UK government to revise drug price scheme

The UK government is pushing on with proposals that aim to limit profits from companies operating outside the main pharma pricing scheme.

Most pharma companies have signed up to the Pharmaceutical Price Regulation Scheme (PPRS), where industry reimburses the government if drug spend exceeds pre-agreed thresholds.

But in a consultation the government said that it wanted further control over prices from companies that choose to stay outside the PPRS, and are instead signed up to the so-called Statutory Scheme.

In the consultation response, the Department of Health said a total of £157 million in savings have been lost because some companies had instead opted to join the Statutory Scheme.

The government has opted to replace a 15% discount, applied to all medicines sold to the National Health Service, with a repayment percentage of 10-17% of sales.

This applies to all medicines in the Statutory Scheme on sale on 1 December 2013, and all drugs on the scheme launched since then.

The consultation document, perhaps unsurprisingly, showed National Health Service organisations under intense pressure to make savings are in favour of the proposals.

However the government also noted that the changes proposed “could be viewed by global pharmaceutical boards as creating an unsettled market.”

One of the most notable companies on the Statutory Scheme is Gilead, whose hepatitis C and HIV treatments represent a high percentage of the NHS's specialised medicines budget. The government wants to claw back as many savings from Gilead and other companies on the scheme as possible, and doesn't want the Statutory Scheme to be a more attractive option than the main PPRS agreement.

Industry also suggested the government does not have the power in domestic legislation to implement the preferred option, saying it amounted to a “sales tax”, according to the consultation summary.

The government is also not yet clear on how the repayments will be calculated and the payment mechanism involved.

Some responses suggested the proposals were in conflict with European legislation, including the Transparency Directive, governing pricing arrangements for medicines.

Leslie Galloway, chairman of the Ethical Medicines Industry Group representing small and medium-sized pharma, was concerned about the impact of the proposals on the pharma industry.

He told pharmaphorum that the proposals “send the wrong messages to global pharmaceutical leaders about investing in our country."