Excessive pricing is taken very seriously and the Government is committed to making sure the supply of medicines to the NHS is as competitive as possible.
A large part of the NHS budget is spent on medicines, with total expenditure in England estimated at £16.7 billion in 2020/21. The Department of Health and Social Care (DHSC) has various mechanisms to reduce that level of spending. This month, a landmark deal was agreed that is set to save the NHS an estimated £14 billion over five years in medicines costs. The deal will also enable patients to access the latest lifesaving treatments more consistently and will boost the UK’s position as a global superpower in advanced healthcare, technology and clinical research.
The voluntary scheme for branded medicines pricing, access and growth (VPAG) has been agreed by the Government, NHS England and the Association of the British Pharmaceutical Industry (ABPI) and will run for five years until 31 December 2028. Further information about this agreement can be found here: Landmark deal to boost nation’s health and save NHS £14 billion - GOV.UK (www.gov.uk)
An additional £400 million of life sciences investment by industry will accelerate work on clinical trials, manufacturing and in health technology assessments agencies, encouraging UK economic growth, collaboration and innovation in the sector.
For unbranded, or generic, medicines, the Department relies on competition to keep prices down. This has led to some of the lowest prices in Europe. Four in five medicines prescribed in the NHS are also non-branded, helping the health service to achieve further savings. A total of £1.2 billion has been saved on medicines in three years.
I know there are instances where there is little competition, or competition is working ineffectively and, as a result, the NHS is paying higher than expected prices for generic medicines. I am pleased therefore that the Competition and Markets Authority has opened several investigations into pharmaceutical companies’ suspected breaches of the Competition Act, which have resulted in large fines for companies found to be abusing their position by charging excessive and unfair prices. Examples of this include phenytoin, prochlorperazine, hydrocortisone and liothyronine.
(November 2023)
