New NHS drug pricing deal agreed with pharmaceutical firms

The government and the pharmaceutical industry have agreed a new five-year multi-billion-pound drug pricing deal for the NHS.

Under the new agreement, a fixed limit on NHS spending on branded medicines has been introduced for the first time ever, with all additional expenditure above this level paid for by the industry.

NHS outlay on branded medicines – which came to more than 12 billion pounds in 2011/12 – will remain flat for two years, followed by small increases of less than two percent in the following three years, less than the average growth of five percent in previous years.

This deal will prove important as demand for medication from NHS patients rises in the coming years due to the rising average age of the population.

Health secretary Jeremy Hunt said: "This agreement ensures NHS patients will receive the best and most advanced medicines in the world, while managing the cost."

Association of the British Pharmaceutical Industry chief executive Stephen Whitehead also welcomed the deal, while calling on the government to ensure it does more to make any new arrangements attractive to smaller companies.