Payment of £79 million made by industry to underwrite the medicines bill

The Association of the British Pharmaceutical Industry (ABPI) and the Department of Health have announced the third quarter payment from industry of  £79 million to underwrite the growth of the medicines bill under the 2014 Pharmaceutical Price Regulation Scheme (PPRS). This takes the total payment made by industry in 2014 to £229 million.

Recognising the financial challenges facing the NHS, the pharmaceutical industry has agreed to help keep NHS expenditure on branded medicines in the scheme flat for two years and within agreed controlled growth levels for a further three years under the new five-year voluntary PPRS. The industry will underwrite any further expenditure by the NHS with agreed exclusions.

The growth rate of the branded medicines in the scheme in the first three quarters of 2014 is 5.93% - higher than the 3.87% original joint forecast. Based on this growth rate the Department of Health has today confirmed that the 2015 payment percentage will be 10.36%. It has also provided an estimate of future PPRS growth rates. Based on these estimates the payments for 2016-2018 would be 15% each year.

Commenting on these announcements, Stephen Whitehead, ABPI chief executive, said: “We believe that the PPRS is a platform to drive improved change across the NHS and provide patients with greater access to innovative medicines. It presents the NHS with a unique opportunity to increase the availability of the best branded medicines and most innovative treatments, at minimal cost. Although the increased spend demonstrates a trend towards growth in the use of medicines, we know that this growth is not in new, innovative medicines but in older medicines and specialised commissioning.

“The Department of Health’s growth estimates for 2016-18 are one possible scenario for the future; however the PPRS scheme is designed to calculate payments based on actual growth.

“In the PPRS there are also a number of commitments to improve the use of innovative medicines which are currently not being met. We are seeking a fair level of funding and growth in all therapy areas and care settings and are working with the Department of Health, NHS England and government to ensure action in key areas such as NICE reform, the CDF and medicines optimisation to maximise the benefits of the PPRS so that patients can get the right medicine at the right time.”