UK SHOULD REFORM DRUG PRICING SCHEME TO FOCUS ON VALUE, BENEFITS, REPORT SAYS

The UK's National Health Service's (NHS) drug price regulation scheme should be changed to a value-based system that focuses more on patients and providing better benefits, an Office of Fair Trading (OFT) report recommended.

The NHS' Pharmaceutical Price Regulation Scheme does not deliver the best value from its drug spending, the report said. The scheme spends approximately $15.6 billion a year on branded pharmaceutical medications, ignoring generic alternatives for common illnesses such as high cholesterol, high blood pressure and acid reflux disease, according to the report.

Some drugs purchased in large quantities are up to 10 times more expensive than equally effective generic alternatives, the OFT said. The current scheme allows companies to determine their own prices within broad profit constraints and works on profit and price controls. However, these caps have little effect on company behavior, the OFT said.

The NHS should transfer to a different scheme in which benefits to the patient determine the prices paid for medications, the report said. This value-based pricing would also encourage companies to develop drugs for medical conditions that have the most need, the OFT added.

Switching schemes could save the NHS approximately $975.2 million a year, which it could use more effectively by providing patients with better access to medications, the report said.