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news.The new pharmaceutical price regulation scheme announced by the UK government will commence from January 1, 2009. The revised scheme will lower the prices of prescription drugs to the National Health Service by 3.9% from February 1, 2009, reported PharmaTimes.
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In addition, there will be further price adjustments, a 1.9% cut in January 2010, not contingent on the growth of the drugs bill; plus increases of 0.1% in January 2011, 0.2% in January 2012 and 0.2% in January 2013.
The government has also scrapped the loss of exclusivity measures from the earlier agreement that linked the prices of out-of-patent branded drugs to the price of any branded generics. Instead the government plans to introduce generic substitution in January 2010, with certain exemptions.
Under the new scheme, both the government and the industry can call for a review of the savings being delivered if the price cuts and generic substitution appear to be over or under-delivering on the 5% reductions sought over the scheme’s lifetime, the news source said.
Also, under the new flexible pricing arrangements agreed upon in the new scheme, companies can set the initial launch price for new active substances. The drug manufacturers can also increase or decrease this price as further evidence or new indications change the value that the medicine provides to patients.
But these arrangements will only apply when products are subject to National Institute for Health and Clinical Excellence (NICE) appraisal to determine whether the revised price provides value. NICE will, however, not participate either in price negotiations or indications.
The government has also increased the R&D allowance to a maximum of 30% of National Health Service (NHS) sales for assessing annual financial returns (AFR) and has also agreed to raise the threshold for AFR reporting to GBP35 million to ensure that the small and medium-sized pharmaceutical companies continue to provide high value and low-cost medicines to patients.
In addition, the government is also keen to adopt new initiatives that will encourage and reward innovation, thereby fostering growth in pharmaceutical R&D.
PharmaTimes has quoted Alan Johnson, UK’s health secretary, as saying: “A more flexible approach to pricing is in everyone’s interest. It gets clinically and cost-effective drugs to more patients, providing cheaper options where clinically appropriate, delivers value for money for the NHS and the taxpayer and creates a better market for the pharmaceutical industry, while supporting research and innovation.”