Small cut in drug prices brings relief to industry
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.THE UK drugs industry breathed a sigh of relief yesterday after the Department of Health proposed a 2.5 per cent cut in the cost of all prescribed pharmaceutical products for three years from 1 October. Analysts had feared it might insist on cuts of up to 6 per cent.
However, the blanket 'voluntary' price cut is to be in addition to an extension of the 'limited list'. This is a group of 10 categories of drugs where the Government may blacklist products if their price is not cut substantially.
Yesterday's changes were part of a new five-year agreement for the Pharmaceutical Price Regulation Scheme, and designed to help the National Health Service cut its pounds 3bn drugs bill.
The proposals envisage cuts in the size of the additional profits that companies earn as a result of improved efficiency. And they set stricter guidelines for firms seeking approval for price increases for products already on the market.
But there is no change to the overall level of return on capital, and companies will also retain freedom of pricing for new products.
Mark Clark, pharmaceuticals analyst at Nomura, predicted it would mean a 1 per cent reduction in the total profits of the big drug manufacturers. Glaxo, which has the largest exposure to the UK market with 11 per cent of drugs sales, said it would agree to changes because it understood the Government's budgetary dilemma. Other companies are expected to fall into line. Glaxo shares rose 7p to 524p, while Wellcome lifted 5p to 659p.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments