General News

2009 PPRS Agreement Announced

The Department of Health has today announced a summary of the new PPRS agreement.

The headline agreements with industry include:

a cut in the cost of drugs sold to the NHS: a 3.9 per cent price cut will be introduced starting in February 2009.
a further price cut of 1.9 per cent will be introduced in January 2010;
Subject to discussion with affected parties, the Department of Health will also introduce generic substitution from January 2010. There would be further price adjustments on January of each year aimed as the proportion of savings from generic substitution varies with time;
action to support innovation so patients have faster access to new medicines that are clinically and cost-effective;
a new non-contractual voluntary scheme providing stability and predictability in Pharmaceutical Pricing for the next 5 years;
new and more flexible pricing arrangements that will enable drug companies to supply drugs to the NHS at lower initial prices, with the option of higher prices if value is proven at a later date; and
the more systematic use of patient access schemes by drug companies to allow access to medicines which have not initially been assessed as cost or clinically effective by NICE.

As with the current PPRS, companies will have freedom of pricing for new products and be able to modulate prices.

Alan Johnson said:

"A more flexible approach to pricing is in everyone's interest. It gets clinically and cost effective drugs to more patients - providing cheaper options where clinically appropriate - delivers value for money for the NHS and the tax payer, and creates a better market for the pharmaceutical industry while supporting research and innovation.

"Patient access schemes together with flexible pricing of pharmaceuticals will also enable the NHS to offer more patients a wider range of more expensive drugs as recommended by the National Cancer Director Mike Richards in his recent Report on improving access to medicines for NHS Patients."

Dr Richard Barker, Director General of the ABPI said:

"This landmark deal marks a turning point for patients, the NHS and the pharmaceutical industry. For the first time, the PPRS is much more than a simple economic agreement that looks at price alone.

"It is an all-encompassing package that encourages the discovery of new, more effective medicines, while at the same time allowing NHS patients to access these treatments more quickly.

"With the Department of Health, we have developed a solution that addresses the immediate needs of patients and their families, and the NHS.

PSNC Comment

PSNC Chief Executive Sue Sharpe said:

"We are very pleased that DH has listened to our concerns about the dangers of shortages of medicines for patients if changes were implemented from 1 January. Deferring introduction of the price reductions to 1 February, together with the agreement that pharmacies will be reimbursed for medicines dispensed in February at January prices, will help to protect pharmacies' ability to meet patient's needs promptly.

In principle we support the proposals for generic substitution although there will be many details to negotiate with the Department of Health in the coming months. It is important that all the ramifications are fully explored so contractors have a clear framework within which to operate, and so PSNC can ensure that the financial implications are fully addressed. This element of the PPRS scheme will not be implemented until January 2010 which will allow us time to work with the Department of Health on all the aspects of concern to contractors."

Posted 19 November 2008

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