UK Government Agrees to Change Drug Pricing System

The UK government has issued a statement saying it plans to renegotiate the system of price controls between the National Health Service (NHS) and pharmaceutical companies.

The Department for Business, Enterprise and Regulatory Reform issued an interim response to a report published by the Office of Fair Trading (OFT) in February saying that the NHS drug price regulation scheme should be replaced with a value-based system.

“We agree with the OFT that it is time to develop a pricing system which is fit for purpose for the 21st century,” Minister for Competitiveness Stephen Timms said. “We must ensure that any future pricing scheme delivers value, rewards innovation and ensures a fair deal.”

The Department of Health said in an Aug. 2 statement that the secretary of state is planning to begin discussions with industry to renegotiate the Pharmaceutical Price Regulation Scheme (PPRS). “Any new agreement will recognize the contribution of the pharmaceutical industry to the UK economy through the provision of healthcare and the development of medical advances,” a Department of Health spokesperson said.

In the U.S., lawmakers have made progress this year on legislation that would allow the HHS secretary to negotiate prices with companies for Medicare Part D prescription drugs. The Senate Finance Committee passed S. 3, the Medicare Prescription Drug Price Negotiation Act of 2007, in April, while the House passed companion legislation, H.R. 4, in January. The president has threatened to veto the House bill.