Intended for healthcare professionals

Rapid response to:


The Pharmaceutical Price Regulation Scheme

BMJ 2007; 334 doi: (Published 01 March 2007) Cite this as: BMJ 2007;334:435

Rapid Response:

Pharmaceutical Price Regulation Scheme

Dear Editor

It is quite right to suggest that the Pharmaceutical Price Regulation
Scheme may benefit from change and that the Office of Fair Trading’s
recent proposals form a contribution to that debate, as Prof Joe Collier
suggests (BMJ, March 3). However, the PPRS is not “archaic” merely
because it has been in existence for a long time – it has undergone
substantial evolution during its 50 years of life.

During that time, it has maintained two principles which we would all
surely support: fair and reasonable medicines prices for the NHS coupled
with the good health of the UK’s successful research-based industry. The
UK is a world-leader in developing new medicines – it is only 3 per cent
of the global market but has 10 per cent of world R&D – and this is of
great benefit to everyone in the country, from patient to taxpayer.

It is something of a mystery why Prof Collier thinks that the PPRS is
a “secret deal” or what he means by his reference to central
reimbursement. The full text of the PPRS is openly available, inter alia,
on the Department of Health’s website; and annual reports are made on its
progress to Parliament so that they can be scrutinised by MPs and peers as
well as the public. And while the PPRS certainly determines the rules
under which companies can sell their medicines to the NHS throughout the
UK, it neither fixes prices nor arranges reimbursement.

Nor do I understand his reference to companies sharing the risk of
medicines development with the NHS, or expecting reimbursement if things
go wrong. R&D costs – amounting to some £500m over 10-12 years per
calling – are borne entirely by pharmaceutical companies, and the risk is
exclusively borne by them if the drugs fail.

Value for money is something the NHS should aspire to – and the
pharmaceutical industry would support this unequivocally. However,
medicines in the UK already represent excellent value for money, with
prices on a par with – or lower than – those of comparator European
countries, and the National Audit Office estimating that the PPRS has
produced £1.2 billion savings for the NHS. Primary care medicines account
for 11 per cent of NHS costs in 2005 – the same proportion as ten years
ago – and prices are 21 per cent lower in real terms than ten years ago.

The best way of saving the NHS money is not necessarily through the
pricing structure. Cost-effective prescribing is also part of the mix,
and the ABPI is already working with the Department of Health to develop
guidelines and systems to reinforce this – indeed, many of the savings
identified in the OFT study can be captured in this way.

Finally, in engaging in debate and discussion on this issue, it is
important to ensure that any new system does not introduce further delays
to patients’ access to new medicines and does not lead to major increases
in costly bureaucracy and red tape. We expect the Government to consider
very carefully how to make changes to the PPRS so that its existing
advantages are not put at risk.

Yours faithfully

Dr Richard Tiner

Medical Director

Competing interests:
None declared

Competing interests: No competing interests

09 March 2007
Richard S Tiner
Medical Director
The Association of the British Pharmaceutical Industry (ABPI), 12 Whitehall, London SW1A 2DY