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UK to cut spending on new medicines

But increased uptake of generics means overall drug spend will rise, says OHE report

The UK's National Health Service (NHS) looks set to cut its spending on new medicines in real terms between 2011 and 2015, according to a new report, although spending on drugs as a whole will rise by around 1.3 per cent over the period.

The report - which was carried out by the Office of Health Economics on behalf of the Association of the British Pharmaceutical Industry (ABPI) - predicts that the total amount spent on medicines annually by the NHS will rise from 3.5 per cent between 2007 and 2011 to 3.7 per cent per year up to 2015.

However, this increase will mainly be driven by increased uptake of generic drugs, with upcoming patent expiries saving the NHS £3.4bn over the next three years, and sales growth for branded drugs will be relatively flat.

By 2015 newer products - ie those launched between 2012 and 2015 - will account for less than 2 per cent of NHS spending, according to the OHE.

In 2011, the NHS spent £13.6bn on drugs - including £10bn on branded medicines - accounting for 9.6 per cent of its total budget.

By 2015, the spend will be £15.6bn, of which around £11bn will be on branded drugs depending on the levels of discounts offered by industry, equivalent to around 7 per cent of the total NHS budget.

"I am deeply concerned that these savings are not being reinvested back into the system because these figures show our spending on the newest and most advanced medicines is declining in real terms," commented ABPI chief executive Stephen Whitehead.

 "We have to stop thinking of medicines as a cost and see them for what they are - an investment," he added, noting that this investment is in medical research, reduced hospital stays and GP visits, the UK economy and people's health.

The consequence of a lack of investment can be seen by the slow speed at which UK patients get access to new medicines compared to their peers in Europe, said the ABPI.

The organisation points out that the most recent Pharmaceutical Price Regulation Scheme (PPRS) report to parliament, published in February, 2012, found that the UK has the lowest medicine prices compared with a wide range of developed countries.

4th July 2012

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