Launched: September 2005
To assess whether the Pharmaceutical Price Regulation Scheme (PPRS) is the most effective means of securing value for money for the NHS, whilst offering appropriate incentives for pharmaceutical companies to invest in new and useful drugs for the future.
(Study following in-house work.)
OFT identified a number of drugs where prices are significantly out of line with patient benefit. These include treatments for cholesterol, blood pressure and stomach acid. Some drugs currently prescribed are up to ten times more expensive than substitute treatments that deliver very similar benefits to patients.
The current 'profit cap and price cut' scheme should be replaced with a patient focused value based pricing scheme in which the prices the NHS pays for medicines reflect the therapeutic benefits they bring to patients. This would enable the NHS to obtain greater value for money from its existing drug spend.
1. Recommended that the current profit cap and price cut' scheme be replaced with a patient-focused, value-based pricing scheme, in which the prices the NHS pays for medicines reflect the therapeutic benefits they bring to patients.
2. This would enable the NHS to obtain greater value for money from its existing drug spends. Two options proposed:
Interim Government response, in August 2007, broadly welcomed the report and stated that it will undertake a continuing programme of detailed analysis of the OFT report's proposals, and will discuss this analysis with industry taking into account their strong concerns about a number of the proposals.
Government will make further proposals as part of the ongoing PPRS re-negotiation.
Download OFT market study report 'Pharmaceutical Price Regulation Scheme' February 2007 (pdf 1Mb)
Download the annexes of the report:
See press release 'OFT report recommends reform to UK drug pricing scheme'. 20 February 2007
Download the Government's response to the Pharmaceutical Price Regulation Scheme (PPRS) (pdf) 30 June 2009
See Pharmaceutical Price Regulation Scheme: Eighth Report to Parliament 24 March 2005
See press release 'OFT to study drug pricing scheme'.13 September 2005
See press release 'OFT to continue study into drug pricing scheme'. 23 March 2006
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