New voluntary pricing agreement could cut NHS drugs bill by almost £1bn a year

NHS logo on paper

Patients could have early access to new medicines while the NHS is expected to save around £930m on its annual medicine bill under a new voluntary scheme to control pricing of branded medicines, which is expected to come into effect in January 2019.

The government and the Association of the British Pharmaceutical Industry (ABPI) announced on 23 November 2018 that they have reached a deal on the heads of agreement for a voluntary scheme for branded medicines pricing and access, which will replace the current Pharmaceutical Pricing Regulation Scheme, which expires on 31 December 2018. 

The details are still being finalised but the ABPI said in a statement that “a major milestone has been reached” in the discussions. It added that the scheme “would see the most transformative and best value medicines made available on the NHS more quickly through better horizon scanning, earlier commercial dialogue, and faster appraisals from the National Institute for Health and Care Excellence (NICE)”.

Health and social care secretary Matt Hancock said: “Cutting edge and best value medicines will be fasttracked [under the new agreement] and we will cut our medicines bill by £930m [in 2019] following tough but constructive negotiations with the pharmaceutical industry.”

Once the initiative is agreed in full, the terms of the heads of agreement suggest that NICE will undertake more technology appraisals, meaning that all new medicines are assessed by NICE. The NHS will be required to fund all those recommended for use, and more commercial options will be available to incentivise better value for the health service.

A 2% cap will be placed on the growth in sales of branded medicines to the NHS, with pharmaceutical companies repaying the NHS for any spending above that limit.

Last updated
Citation
The Pharmaceutical Journal, November 2018;Online:DOI:10.1211/PJ.2018.20205802