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UK spending on brand-name drugs predicted to reduce Posted 06/07/2012

Spending by the UK’s National Health Service (NHS) is under control according to a new report, and in fact spending on brand-name medicines is expected to reduce in real terms and as a proportion of the UK healthcare budget over the next three years.

The report was carried out by the Office of Health Economics, for the Association of the British Pharmaceutical Industry (ABPI). However, despite the good news for the generics industry, as this surely means more generics will be bought in place of brand-name medicines, the ABPI is concerned about how little the NHS is spending on the most innovative medicines and the slow speed at which patients can access new treatments compared to other European countries.

The research found that while the total amount spent on the NHS is set to rise by 2.5% per year between 2011 and 2015, spending on new brand-name medicines will rise by just 1.3% annually. The total amount spent on medicines annually will grow only slightly from 3.5% (2007–2011) to 3.7% per year up to 2015, most of which is attributed to increased spending on generics. Most worrying for the ABPI is that the figures also reveal that in three years’ time medicines launched between 2012–2015 will account for less than 2% of the NHS’s total spending on medicines.

Despite the gloomy outlook for the innovator industry in the UK, the NHS can look forward to savings totalling GBP 3.4 billion due to the expiry of patent exclusivity for brand-name medicines over the next three years.

According to Mr Stephen Whitehead, Chief Executive of the ABPI, branded UK prices are already amongst the lowest in Europe and the UK spends less than 1% of its Gross Domestic Product on medicines, which is almost half the average for other major pharmaceutical markets. Mr Whitehead, however, is ‘deeply concerned that these savings are not being reinvested back into the system’, which ‘spells bad news for the discovery of new life saving medicines and ultimately the health and well-being of UK patients.’

Mr Whitehead added that ‘we have to stop thinking of medicines as a cost and see them for what they are―an investment.’ He concluded by saying that ‘we need to see our medicines rewarded for the high risk and cost of research and development.’

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Source: ABPI

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