U.K. drug deal cuts prices 5%

You lose some, you win some. That's the upshot of the U.K.'s new pharmaceutical pricing agreement with drugmakers, announced late yesterday. Pharma will take a $985 million haircut from the deal, which reduces the National Health Service's spending on drugs by some 5 percent--and an additional 2 percent if the health service's bill grows by more than 6.7 percent a year.

That's the loss. The gain? The NHS says it will twist some arms at the regionally governed Primary Care Trusts, which have come under fire for refusing to fund groundbreaking--but expensive--treatments. Among the "incentives" will be newly public data showing which trusts are lagging on use of new meds, designed to shame them into faster uptake. "It has been a tough negotiation," Eddie Gray, GlaxoSmithKline's European pharma president told the Telegraph, "but we have managed to make sure that the future PPRS is more biased towards innovative products."

Meanwhile, health secretary Alan Johnson launched a four-month review of the "topping up" policy, which requires patients to pay for their entire healthcare bill if they pay for meds--such as pricey cancer treatments--not covered by the NHS. One likely outcome, experts say, is that patients may be allowed to buy those costly drugs as long as they pay for all associated costs, too.

- read the article in the Telegraph
- check out the Financial Times story
- see the FT's coverage on "topping up"