Holding answer received on 03 November 2014
The 2014 Pharmaceutical Price Regulation Scheme (PPRS) supports the National Health Service to improve patient access to clinically and cost effective medicines in a number of ways:
- by making medicines more affordable. The PPRS limits growth in the vast majority of spend on branded medicines with industry making payments for spend above the agreed limit;
- by providing stability and predictability to the Government and the pharmaceutical industry thereby promoting a strong and profitable pharmaceutical industry which encourages innovation and the development of high value treatments; and
- by a number of agreed measure to improve access to branded medicines commensurate with the outcomes they offer patients.
Sales of new products are exempt from PPRS payments though still included in the overall limit on growth and the payments made by industry as a whole. This creates a strong in-built incentive in the scheme for companies to innovate.
In respect of England, the anticipated PPRS payments for 2014-15 were passed on to NHS England through the Mandate and as such were included within commissioner allocations. In addition, an indicative budget for NHS England for 2015-16 was set on the basis of, amongst other things, the PPRS payment forecast available in 2014.
In accordance with normal Government accounting rules and the agreed PPRS, there is no separately identified or ring-fenced funding stream associated with PPRS payments. Nevertheless, the Government can provide an assurance that all PPRS payments received for England will be used for spending on improving patients’ health and care. As part of this, following discussion with the Department, NHS England and the Association of the British Pharmaceutical Industry are now pressing ahead with plans to improve access to and optimise the use of medicines to improve patient outcomes.
More generally, the Government’s Strategy for UK Life Sciences sets out an ambitious long-term programme of action to improve the wider environment for pharmaceutical innovation and make the United Kingdom a world-leading place for life sciences investment. The Strategy has delivered £2 billion in industry and private sector investment in the United Kingdom since it was launched in December 2011.