The current Pharmaceutical Price Regulation Scheme (PPRS) is a voluntary scheme that generates a rebate to the DH, with a separate statutory discount scheme for those companies not signing up to the PPRS. The current statutory scheme operates through a cut of 15% in the maximum price of branded health service medicines on sale on 1st December 2013.
However, it turns out that the statutory scheme produces lower savings relative to the health service sales covered by the scheme than the PPRS and the gap is expected to widen. So, the DH wants to re-align the statutory scheme savings with the PPRS in order to promote a more level playing field between the two schemes and in order to encourage companies to remain in the PPRS….
“We are therefore consulting on the following options, in order to ensure that the cost of branded medicines to the NHS stays within affordable limits:
Option 1: A further cut in maximum price.
Option 1a: A further cut in maximum price including new products.
Option 2: A percentage payment by companies replacing the existing price cut.
Option 2a: A percentage payment by companies including new products.
In order to align relative savings better with those from the PPRS, and to encourage companies in the PPRS to remain there and not join the statutory scheme, we need to consult on a range of price cuts of between 20% to 30% and on a range of payment percentages of between 10% and 17%.
The Government’s preferred option is Option 2a, a payment system with the payment set between 10% and 17%, applying to new as well as old products.
All of this is open to consultation until 4th December.