LONDON Aug 3 The British government and the
pharmaceutical industry will start negotiations next month on a
new framework for pricing drugs that is due to take effect from
2014, the two sides said on Friday.
Health minister Andrew Lansley has championed a shift to
"value-based pricing", raising concerns among drug companies
that the government will end up setting prices for medicines
based on a rigid assessment system.
The industry fears that may not reward incremental
innovations, stifling the uptake of new drugs.
The changes, however, will be evolutionary rather than
revolutionary in nature, according to a joint statement from the
Department of Health and the Association of the British
Pharmaceutical Industry, outlining their plans for the talks.
The new value-based pricing arrangements will focus
primarily on new drugs placed on the market from January 2014
and the great majority of existing treatments will continue to
be handled under existing arrangements.
The 50-year-old Pharmaceutical Price Regulation Scheme,
which is renegotiated every five years, gives companies freedom
to set prices for medicines within an overall profit cap. It
will remain in force for older drugs alongside the new system.
Drug companies face growing pricing pressure from
governments across Europe as austerity triggers budget cuts
designed to rein in rising costs, and the issue took its toll on
profits in recent quarterly results.
Britain - home to two major drugmakers in GlaxoSmithKline
and AstraZeneca plus international players like
Pfizer - has seen significant drug industry job cuts in
recent years as companies struggle with global patent expiries
and squeezed prices.