Pharmaceutical groups defend record on drug prices for NHS

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The Independent Online

The pharmaceutical industry moved to defend the cost of drugs yesterday by saying prices had come down by 21 per cent in real terms (adjusted for inflation) over the past decade.

The industry has repeatedly come under attack for producing what are generally perceived as expensive medicines.

The percentage of the budget that the National Health Service spends on medicines has dropped to 11 per cent over the same period, according to the Association of the British Pharmaceutical Industry. The figures also confirm that the UK spends less on medicines than most other European countries, with the annual cost of prescriptions written by British doctors averaging just £205 per person. This is despite a rise in the number of NHS prescriptions dispensed by 37 million to 826 million last year.

At the same time, the ABPI voiced concerns over the health of the British pharmaceutical industry. Richard Barker, the director general, said the balance of trade in drugs - last year the highest of any sector in British industry - had shown a decline. Medicines brought in a trade surplus for the UK of £3.4bn last year, a drop of 8 per cent from the year before. Mr Barker said: "The deterioration in the trade surplus heralds the beginning of a reduction in the manufacturing base in the UK ... We're beginning to see the decline we had forecast in the net balance of trade. We need to consider carefully with the Government what can be done to strengthen the industry."

Mr Barker said new spending on research and development was going into other parts of the world, notably India and China where companies face a lower cost base. He said the UK must simplify the process of clinical trials to keep its edge. In addition, he is lobbying the Government to devise a special tax treatment for certain high-value manufacturers, to stop them moving to places such as Singapore.

He also called for the Pharmaceutical Price Regulation Scheme to be kept in place, a scheme that is being investigated by the Office of Fair Trading.