Pricing & Reimbursement of Medicines in the United Kingdom

Published by: Urch Publishing

Published: Jun. 1, 2005 - 73 Pages

Table of Contents

Summary

Healthcare System Structure

The NHS

The NHS in England

Primary Care in England

PCT Prescribing Budgets: ‘The Drugs Bill’

Local Pharmaceutical Services (LPS) in England

Secondary Care (Hospitals) in the UK

The NHS in Scotland

The NHS in Wales

LHBs

The NHS in Northern Ireland

Classification and Supply of Medicines in the UK

Nurse Prescribers in the UK

Pharmacist Prescribers (Supplementary Prescribing) in the UK

The Pharmaceutical Market?

Data for England

Data for England and Wales

Data for Wales

Data for Scotland

Data for Northern Ireland

Pharmaceuticals and Tax

The Pharmaceutical Price Regulation Scheme (PPRS)

Annual Financial Returns (AFRs)

Allocation of Costs and Capital

Limitation of Costs and Assets

Company Profit Cap

R&D Allowance

Marketing Allowance

Information Allowance

New Product Pricing

Products Sold On

Transfer Prices

Other Provisions

Arbitration

Prices Changes for Pharmaceuticals

Pharmaceutical Reimbursement

Dispensing Doctors

Personal Administration GP Claims

Local Supply or National FP10 Routes

Prescribing Information

The PSNC

Contractors in Scotland

Hospital Sales

OTC Price Regulation

Abolition of Resale Price Maintenance (RPM) in May 2001

Size of the UK OTC Medicines Market

Restrictions Removed on Advertising OTC Products

Reclassification (Switching)

Online Directory of OTC Products

Control of Pharmaceutical Expenditure

The PCA System

The Indicative Prescribing Scheme (IPS)

Economic Evaluation

The NICE

The HTBS

The SMC

Recent NICE Guidance and Decisions

Recent NICE Citizens Council Report

The Limited List (‘Blacklisted’ Products), and ‘The Grey List’

Patient Co-Payment

What is the Effect of Generic Drugs?

The Drug Tariff

Maximum Price Scheme and Generics

Future Transfer of ‘Standard’ Branded Generics to the New Payment Arrangements for Generic Medicines

NHS Legal Action Against Anti-Competitive Price-Fixing

Pharmaceutical Wholesaling

Wholesale Margins

Pharmacy Finance and Margins

Control of Entry Restrictions Revised

New Community Pharmacy Contract

Payments for PCTs

Formula for Future Years

Funding for the New Essential Services

Global Sum Payments

Practice Payments

Protected Payments

Practice Payments

Exit Payments

LPS

ESPS Pharmacies

Impact of Parallel Imports

Future Developments

A UK General Election in 2005: Re-Election of the Labour Government, and a Subsequent Decrease in the Share of the NHS Budget for Medicines

The UK Government Cabinet Office May Review The NHS Drug Tariff, NHS Medicine Procurement, Generic Medicine Substitution, and the Control of Entry Regulations, in 2005

Primary Care Trusts (PCTs) in England Will Receive £135bn in 2006/07 and 2007/08

Increased Involvement of the European Commission and the European Parliament in the Pharmaceutical Industry and Healthcare Policy; and the Introduction of a Possible Single European Price

The Possibility of the EU Allowing Pharmaceutical Companies to Set Prices for Medicines Ineligible for Government-Controlled Pricing and Reimbursement

The Impact of the Accession of 10 New EU Member States in May 2004; Further Cost Containment: Cheaper Branded and Generic Drugs, and More Parallel Imports

GlaxoSmithKline (GSK) Will Increase the Cost to Pharmacies of its Best-Selling Medicines from 1 April 2005, by Removing the 12% Discount it Gives on Drugs Where it Still Holds a Patent

Pricing Reforms for Reimbursed Generic Medicines: Simplification of Drug Tariff Rules

More POM to OTC P Medicine, and OTC P to OTC GSL Reclassifications (‘Switches’)

More Prescribing by Nurse Prescribers and Supplementary Pharmacist Prescribers

The New Community Pharmacy Contract Effective From April 2005

Electronic Transmission of Prescriptions (ETP) will Begin in Early 2005

Merger of the PPA into a new NHS Business Services Authority in October 2005

The Application of VAT to Personally Administered Drugs and Appliances (in the Course of Treatment) is currently Under Appeal

Useful Contacts

Abbreviations used

About Urch Publishing

List of Figures

Figure 1 PPA System for Calculation of Reimbursements and Remuneration to Dispensers of Drugs in England

Figure 2 Reimbursement of Items on an FP10 Prescription Form

List of Tables

Table 1 NHS Expenditure on Medicines per Person in the UK

Table 2 Definitions of Prescribing Costs

Table 3 PPA Payments to Contractors

Table 4 Example of Timing of Reimbursement by PPA to Pharmacists

Table 5 The UK Drug Tariff for Generic Medicines

Table 6 Funding for the New Community Pharmacy Contract in England for 2005/6

Table 7 Funding for the New Community Pharmacy Contract in England 2005/6

Table 8 Annual Establishment Payments to Contractors in the Community Pharmacy Contract for 2005/06

Table 9 Practice Payments to Pharmacies Dispensing at Least 1,100 Items per Month in the Community Pharmacy Contract for 2005/06

Table 10 Summary of Pharmaceutical Cost-Containment Measures in the UK

Abstract

National pharmaceutical pricing and reimbursement is a complex and ever-changing area. In a rapidly evolving market it is essential that executives are briefed on the regulatory systems that determine the way in which your company operates and sells its products.

The Pricing & Reimbursement of Medicines in the United Kingdom - Understanding the pharmaceutical market in the healthcare system is a straightforward guide to the pricing and reimbursement mechanisms in the UK market, in particular the Pharmaceutical Price Regulation Scheme (PPRS) that came into force in January 2005.

The 70 page report clearly explains the structure of the healthcare system and the regulations and arrangements in place that provide the framework for setting medicine prices and gaining reimbursement through the state financed national health service (NHS). Attention is paid to the mechanisms that restrict spend on pharmaceuticals, including the role of the National Institute for Clinical Evidence (NICE) in England and its equivalent in Scotland. Finally, key current or forthcoming events that may affect the environment are identified and explained. Latest market figures are provided where possible.

As the National Health Service (NHS) reimburses the majority of drugs sold in the UK, the UK has developed an unusual system of controlling pharmaceutical companies' profits through a 'voluntary' agreement, known as the PPRS, between the Government and the Association of the British Pharmaceutical Industry (ABPI). Although some patients pay a small co-payment, the health service is free at the point of contact and most patients are protected from the true cost of medicines. However, a series of cost-control measures on the demand side, including the use of government bodies (The National Institute of Clinical Excellence, NICE; and the Health Technology Board for Scotland, HTBS), to assess clinical-effectiveness and cost-effectiveness, makes the UK one of the most controlled environments in Europe.

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