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The pharmaceutical price regulation scheme1 is a
voluntary agreement between Britain's Department of Health and the Association of the
British Pharmaceutical Industry in which companies negotiate generous target profit rates from
sales
of drugs to the NHS (17-21% rate of return on investment in research and
development). The scheme's objectives are to secure the provision of safe and effective
medicines to the NHS at reasonable prices; to promote a strong pharmaceutical industry in
Britain;
and to encourage the efficient and competitive development and supply of medicines
worldwide.1 The scheme was renewed in 1993 for five
years
and is currently under review. Although the scheme has been successful in helping to maintain
the
British pharmaceutical industry, its objectives conflict, and the way the scheme operates pays
little
regard to other health policy objectives. As the price of renegotiation, the government should
request
changes to the scheme, to minimise the inherent conflicts
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