Healthy Skepticism Library item: 12689

Warning: This library includes all items relevant to health product marketing that we are aware of regardless of quality. Often we do not agree with all or part of the contents.

Publication type: Journal Article

Claxton K, Briggs A, Buxton MJ, Culyer AJ, McCabe C, Walker S, Sculpher MJ.
Value based pricing for NHS drugs: an opportunity not to be missed?
BMJ 2008 Feb 2; 336:(7638):251
http://www.bmj.com/cgi/content/extract/336/7638/251?etoc

Abstract:

The policy debate about price, value, and innovation in pharmaceuticals is at a critical stage for the NHS. Claxton and colleagues describe the key principles of value based pricing and consider some of the concerns about such a scheme

Policy background
The NHS spends about £11bn (15bn, $22bn) annually on pharmaceuticals, of which £8bn is on branded drugs, representing about 13% and 10% respectively of available resources.1 As growth in NHS funding is expected to slow, access to innovative technologies will depend on savings found elsewhere. The UK Department of Health uses the pharmaceutical price regulation scheme to control expenditure on branded drugs. This 50 year old scheme is intended to control the profits companies can earn through periodic and general price cuts. A report by the Office of Fair Trading recommended reform, basing a drug’s price on its health benefits.1 2 The government has confirmed its intention to renegotiate the existing scheme,3 and a recent House of Commons Health Committee report has also welcomed reform.4 5 The policy debate about price, value, and innovation is at a critical stage for the NHS.