Drugs deal reached
Released 20/11/2008
Government agrees deal that could save NHS millions
The NHS could save up to £550m a year after a new deal was struck between the government and drugs industry.
The new flexible pricing scheme will see new drugs being introduced at an initially low price, with prices only increasing if the treatment proves effective.
The deal is projected to save the NHS £350m in 2009/20, with further savings of £550m every year after that.
Last year the NHS spent £10.6bn on drugs, which equates to around 12 per cent of the overall healthcare budget.
The current pricing systems sees drugs companies set the price at the introduction phase, often basing it on projected results, before real evidence has been gathered.
Health Secretary Alan Johnson said: "A more flexible approach to pricing is in everyone's interest."
"It gets clinically and cost effective drugs to more patients - providing cheaper options where clinically appropriate - delivers value for money for the NHS and the tax payer, and creates a better market for the pharmaceutical industry while supporting research and innovation," said Johnson.
Dr Richard Barker, director general of the ABPI, said: "This landmark deal marks a turning point for patients, the NHS and the pharmaceutical industry."
"It is an all-encompassing package that encourages the discovery of new, more effective medicines, while at the same time allowing NHS patients to access these treatments more quickly," said Barker.
Nigel Edwards, director of policy at the NHS Confederation said: "It is good news that this is now starting to happen although we would caution that there needs to be care taken that this does not land doctors and nurses with a heavier workload of form filling and bureaucracy."