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Dept of Health

Answer

Ms Oona King: To ask the Secretary of State for Health what measures are being taken to ensure that the NHS is able to purchase drugs at the cheapest possible rate. [95163] Mr. Hutton: We have a number of measures in place to help ensure that the National Health Service purchases medicines on reasonable terms. The Pharmaceutical Price Regulation Scheme (PPRS) secures the provision of branded medicines at fair prices to the NHS that also reflect the cost of researching and developing these medicines. We have recently negotiated a new PPRS which came into effect on 1 October. This includes a reduction of 4.5 per cent. in list prices of branded medicines, which will save the NHS over £150 million a year. Prices for generic medicines, which are outside the PPRS, are determined by competition in the market. In the past this market has delivered generic medicines at reasonable prices and ensured continuity of supply. Prices, however, have risen sharply this year due at least in part to supply problems. We are concerned that the scale of the rises may be unjustified and are examining every possible option to see how a more normal market situation can be restored. Hospitals buy many medicines by competitive tender, often pooling their purchasing power through the NHS Supplies Authority and may utilise formularies to make choices between medicines of similar properties but differing prices. The arrangements for reimbursing community pharmacies and dispensing doctors for the cost of the medicines they supply contain incentives which encourage them to shop around for the lowest prices, while ensuring that much of the discount which they receive is clawed back. In 1998-99 a total of £400 million was saved in this way.

Secondary information

Type

Written question

Reference

337 c304W; 95163

Session

1998-99

Subjects

Drugs NHS Prescription drugs Prices

Contains statistics

Yes