The NHS across the UK is expected to save around £930m on its medicine bill under a new scheme being finalised with the pharmaceutical industry, which will replace the Pharmaceutical Price Regulation Scheme.

The government and the Association of the British Pharmaceutical Industry (ABPI) have reached a deal on the Heads of Agreement for a new voluntary scheme for Branded Medicines Pricing and Access, which is expected to come into effect from January 2019. If agreed, it will replace the Pharmaceutical Pricing Regulation Scheme (PPRS), which expires at the end of this year.

The scheme is designed to keep growth in the branded medicine bill predictable and affordable by:

  • Placing a two per cent cap on the growth in sales of branded medicines to the NHS, with pharmaceutical companies repaying the NHS for spending above that limit – delivering expected savings of around £930 million in 2019.
  • Supporting smaller companies to innovate through payment exemptions and targeted case management through NHS England commercial discussions
  • Simplifying price controls: reducing unpredictability and complexity for companies and the NHS
  • Enabling faster and more flexible commercial discussions to get the best value and most effective new medicines into use as quickly as possible.

The final details are still being finalised, but a major milestone has been reached in the discussions which 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).

Meanwhile the Department of Health has published proposed changes to the statutory scheme to control the costs of branded health service medicines. Following a consultation held earlier in the year the government will amend the 2018 Regulations to set a payment percentage calculated to limit the expected growth of net branded health service medicines sales to 1.1 per cent pa nominal growth from the 2018 baseline.

Companies have a choice as to whether to be part of the voluntary scheme agreed with the ABPI, and the statutory scheme applies to those companies that choose not to.

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