS. It has agreed to keep NHS expenditure on branded medicines flat for two years and under 2% growth for the following three years.

Companies will make percentage payments based on any difference between allowed growth and actual growth in NHS expenditure on branded medicines, subject to the agreed exclusions.

Brett Wells

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