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UK pharma rebate payment doubles in one year

First quarter repayment £138m higher than this time last year


The rebate made by pharma to the Department of Health has jumped by nearly £140m in the first quarter of 2015 compared to the year ago period.

The UK pharma industry has been given strict limits under the new PPRS drug pricing scheme, agreed upon last year, which means that UK pharma firms must pay the NHS back any money it makes over the agreed upon limit.

These rebates will continue each quarter and each year until 2019, when a new deal is re-negotiated.

The first set of repayments began in 2014 but this has nearly doubled in just one year. The first quarter repayment in 2014 was just £74m.

But the ABPI, which represents the UK pharma industry, said that the growth rate of branded medicines covered by the scheme for the last six months was 3.03% - lower than the original forecast rate of 3.52% and down on the 2014 versus 2013 calendar year growth rate of 5.2%.

The deal is meant to help keep the £13bn medicines budget flat for two years of the PPRS scheme, and then not grow by more than 2% for the remaining three years of the deal. 

The ABPI, which negotiated the deal with DH in 2013, is keen to see this as 'underwriting' the NHS medicines bill. There has however been confusion over what this means. 

Last year Roche came out against NICE when it rejected its new breast cancer drug's £90,000 price tag, saying it believed that the rebates allowed it a remit to charge high prices. NICE quickly came out to say that this was not in fact the case.

There are also questions over just where this money goes after it is handed over to NHS England. 

The funds are meant to be disseminated across the more than 200 local NHS bodies known as CCGs - but both NHS managers on the ground and senior UK pharma leaders have told PMLiVE that they are not seeing this money being spent on the ground. 

Alison Clough, acting CEO and executive director commercial UK, for the ABPI said: “The NHS needs to ensure that this money allows clinicians to prescribe the medicines that they believe are right for their patients without undue focus on cost. This is currently not happening.”

She added that during 2014 the industry paid a total of £310m to the Department of Health under the PPRS, and that it is anticipating payments in excess of £800m for 2015. 

The Department has announced that the NHS has received £796m of these expected payments in its budget for this financial year.

Article by
Ben Adams

8th June 2015

From: Healthcare



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