Education And Debate

Regulating the price of the uk's drugs: second thoughts after the government's first report

BMJ 1997; 314 doi: (Published 01 February 1997) Cite this as: BMJ 1997;314:365
  1. Alan Earl-Slater, senior lecturer in health economics (a.s.m.earl-slater{at}
  1. a Department of Medicines Management Keele University Keele ST5 5BG
  • Accepted 21 November 1996


Few industries in the UK are directly subject to profit regulation by central government. One such industry is the pharmaceutical industry supplying drugs to the NHS, which has had its profits regulated since 1969. Yet only in May 1996 did the government produce its first annual report on the regulatory scheme, and even then the report fails to cast much light on the scheme. In particular, there are seven major problems with the regulations and the way they are negotiated: they lack robust reasoning, a theoretical basis, an empirical basis, transparency, accountability, due process, and an analysis of their impact. Moreover, patients and health professionals are excluded from the bargaining process. All these problems could be resolved if the political will to debate them emerges.

Key points

  • To a degree profits are a stimulus for companies to produce new and better products

  • Drug profits on sales to the NHS have been regulated by central government since 1969

  • In May 1996 the government produced its first annual report on the profit regulations

  • Most patients and healthcare professionals are disenfranchised from the regulatory bargains

  • There are additional problems with the regulations and report: a lack of robust reasoning for the regulations; a lack of theoretical basis; a lack of empirical basis; a lack of transparency; a lack of accountability; a lack of due process and a lack of impact analysis

  • These problems can be resolved but only if the political will exists


    • Accepted 21 November 1996
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