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Published on 19 June 2008

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Agreement reached on drug pricing


A cancer charity has welcomed the British government’s announcement that an agreement has been reached on drug pricing rules which will mean a better deal for patients.

The deal agreed between the pharmaceutical industry and Department of Health will slash £310m a year off the National Health Service’s medicine bill. Savings totalling 5% will be delivered through a combination of measures, including a reduction in the price of out-of-patent branded medicines.

The new Pharmaceutical Price Regulation Scheme will offer companies support in the uptake of new medicines, ensuring that patients benefit from access to innovative treatments. The deal will also see the industry benefit from better stability and predictability in drug pricing over the next five years.

Cancer Research UK said the move was long overdue as the current system of drug pricing was “riddled with flaws”. “The UK is a world-leader in the discovery and development of new anti-cancer treatments, yet is slow in the uptake of these new medicines,” said the charity’s chief executive, Harpal Kumar. “We hope this announcement marks an end to this unacceptable situation.”

Health Secretary Alan Johnson also welcomed the news. “We have a duty to ensure that patients continue to benefit from innovative products at a reasonable price and the taxpayer gets value for money,” he said. “We also recognise the industry’s important contribution to the economy, developing new medicines, and to the UK’s research capacity.”

The Ethical Medicines Industry Group, which represents small and medium-sized drug companies in the UK, welcomed the new agreement.

Chairman Leslie Galloway said: “Proposals to increase the exemption thresholds for price cuts five-fold will improve the viability of smaller pharmaceutical companies within the sector and is a large win for our membership.”

Copyright © PA Business 2008

Pharmaceutical Price Regulation Scheme

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