Complete Guide to the 2009 PPRS, NICE and other Pharmaceutical Cost Containment Measures in the United Kingdom

Complete Guide to the 2009 PPRS, NICE and other Pharmaceutical Cost Containment Measures in the United Kingdom
Executive Summary

Introduction

1. Health Service

1.1 Organisation of the NHS

1.1.1 NHS England

1.1.2 NHS Scotland

1.1.3 NHS Wales

1.1.4 NHS Northern Ireland

1.2 Financial Flows

1.2.1 Primary Care Prescribing in England

1.2.2 Secondary Care Prescribing in England

1.2.3 Other Countries

1.3 Outcomes

2. Pharmaceutical Market

2.1 Overall Costs

2.1.1 England

2.1.2 Scotland

2.1.3 GP Prescribing Costs

2.1.4 Hospital Prescribing Costs

2.2 Players

2.2.1 Manufacturers

2.2.2 Wholesalers

2.2.3 Community Pharmacies

2.2.4 Hospital Pharmacies

2.2.5 Dispensing Doctors

3. Health Technology Assessment

3.1 England

3.1.1 Topic Selection

3.1.2 Technology Appraisal Process

3.1.3 Clinical Guidelines

3.1.4 Manufacturer Submission

3.1.5 Appraisal Outcome

3.1.6 Appeals

3.1.7 Uptake of Recommendations

3.1.8 Consultancy Services

3.1.9 End-of-Life Treatments

3.1.10 Further Reforms

3.2 Scotland

3.3 Wales

3.4 Northern Ireland

4. Principles, Evolution and Contents of the PPRS

4.1 Historical Development

4.2 Parties to the PPRS

4.3 Eligibility for Membership

4.4 Objectives

4.5 Principles

4.6 Launch Pricing

4.7 Profit Assessment

4.7.1 Annual Financial Return

4.7.2 Return on Capital

4.7.3 Return on Sales

4.7.4 Outcome

4.8 Transfer Prices

4.9 Costs and Allowances

4.10 Price Reductions

4.11 Price Increases

4.12 Products Sold On

4.13 Appeals

4.14 Compatibility with European Law

5. Critique of the PPRS

5.1 Office of Fair Trading Review

5.2 Strengths and Weaknesses

5.2.1 Advantages

5.2.2 Drawbacks

5.3 Reports to Parliament on PPRS

5.4 GSK vs Department of Health at High Court

6. Transition to 2009 PPRS

6.1 Negotiation Principles

6.2 Industry's Starting Position and Strategy

6.3 Steps to Negotiate the 2009 PPRS

6.4 Reaction

6.4.1 Manufacturers

6.4.2 Wholesalers

7. Novel Features of the 2009 PPRS

7.1 Central Role of NICE

7.2 Unified Horizon Scanning Process

7.3 Flexible Pricing

7.4 Patient Access Schemes

7.5 Prescribing Incentives

7.6 Greater Attention to Prices in the Hospital Sector

7.7 Generic Substitution

7.8 Statutory Price Control

7.9 Wholesale Margin

4. Other Types of Product

8.1 Generics

8.1.1 Generic Prescribing

8.1.2 Generic Reimbursement

8.1.3 Branded Generics

8.2 Parallel Imports

8.2.1 PL(PI) Scheme

8.2.2 Savings

8.2.3 PIs and the PPRS

8.3 OTC Medicines

9. Other Cost Containment Measures

9.1 Supply-side Controls: Impact on the Distribution Chain

9.1.1 Payment to Wholesalers

9.1.2 Payment to Pharmacies

9.1.2.1 Remuneration

9.1.2.2 Reimbursement

9.1.3 Payment to Dispensing Doctors

9.2 Value-added Tax

9.3 Demand-side Controls: Impact on Prescribers and Patients

9.3.1 Prescribing Controls

9.3.2 Prescribing Advice

9.3.3 Incentives for Precribing Savings

9.3.4 Patient Co-payment

9.3.5 Top-up Payments

List of tables

2.1 Estimated cost of prescribing by English SHA

2.2 Annual change in cost of prescribing by GPs vs hospital doctors

2.3 Expenditure on types of medicines by country in primary care

2.4 Expenditure on types of medicine by country in secondary care

2.5 Share of distribution to community pharmacies

2.6 Principal pharmacy chains

3.1 Comparison of NICE's MTA and STA processes

3.2 Technology not recommended for use by NICE

3.3 NICE's decisions and cost per QALY

4.1 ABC Pharmaceutical Co: Assessment of profit under PPRS

4.2 Examples of costs and activities that qualify for PPRS allowances

4.3 Number and value of price increases under PPRS

6.1 Bilateral comparison of ex-manufacturer prices, 1995-2006

6.2 Negotiation/implementation timetable for 2009 PPRS

7.1 Examples of patient access schemes in UK

7.2 Direct-to-pharmacy distribution schemes in UK

7.3 Restricted wholesaler schemes in UK

8.1 Generic prescribing & dispensing by Rx items, England, 1996-2007

8.2 Generic prescribing & dispensing by NIC, England, 1996-2007

8.3 Evolution of parallel import penetration, 1998-2008

8.4 Impact of price modulation in 2005 PPRS on PI penetration

9.1 Typical wholesaler discount structure to independent pharmacies

9.2 Fees for dispensing doctors

References

Glossary of Acronyms and Abbreviations

Appendix 1: Comparison of the four most recent PPRS agreements

Appendix 2: Responsibilities and contact details of Department of Health's PPRS staff