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Review of Part IX of the Drug Tariff

Volume 449: debated on Monday 11 September 2006

The arrangements under part IX of the drug tariff have not been reviewed for over twenty years and there were clear indications that neither the NHS nor the taxpayer were receiving value for money.

We have therefore been consulting with the market over potential price cuts since October 2005.

In reviewing part IX, the Government’s objectives have been to:

Maintain, and where applicable improve, the current quality of care to patients;

secure value for money for the NHS;

ensure equitable payment for equivalent services and transparent reimbursement pricing;

work in partnership to deliver fair prices for the NHS and reasonable returns for suppliers and contractors;

facilitate the introduction of innovative solutions;

maintain local choice in the provision of services; and

keep administration arrangements to the necessary minimum.

We have consulted extensively with industry on these issues. Following consultation on dressings and chemical reagents, we have decided to implement a staged price reduction of up to 15 per cent. to the April 2006 drug tariff reimbursement prices for some blood glucose detection strips. Initially, reimbursement prices will be reduced by 12 per cent. on all affected products from 1 October 2006. This may be followed by a further reimbursement price reduction of 3 per cent. from 1 November 2006. We hope that the 3 per cent. variant will allow the market to maintain the free provision of related services, including the supply of educational material, helplines and metres. Responses to the consultation indicated that a price reduction of 15 per cent. may mean that it would be difficult to maintain these services. We have written to companies to inform them of the price changes.

A consultation on stoma and incontinence appliances has closed today and further consultation with industry will be held.