September 22, 2005

The cost of prescriptions in the UK increased by an average of 6.2% per year between 1999 and 2004, according to official statistics. The rise has been driven by a 5.2% year-on-year increase in the volume of drugs prescribed. The remaining 1% price rise was caused by a gradual increase in costs, as new and more expensive medicines became available.

However, spending on prescription drugs in the UK has been rising at a slower rate than in other areas of state-run healthcare provider the National Health Service (NHS). Drug expenditure at manufacturer prices fell slightly from 12.7% of total spending in 1997 to 12.2% in 2004, mainly due to government cost-cutting.

Costs should be reduced even further in the future, as new legislation introduced at the beginning of 2005 requires companies with sales to the NHS in excess of GBP1bn (US$1.81bn) to reduce medicines prices by 7%. Prescription medicines still account for the vast majority of drug spending in the UK -- some 86% of the total -- as doctors are traditionally the primary access point for healthcare.

Meanwhile, drug expenditure across the UK remains uneven, with Northern Ireland leading the way, spending GBP214 (US$386.37) per person per year, followed by Wales, GBP192 (US$346.61), Scotland, GBP168 (US$303.28) and England, with spending totalling GBP158 (US$285.22).