Makers of branded drugs have been fighting a rising tide of price pressure in the U.K. and Europe, where protectors of government health plans have been making it hard to get new drugs approved. But the U.K. is the latest to start looking to tamp down prices on already-approved drugs as it tries to take control of what it sees as runaway healthcare costs.
The country is looking to cut some drug prices by as much as 20% as it tries to save £11.5 billion ($18 billion) in the 2015-16 spending year, Bloomberg reports. It is negotiating with the industry to cut prices of branded drugs that are not already covered by price controls under its Pharmaceutical Price Regulation Scheme, or PPRS, the department said today in a statement on its website. That covers about 10% of the drugs that the National Health Service pays for, Bloomberg reported. The country is already working to revise the way it evaluates prices for drugs covered by the PPRS.
"We cannot simply spend more and more on drugs," said Frederick Curzon, the Department of Health's Under Secretary of State. But the industry argues that prices of new drugs in the U.K. are already among the lowest in Europe. The Association of the British Pharmaceutical Industry claims prices of branded drugs are set to fall further by 2015 as a percent of the health budget.
One motivation for the move may be tied to issues uncovered by The Telegraph, which reports that drug reps are able to artificially inflate the costs of many of the drugs that fall outside the PPRS. But the U.K. is not the only country in that part of the world looking at backtracking on approved prices. Germany is evaluating 10 drugs in 6 treatment areas for price rollbacks. They include such popular treatments as Boehringer Ingelheim's bloodthinner Pradaxa, the osteoporosis drug Prolia from Amgen ($AMGN) and Novo Nordisk's ($NVO) diabetes drug Victoza. Germany's drug-pricing agency is perhaps the most despised in Europe for the stands it has taken against new treatments. Just this week it told Sanofi ($SNY) that its new diabetes Lyxumia delivers "no additional benefit" compared with existing drugs.