Freeze on drug prices will save NHS £1bn over next two years

Money-saving deal goes through despite opposition from pharmaceutical companies

Health Reporter

The NHS is set to save more than £1bn over the next two years thanks to a deal struck with drug companies to freeze the amount the health service spends on the most expensive drugs.

Branded medicines cost the health service £12bn last year and price rises have seen costs rise by five per cent annually, putting huge demands on stretched NHS budgets.

But under a new five-year deal, which has been staunchly opposed by some drug companies, NHS spending on patented medicines will remain flat for two years, followed by small increases of just under two per cent over the following three years – with drug companies paying back any costs above this level.

The Government hailed the deal as a “breakthrough” which would increase the availability of the best medicines without incurring out-of-control costs to the taxpayer.

But pharmaceutical companies said the move would scare away investment in British medicines research, leading to patients “missing out” on the latest treatments.

The deal, which was negotiated by the Department of Health on behalf of the national health services in England, Scotland, Wales and Northern Ireland, applies to branded medicines – those which are patented to one company and therefore usually the most expensive.

A Department of Health spokesperson said that all money paid back by drug companies would be divided between the four national health services. 

Popular drugs such as GlaxoSmithKline’s asthma treatments Ventolin and Seretide, and Roche’s cancer drug Mabthera, will be covered by the deal.

The agreement comes after many months of negotiating, described by the Association of the British Pharmaceutical Industry (ABPI) as the “most complex” ever held with the British government. It follows crackdowns in other countries on the spiralling costs of drugs, which governments fear are crippling recession-hit healthcare systems.

However, despite agreeing to the payment freeze, the ABPI said that negotiations had been “built on a myth that medicines are expensive in the UK”, arguing that prices were among the lowest in Europe.

The deal is voluntary and drug companies that do not sign up will be hit with a statutory 15 per cent price cut on their medicines. The statutory scheme will impact around 10 per cent of branded medicines used in the UK.

Drug company Pfizer claimed the deal was “damaging… for all those concerned, but most notably for UK patients.”

“This Government price cut alongside the on-going issues in assessing medicines for NHS use sends a clear message that innovation is not truly valued or supported. Whilst the UK Government wants new medicines to be researched and developed here, it is not prepared to pay for the life changing and life-saving medicines that result from this investment. In today’s competitive global economy such a stance sends the wrong signal for potential future decisions,” the company said in a statement.

The health secretary Jeremy Hunt said: “This agreement ensures NHS patients will receive the best and most advanced medicines in the world while managing the cost.

“UK pharmaceutical companies have responded to the challenges we face as a country, both in terms of the increased demand for medicines and pressure on public spending. I hope in return we have given them the certainty and backing they need to flourish as a sector both here and in the global market.”

Arts and Entertainment
Gregg Wallace in Summer's Supermarket Secrets
tv All of this year's 15 contestants have now been named
Arts and Entertainment
Inside the gallery at Frederick Bremer School in Walthamstow
tvSimon Usborne goes behind-the-scenes to watch the latest series
Life and Style
A picture taken on January 12, 2011 shows sex shops at the Paris district of Pigalle.
newsThe industry's trade body issued the moratorium on Friday
News
Winchester College Football (universally known as Winkies) is designed to make athletic skill all but irrelevant
Life...arcane public school games explained
PROMOTED VIDEO
Life and Style
ebooksA superb mix of recipes serving up the freshest of local produce in a delicious range of styles
Life and Style
ebooksFrom the lifespan of a slug to the distance to the Sun: answers to 500 questions from readers
Arts and Entertainment
Could we see Iain back in the Bake Off tent next week?
tv Contestant teased Newsnight viewers on potential reappearance
Life and Style
Silvia says of her famous creation: 'I never stopped wearing it. Because I like to wear things when they are off the radar'
fashionThe fashion house celebrated fifteen years of the punchy pouch with a weighty tome
News
i100(and it's got nothing to do with the Great British Bake Off)
News
Angelina Jolie with her father Jon Voight
peopleAsked whether he was upset not to be invited, he responded by saying he was busy with the Emmy Awards
News
Bill Kerr has died aged 92
peopleBill Kerr appeared in Hancock’s Half Hour and later worked alongside Spike Milligan and Peter Sellers
News
news It's not just the world that's a mess at the moment...
Sport
footballPremiership preview: All the talking points ahead of this weekend's matches
News
Keira Knightley poses topless for a special September The Photographer's issue of Interview Magazine, out now
people
Voices
The Ukip leader has consistently refused to be drawn on where he would mount an attempt to secure a parliamentary seat
voicesNigel Farage: Those who predicted we would lose momentum heading into the 2015 election are going to have to think again
Arts and Entertainment
Cara Delevingne made her acting debut in Anna Karenina in 2012
film Cara Delevingne 'in talks' to star in Zoolander sequel
News
i100
Sport
Mario Balotelli pictured in his Liverpool shirt for the first time
football
Life and Style
tech
Independent
Travel Shop
the manor
Up to 70% off luxury travel
on city breaks Find out more
santorini
Up to 70% off luxury travel
on chic beach resorts Find out more
sardina foodie
Up to 70% off luxury travel
on country retreats Find out more
Latest stories from i100
Have you tried new the Independent Digital Edition apps?

ES Rentals

    Independent Dating
    and  

    By clicking 'Search' you
    are agreeing to our
    Terms of Use.

    iJobs Job Widget
    iJobs General

    C# Algo-Developer (BDD/TDD, ASP.NET, JavaScript, RX)

    £45000 - £69999 per annum + Benefits + Bonus: Harrington Starr: C# Algo-Develo...

    Senior Data Scientist (Data Mining, Apache Mahout, Python,R,AI)

    £60000 - £70000 per annum + Benefits + Bonus: Harrington Starr: Senior Data Sc...

    Data Scientist (SQL,Data mining, data modelling, PHD, AI)

    £50000 - £80000 per annum + benefits+bonus+package: Harrington Starr: Data Sci...

    Java Developer - 1 year contract

    £350 - £400 Per Day: Clearwater People Solutions Ltd: Our client based in Cent...

    Day In a Page

    Ukraine crisis: The phoney war is over as Russian troops and armour pour across the border

    The phoney war is over

    Russian troops and armour pour into Ukraine
    Potatoes could be off the menu as crop pests threaten UK

    Potatoes could be off the menu as crop pests threaten UK

    The world’s entire food system is under attack - and Britain is most at risk, according to a new study
    Gangnam smile: why the Chinese are flocking to South Korea to buy a new face

    Gangnam smile: why the Chinese are flocking to South Korea to buy a new face

    Seoul's plastic surgery industry is booming thanks to the popularity of the K-Pop look
    From Mozart to Orson Welles: Creative geniuses who peaked too soon

    Creative geniuses who peaked too soon

    After the death of Sandy Wilson, 90, who wrote his only hit musical in his twenties, John Walsh wonders what it's like to peak too soon and go on to live a life more ordinary
    Caught in the crossfire of a cyber Cold War

    Caught in the crossfire of a cyber Cold War

    Fears are mounting that Vladimir Putin has instructed hackers to target banks like JP Morgan
    Salomé's feminine wiles have inspired writers, painters and musicians for 2,000 years

    Salomé: A head for seduction

    Salomé's feminine wiles have inspired writers, painters and musicians for 2,000 years. Now audiences can meet the Biblical femme fatale in two new stage and screen projects
    From Bram Stoker to Stanley Kubrick, the British Library's latest exhibition celebrates all things Gothic

    British Library celebrates all things Gothic

    Forthcoming exhibition Terror and Wonder: The Gothic Imagination will be the UK's largest ever celebration of Gothic literature
    The Hard Rock Café's owners are embroiled in a bitter legal dispute - but is the restaurant chain worth fighting for?

    Is the Hard Rock Café worth fighting for?

    The restaurant chain's owners are currently embroiled in a bitter legal dispute
    Caribbean cuisine is becoming increasingly popular in the UK ... and there's more to it than jerk chicken at carnival

    In search of Caribbean soul food

    Caribbean cuisine is becoming increasingly popular in the UK ... and there's more to it than jerk chicken at carnival
    11 best face powders

    11 best face powders

    Sweep away shiny skin with our pick of the best pressed and loose powder bases
    England vs Norway: Roy Hodgson's hands tied by exploding top flight

    Roy Hodgson's hands tied by exploding top flight

    Lack of Englishmen at leading Premier League clubs leaves manager hamstrung
    Angel Di Maria and Cristiano Ronaldo: A tale of two Manchester United No 7s

    Di Maria and Ronaldo: A tale of two Manchester United No 7s

    They both inherited the iconic shirt at Old Trafford, but the £59.7m new boy is joining a club in a very different state
    Israel-Gaza conflict: No victory for Israel despite weeks of death and devastation

    Robert Fisk: No victory for Israel despite weeks of devastation

    Palestinians have won: they are still in Gaza, and Hamas is still there
    Mary Beard writes character reference for Twitter troll who called her a 'slut'

    Unlikely friends: Mary Beard and the troll who called her a ‘filthy old slut’

    The Cambridge University classicist even wrote the student a character reference
    America’s new apartheid: Prosperous white districts are choosing to break away from black cities and go it alone

    America’s new apartheid

    Prosperous white districts are choosing to break away from black cities and go it alone