UPDATE 1-UK government secures 3.9 pct cut in drug prices

* Finalises pricing scheme to cut costs by initial 3.9 pct

* Includes flexible pricing scheme for drug companies

* Promotes prescription of generic drugs

* Will see price reductions delayed

(Adds details, background)

LONDON, Nov 19 (Reuters) - The UK has finalised a new drug pricing scheme that it says will cut costs to government while increasing the availability of medicines to patients.

The government said in June that it had secured the outline of a deal with the pharmaceutical industry, and it has now finalised the details.

The deal has been welcomed by the pharmaceutical industry as being simpler than the earlier proposals, and will mean that prices paid by the UK's state health service are cut by 3.9 percent from February next year, and by 1.9 percent more in January 2010.

Previously prices were to be cut by 5 percent in January; the new deal staggers and delays the price cuts.

The new deal reflects government determination to ensure better value for money and comes as part of a worldwide drive to rein in healthcare costs.

It is expected to deliver savings of around 350 million pounds ($527.3 million) in 2009/10, and around 550 million per year thereafter.

Since the earlier announcement, a flexible element has been added which will allow drug companies to supply drugs to the NHS at lower initial prices, with the option of higher charges if they prove to be of additional benefit to patients.

The new deal is also set to boost the number of generic drugs sold, as it will allow a pharmacist to sell a generic version of a drug if it is available, even if the doctor has prescribed the branded version.

Despite making up less than 3-4 percent of the world drugs market, Britain accounts for 9 percent of worldwide R&D into new drugs -- a testament to its reputation as an attractive location for research and other operations.

Britain is home to two of the world's leading drugmakers, GlaxoSmithKline (GSK.L) and AstraZeneca (AZN.L), although both make far more money in the United States than from domestic sales.

(Reporting by Ben Deighton; Editing by Rupert Winchester)