Impact assessment

Impact Assessment For The Continuation Of A Statutory Scheme To Control The Prices Of Branded Medicines In The NHS

This publication was published under the 2005 to 2010 Labour government

A regulatory impact assessment for the continuation of a statutory scheme to control the prices of branded medicines in the NHS.

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The NHS spends approximately £9 billion a year on branded prescription medicines. The Pharmaceutical Price Regulation Scheme (PPRS) controls their prices by regulating the profits that companies can make on these sales. It is not a conventional market with a single purchaser (the government) and manufacturers, which hold patents that provide temporary monopolies over supply of their products. A new PPRS was implemented from 1st January 2009, including, amongst other things, provision for a second cut in the price of branded medicines from 1st January 2010. In the absence of statutory fall-back measures, companies could avoid that price cut by choosing not to join the voluntary scheme.