The deal agreed with the pharmaceutical companies is intended to help curb Britain's rapidly rising drugs bill - now almost pounds 7bn a year. But the limit on profits earned by the companies has been raised, as has the allowance for research on new drugs.
Frank Dobson, Secretary of State for Health, said: "This new agreement rewards innovation and research but keeps a tight rein on public expenditure. We wanted to have a new scheme which allows the research-based pharmaceutical sector to invest and flourish here in Britain."
The deal has been negotiated under the Pharmaceutical Price Regulation Scheme, a voluntary arrangement intended to protect the NHS from profiteering and give the drug companies a fair return on the costs of research and development. The overall effect is that the industry will be able to make higher profits but will have to work harder for them.Reuse content