This voluntary scheme has been in place for over 50 years and helps to provide the pharmaceutical industry and the Government with a stable environment to introduce medicines into the NHS, making sure patients can get access to the newest, most effective treatments available, while helping to sustain a thriving UK pharmaceutical industry.
A voluntary scheme has been negotiated every five years, with the next scheme due to start in January 2019.
The current PPRS – negotiated in 2014 at a time of austerity in the UK – sought to cap the growth of NHS spend on branded medicines at an agreed rate, with any overspend paid back to the NHS. This was to provide stability of spend to the NHS and offer an incentive to use new medicines at no extra cost.
To date, the industry has paid back over £3 billion to the Department of Health and Social Care for NHS spending above the cap. That’s around a million pounds a day.
We know with absolute certainty that the growth of NHS’ spend on medicines under this PPRS over five years has remained stable at 1.1%. When taking inflation into account, that’s actually a 0.4% decline. By contrast the wider NHS spend has risen at 3.3% over the same period.
Companies who choose not to be in the voluntary scheme are subject to statutory pricing controls which impose a set price cut to medicines not within the PPRS scheme. Older – generic – medicines do not have a similar scheme, however, for the most part strong competition keeps prices extremely low.