Britain has agreed the outlines of a deal with drug companies that will cut the cost of medicines sold to the state-owned National Health Service (NHS) by five percent. The government and pharmaceutical industry said on Wednesday they had also agreed a further price cut of 2 percent if the drugs bill exceeds an agreed threshold. Last year, the Department of Health stunned industry by announcing plans to renegotiate the Pharmaceutical Price Regulation Scheme (PPRS), even though the latest 5-year deal still had 2-1/2 years to run. The move sparked fears the government was going to demand fresh price cuts on top of a 7 percent cut agreed in 2005 and caused some global drug companies to question their investment in Britain. The new deal includes a price cut of 2 percent for all branded medicines combined with measures to reduce the price of out-of-patent drugs, where a generic equivalent exists. The measures will apply from January 2009. The two sides also agreed action to support innovation so that patients have faster access to new medicines that are clinically and cost-effective, confirming what sources close to the matter said on Tuesday.
