Positive march forward for PPRS negotiations

Government and the pharmaceutical industry have struck what has been described as a "significant" deal on parts of the new Pharmaceutical Price Regulation Scheme (PPRS).

Pledges to support uptake of new medicines that ensure patients benefit from access to innovative treatments is just one of a number of new agreements to have been ironed out.

Savings of 5% will be delivered through a combination of measures. A base price cut of 2% will be combined with additional measures to reduce the price of out-of-patent branded medicines where generic equivalents exist). Because this action on older medicines varies with time, there will be additional price cuts that vary year by year to ensure a 5% saving.

Provision will be made to freeze prices on 3 August 2008 until the price cut on 1 January 2009.

Included in the package are proposals to establish a single horizon scanning process for new drugs in development, with more systematic industry involvement, to support better forward planning. There are moves to extend the piloting of prescribing incentive schemes with PCTs, to promote uptake of innovative products and better use of existing levers in Payment by Results.

Secretary of State for Health Alan Johnson, said: "I am delighted that the Government and pharmaceutical industry have been able to make such encouraging progress. 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. We also recognise the industry's important contribution to the economy, developing new medicines, and to the UK's research capacity the ongoing PPRS negotiations.

The Department of Health has also launched a consultation on statutory proposals to control the price of branded medicines with effect from 1 September 2008. These measures would be introduced for any companies that choose not to sign up to any new agreement as a result of

ABPI president Chris Brinsmead welcomed the initial agreements, saying that they provided an "excellent platform" for industry to strengthen its relations with Government and the NHS in bolstering improved patient access to innovative medicines.

He said: "The outline PPRS will not only offer benefits to the NHS and to the industry, but most of all to patients, with a raft of measures designed to eliminate delays in providing the most modern medicines."

Further negotiations on the detail is required over the next few weeks, including on making sure that access to medicines reflects their value to patients, before the new scheme can be finalised and implemented.