Pharma companies make multiple price cuts

This month sees price reductions for many branded drugs in accordance with the 2009 Pharmaceutical Price Regulation Scheme (PPRS).

The UK-wide scheme aims to deliver value for money for the NHS by securing the provision of safe and effective medicines at reasonable prices, and encouraging the efficient development and competitive supply of medicines. The scheme also aims to encourage innovation within the pharmaceutical industry and to promote access
and uptake for new medicines.

PPRS KEY FACTS
The PPRS:
  • Is a voluntary agreement between the Association of the British Pharmaceutical Industry (ABPI) and the Department of Health (DH) on the pricing of branded drugs in the UK.
  • Is open to both ABPI members and non-members.
  • Will operate for not less than five years (starting 1st January 2009).
  • Applies to all branded, licensed prescription medicines supplied to the NHS.
  • Makes provision for two separate price cuts:
    • a 3.9 per cent reduction in February 2009 and;
    • a 1.9 per cent reduction in January 2010.
  • Is intended to reduce NHS expenditure on branded drugs by an average of 5 per cent per annum over the lifetime of the scheme through the initial price cut and the introduction of generic substitution (scheduled for January 2010).
  • Specifies that companies with NHS home sales less than £5 million in 2007 are exempt and that for companies with NHS home sales less than £25 million in 2007 the first £5 million sales will be exempt from price adjustments.
  • Specifies that companies may choose to make an across the board reduction in prices or to modulate the list price of their PPRS products by changes that equate to an overall level of 3.9 per cent in 2009 (subject to certain provisions). Companies may also choose to deliver up to 2 per cent of the price cut via a direct payment to the DH.
  • Specifies that where 30 per cent or more by value of a company's NHS sales of a product are over-the-counter the company may choose to deliver the price cut via a direct payment to the DH.

MIMS lists the new PPRS prices except where companies were still negotiating with the Department of Health at the time of going to press.

Further information: Department of Health - 2009 PPRS

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