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Pharmaceutical Price Regulation Scheme

Volume 589: debated on Thursday 11 December 2014

I am announcing today the level of payment due from members of the pharmaceutical price regulation scheme (PPRS) in 2015 to keep health service spend on branded medicines within the levels agreed under the scheme. The PPRS payment percentage for 2015 will be 10.36%.

The PPRS is a voluntary scheme agreed between the Department of Health, acting on behalf of the UK Government and Northern Ireland, and the branded pharmaceutical industry, represented by the Association of the British Pharmaceutical Industry (ABPI), under sections 261 to 262 of the National Health Service Act 2006. The current PPRS commenced on 1 January 2014 and lasts for five years, ending on 31 December 2018.

The PPRS allows patients access to the medicines they need while maintaining affordability for the NHS and providing stability for industry in support of the Government’s innovation and growth agenda. There is an agreed, fixed limit on the vast majority of NHS spend on branded medicines with additional expenditure above this level paid for by the pharmaceutical companies. Spend will stay flat in 2014 and 2015. Annual growth will be limited to 1.8% in 2016, 1.8% in 2017 and 1.9% in 2018. Small companies with less than £5 million of sales a year to the health service are exempted.

In the interests of transparency we are publishing our estimates of aggregate PPRS payments in 2014-15 and 2015-16. It must be stressed that these are only estimates at this stage. The Department is committed to publishing outturn quarterly aggregate sales and payments data for the PPRS on an ongoing basis.

In England, PPRS payments are taken into account in the allocations to NHS England through the mandate. All the payments will go back into spending on improving patients’ health and care.

The Department has published a document setting out further details entitled “2014 Pharmaceutical Price Regulation Scheme: revised forecasts and profile of payment percentages”. Copies have been placed in the Library and are available to hon. Members from the Vote Office and to noble Lords from the Printed Paper Office.

Attachments can be viewed online at: http://www.