Value based pricing for NHS drugs: an opportunity not to be missed?

doi:10.1136/bmj.39434.500185.25

BMJ 2008;336:251-254 (2 February), doi:10.1136/bmj.39434.500185.25

Analysis

Value based pricing for NHS drugs: an opportunity not to be missed?

Karl Claxton, professor of economics¹^,2, Andrew Briggs, Lindsay professor of economic evaluation and health policy³, Martin J Buxton, professor of health economics⁴, Anthony J Culyer, professor of economics²^,6, Christopher McCabe, professor of health economics ⁵, Simon Walker, research fellow ¹, Mark J Sculpher, professor of health economics ¹

¹ Centre for Health Economics, University of York, York, ² Department of Economics and Related Studies, University of York, York, ³ Public Health and Health Policy, University of Glasgow, Glasgow, ⁴ Health Economics Research Group, Brunel University, Middlesex, ⁵ Institute of Health Sciences, University of Leeds, Leeds, ⁶ Department of Health Policy, Management and Evaluation, University of Toronto, Toronto, Canada

Correspondence to: M Sculpher mjs23@york.ac.uk

The policy debate about price, value, and innovation in pharmaceuticalsis at a critical stage for the NHS. Claxton and colleagues describethe key principles of value based pricing and consider someof the concerns about such a scheme

The first 150 words of the full text of this article appear below.

The NHS spends about £11bn ( ${euro}$ 15bn, $22bn) annually on pharmaceuticals,of which £8bn is on branded drugs, representing about13% and 10% respectively of available resources.¹ As growthin NHS funding is expected to slow, access to innovative technologieswill depend on savings found elsewhere. The UK Department ofHealth uses the pharmaceutical price regulation scheme to controlexpenditure on branded drugs. This 50 year old scheme is intendedto control the profits companies can earn through periodic andgeneral price cuts. A report by the Office of Fair Trading recommendedreform, basing a drug’s price on its health benefits.¹² The government has confirmed its intention to renegotiatethe existing scheme,³ and a recent House of Commons Health Committeereport has also welcomed reform.⁴ ⁵ The policy debate aboutprice, value, and innovation is at a critical stage for theNHS.

Establishing the value of a drug requires an assessment . . . [Full text of this article]

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