Britain unveils new scheme to curb drug prices

Reuters

By Ben Hirschler

LONDON, Nov 6 (Reuters) - Britain's Department of Healthunveiled a new five-year scheme on Wednesday to curbprescription drug prices and ensure the state healthcare systemgets good value for money.

The cost of branded medicines to the National Health Servicewill be held flat for two years under the latest version of thepharmaceutical price regulation scheme, or PPRS.

Drugmakers will be required to rebate the difference betweenthe allowed growth in the drugs bill and the estimated actualincrease in the cost of treatments, expected to be 3.74 percentin 2014.

Costs will be allowed to rise by 1.8 percent in 2016 and2017, and by 1.9 percent in 2018.

Governments across Europe have been taking a tough line ondrug costs as stagnant economic growth hits their healthcarebudgets.

In Germany, Chancellor Angela Merkel's conservatives and thecentre-left Social Democrats agreed on Monday to maintain asimilar tight rein on prescription drug costs via legallymandated price discounts.

The new deal struck between the British government and theAssociation of the British Pharmaceutical Industry (ABPI)follows several months of negotiations during which the ABPIargued that medicine prices in Britain are already among thelowest in Europe.

It also includes a statutory price cut of 15 percent for anycompanies that do not sign up to the voluntary PPRS scheme, theABPI said.

Drugmakers have long complained about low prices and slowuptake of new medicines in Britain, which they argue underminesthe case for investment in the country. Pharmaceuticals are animportant industrial sector in Britain, although recently therehave been significant site closures by a number of companies.

The trade body represents British companies such asGlaxoSmithKline Plc and AstraZeneca Plc, aswell as the UK units of multinationals like Pfizer Inc and Novartis AG.

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