Unbiased Analysis of Today's Healthcare Issues

UK to Pharma: Cut spending by 4%

Written By: Jason Shafrin - Nov• 06•13

Looks likes cuts to UK reimbursement rates for Pharma are on the way:

People involved in the PPRS drug pricing talks have told the Financial Times on Tuesday, that drug companies operating in the UK have agreed the drugs bill to the NHS for their patented (but not generic drugs or vaccines) products will fall by 3.7% next year, and be flat in 2015…. As part of the plans NICE has agreed to lower the £30,000 QALY threshold above which a drug is considered too expensive, but will also start to consider the ‘wider societal benefits’ of medicines in line with its cost, as part of a new deal on drug pricing policy.

The UK was set to institution a value-based pricing scheme, but for now the PPRS approach will remain. The UK has used the PPRS to price drugs for the past 56 years. What happened to value-based pricing? Pharmafile explains.

NICE was initially meant to be axed and replaced with VBP boards that would pay for medicines based on new criteria of what the government believed a drug’s value should be, including whether it can reduce the need for social care costs.

But after healthcare professionals complained about its downgrade, NICE was given a reprieve and reinstated as the only health technology assessor in England, leaving the VBP plans in tatters.

Efforts to reduce pharmaceutical spending wil improve the fiscal situation in the UK, but may harm pharmaceutical innovation. In fact, “many firms – including Pfizer and AstraZeneca in recent years – have pulled their R&D and manufacturing operations out of the UK because of poor uptake and price barriers, such as NICE.”

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