"The government has agreed a deal with the pharmaceutical industry to cap the NHS drugs bill at about £12bn, with companies paying the excess if doctors prescribe medicines that cost more.
After 18 months of negotiations the Department of Health announced a deal that will keep the bill for the more expensive branded medicines flat for two years, and then allow a gradual rise of less than 2% for the next three.
It means patients will not be denied drugs that have a high price tag, because the industry as a whole will refund the NHS for any spending above the cap. All the companies will pay an equal share of the refund – which is an incentive to those that are innovating and producing new drugs that will be well used.
"This agreement ensures NHS patients will receive the best and most advanced medicines in the world while managing the cost," said the health secretary, Jeremy Hunt." Source: The Guardian, 6th November 2013.
What is going on?