UK's OFT proposes overhaul of UK drug pricing scheme; says NHS paying too much |
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Tue, 20 Feb 2007 10:08
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LONDON (AFX) - The National Health Service is paying too much money to drugs companies for medicines and reforms to the system could save 500 mln stg a year, said the Office of Fair Trading.The OFT wants the drug pricing regime reformed to focus investment on drugs that have the greatest benefits for patients.It estimates the NHS currently spends around 8 bln stg a year on branded prescription medicines.The OFT said the current Pharmaceutical Price Regulation Scheme, where companies are free to set their own prices within broad profit constraints, should be replaced with a patient-focused value based pricing scheme.Under the OFT's proposals the prices the NHS pays for medicines will reflect the therapeutic benefits they bring to patients.'Over time, value-based pricing would give companies stronger incentives to invest in drugs for those medical conditions where there is greatest need. Because the health services in many other countries base their prices on those in the UK, additional benefits would arise internationally,' the OFT said in a statement.The OFT's two year study found several drugs where it said prices were 'significantly out of line with patient benefits'.The watchdog also discovered some treatments prescribed in large volumes are up to 10 ten times more expensive than other drugs offering similar benefits.Value-based pricing would give companies stronger incentives to invest in drugs for those medical conditions where there is greatest need, the report said.OFT chief executive John Fingleton said the main problem was that 'prices paid to drug companies do not reflect the value of those drugs to patients'.'We would like to see incentives for investment directed much more towards complaints for which there are no current drug treatments,' he told BBC radio.Fingleton expected resistance from the drugs industry 'because they make quite a bit of money on one or two drugs which are close substitutes for existing drugs.'newsdesk@afxnews.comrar/fp/rarCOPYRIGHTCopyright AFX News Limited 2006. All rights reserved.The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News.AFX News and AFX Financial News Logo are registered trademarks of AFX News Limited
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Drug pricing scheme under OFT scrutiny 