Prices of UK NHS branded medicines to drop by 3.9%
This article was originally published in SRA
The UK Department of Health has finalised the new Pharmaceutical Price Regulation Scheme for a 3.9% reduction in prices of all branded medicines being supplied to the National Health Service from 1 February1-3. Companies had until 31 December to sign up to the scheme, which envisages a further price cut of 1.9% from 1 January 2010.
The government plans to achieve further savings by introducing generic substitution from January 2010, subject to discussion with stakeholders. The aim is to allow pharmacists to substitute a branded drug with a generic unless the doctor insists on the branded medicine.
The new PPRS comes into effect in January 2009 in the form of a noncontractual voluntary scheme and will run for at least five years. Companies that do not sign up to the scheme will be subjected to statutory price control regulations and will have to reduce the price of their medicines by 3.9% from February 2009, subject to certain exemptions.
According to the government, PPRS 2009 encompasses a much broader agenda than past schemes and includes elements that have not been included previously. It has special provisions to support small- and medium-sized companies.
To enable the health department to monitor the price reduction, companies have until 6 January 2009 to submit details on how they intended to carry out the price cuts, along with a list of NHS prices proposed from February 2009 and the NHS prices that were in place at 31 December. Companies have the option of delivering the price cuts in a number of ways: through across-the-board reduction; modulation; part payment; and payments with regard to over-the-counter medicines.
Warning on misusing price reductions in promotional material
The Prescription Medicines Code of Practice Authority, which administers the Association of the British Pharmaceutical Industry’s code of practice, is warning companies against misusing the price reductions in their promotional material4.
“It will not be acceptable at any time to give comparative prices in promotional material if these involve the new lower prices of the advertiser’s products and the superseded higher prices of competitor products,” it said.
The PMCPA said it will be in a company’s own interest to reflect the new lower prices in its promotional material as soon as possible. However, it is allowing three months (from 1 February to 30 April 2009) for the companies to reflect the accurate pricing information in their promotional material - during which, mentioning the old higher prices will not be considered a breach of the code.
References
1. UK Department of Health, Letter to PPRS scheme members, 11 December 2008, www.dh.gov.uk/en/Publicationsandstatistics/Lettersandcirculars/Dearcolleagueletters/DH_091828
2. UK Department of Health, 2009 PPRS, 16 December 2008, www.dh.gov.uk/en/Publicationsandstatistics/Publications/DH_091825
3. The Regulatory Affairs Journal - Pharma, 2008, 19(12), 851-852
4. PMCPA, Advice on the Code, December 2008, www.pmcpa.org.uk/?q=node/680