Value-driven price deal

Small companies and patients stand to benefit from the recently renegotiated Pharmaceutical Price Regulation Scheme (PPRS). Rather than the 5% across-the-board price cut to medicines proposed in June, the finalized deal recommends a pricing scheme that staggers and delays price cuts. PPRS is a voluntary agreement between government and industry on pricing of branded drugs supplied to the National Health Service (NHS). The finalized PPRS recommends a 3.9% price cut in February, followed by a 1.9% cut in January 2010, and for small companies with sales up to £25 ($37.5) million in 2007, the first £5 ($7.5) million sales will be exempt from the price cut. For the first time, the UK's Bioindustry Association (BIA) has been involved in PPRS negotiations, working closely with the Association of British Pharmaceutical Industry on aspects affecting small companies. As part of the agreement, companies that supply the NHS will be allowed to introduce drugs at lower initial prices with the option of negotiating higher prices at later stages if the clinical value of a product is proved. This flexible pricing scheme agreed upon in November will ensure patients have faster access to novel medicines, and encourage industry innovation. “This is a definite plus,” says Nick Scott-Ram, the BIA's strategy consultant on this issue. “The PPRS is now taking a more value-based approach to everything. We have come out of 18 months of negotiation in a reasonable position.”


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Aldridge, S. Value-driven price deal. Nat Biotechnol 27, 8 (2009).

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