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Pharmaceutical Price Regulation Scheme PPRS Payment for 2016

I am announcing today the level of payment due from members of the Pharmaceutical Price Regulation Scheme (PPRS) in 2016 to keep health service spend on branded medicines within the levels agreed under the Scheme. The PPRS payment percentage for 2016 will be 7.80%.

The PPRS allows patients access to the medicines they need while maintaining affordability for the NHS and providing stability for industry in support of the Government’s innovation and growth agenda. There is an agreed, fixed limit on the majority of NHS spend on branded medicines with additional expenditure above this level paid for by the pharmaceutical companies. The agreed growth limit in both 2014 and 2015 was 0%. Annual growth will be limited to 1.8% in 2016, 1.8% in 2017 and 1.9% in 2018. Small companies with less than £5 million of sales a year to the health service are exempted.

The Government welcomes the pharmaceutical industry's agreement to increase its payments to the Department of Health in 2016 compared to the amount agreed in the amendment to the Pharmaceutical Price Regulation Scheme (PPRS) published in August 2015. This supports the Government’s NHS funding commitment made at the Spending Review to deliver the Five Year Forward View. This represents a payment of monies that would have been due in 2017 and 2018 under the PPRS and will support industry and government efforts to improve patient access to new clinically and cost-effective medicines.

The Department has published a document setting out further details entitled “Pharmaceutical Price Regulation Scheme 2014: revised forecasts and profile of payment percentages at December 2015”. A copy is attached.