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UK pharma refunds 74m to cover first three-month drug overspend


UK pharma has made its first payments to the country's National Health Service (NHS) as part of a scheme designed to prevent overspend on drugs, according to a Monday announcement.

In a joint statement, the Association of the British Pharmaceutical Industry (ABPI) and the Department of Health announced a first payment of £74 million by industry to underwrite the growth in the branded medicines bill under the 2014 Pharmaceutical Price Regulation Scheme (PPRS).


The ABPI hopes that the scheme will achieve its aim of encouraging use of innovative medicines on the NHS, as well as ensuring the government achieves its goal of limiting drug spend.


The payment accounts for the first three months of 2014. The first year payments have been agreed at 3.74% of companies' net sales, which is based on a joint forecast of growth in the branded medicines bill.


In subsequent years the payments will be adjusted based on actual growth rates.


Under the new five year voluntary PPRS, the pharmaceutical industry promised to keep NHS expenditure on branded medicines in the scheme flat for two years and keep the growth rate below 2% for a further three years.


The industry will underwrite any further expenditure by the NHS with the exception of the agreed exclusions.


The agreed exclusions are exceptional central procurements such as national stockpiles for the security of the nation or pandemic preparation, procurements of centrally supplied vaccines, parallel imports and companies with sales of less than £5 million in the previous year.


134 companies, representing 93% of the UK branded industry joined the voluntary PPRS, which was agreed in November last year after negotiations to introduce value-based pricing for new medicines, reflecting their overall value to society, failed.


ABPI chief executive, Stephen Whitehead, said in the statement:


"This first payment is proof that the PPRS is working as it was designed to, and is a strong foundation to achieve better access to innovative medicines for patients across the country."


The ABPI is in discussion with the Department of Health and NHS England on how best to ensure that the scheme delivers better access to innovative medicines, he added.



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