Branded Medicines Pricing

Steve Brine Excerpts

Friday 23rd November 2018 Written Statements

[The Parliamentary Under-Secretary of State for Health and Social Care (Steve Brine)]

My hon. Friend the Parliamentary Under Secretary of State for Health (Lords) (Lord O'Shaughnessy) has made the following written statement:

I am pleased to inform Parliament that agreement has been reached on a heads of agreement for a new voluntary scheme for branded medicines pricing and access. The voluntary scheme is an agreement between the Department of Health and Social Care, on behalf of the four UK Governments, and the pharmaceutical industry, represented by the Association of the British Pharmaceutical Industry (ABPI).

This is an important milestone in the ongoing negotiations. If all proposals in the heads of agreement are agreed in a full scheme document, then the new voluntary scheme will operate for five years starting from 1 January 2019. The current voluntary scheme, the 2014 Pharmaceutical Price Regulation Scheme, will end on 31 December 2018.

The new voluntary scheme is expected to benefit patients, the NHS and the life sciences industry through delivery of its overarching objectives of improving patient access to medicines, innovation and affordability. If final agreement is reached on the proposals set out in the heads of agreement, patients will benefit from faster adoption of clinically and cost-effective medicines so they have access to the best available treatment. The deal is expected to deliver a benefit of £930 million next year, to be reinvested into the NHS. The proposals also demonstrate the Government’s commitment to innovation through measures to improve uptake of transformative new medicines, to support small businesses through improved exemptions from the cost control mechanism and targeted case management of commercial discussions with NHS England, and to provide greater commercial flexibility for companies that offer the best value new medicines. In addition, the new voluntary scheme would deliver better value for the NHS by ensuring the branded medicines spend remains within affordable limits through an overall cap on growth on NHS branded medicines sales.

Taken together, the new voluntary scheme is expected to support the Government’s commitment to ensuring the UK remains an attractive hub for our world-leading life sciences sector, a central part of the Government’s industrial strategy.

A summary of the heads of agreement has been placed in the Library. Further information will be provided as the negotiations progress.

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