NHS medicines 'cost millions too much'

Published on Wednesday 21 February 2007 01:46

THE NHS is paying drugs companies hundreds of millions of pounds too much for some branded medicines, a report warned yesterday.

The Office of Fair Trading called for the UK-wide drugs purchasing system - the Pharmaceutical Price Regulation Scheme (PPRS) - to be overhauled.

Under the PPRS companies are free to set the initial prices of drugs but have a maximum level of profits they can earn.

But the OFT recommends that the system is replaced with a "patient-focused, value-based pricing scheme" to ensure that the price of drugs reflects their clinical and therapeutic value to patients.

The study identified several branded drugs where prices were "significantly out of line with patient benefits".

They suggested that some drugs currently prescribed in large volumes are up to ten times more expensive than substitute treatments that deliver very similar benefits.

But the pharmaceutical industry insisted the PPRS had done a "good job" of providing value for money in health-care and said companies needed to be encouraged to invest in research and development.

John Fingleton, the chief executive of the OFT, said: "Focusing prices on the needs of patients rather than on the costs of drug companies would be good for patients and business."

A Scottish Executive spokeswoman said: "It is important that we have fair prices which give value for money and we are continually looking at ways to achieve this.

"We recognise the importance of the pharmaceutical industry to healthcare and the development of medical advances, and it is in all our interests to encourage research and reward innovation," the spokeswoman said.