Implications for pharma under new UK law
to control generic drug prices

A new UK regulation announced on 27 April 2017 attempts to clarify and extend the UK Government’s powers in regulating the cost of medical supplies and drugs, and to gather pricing information from pharma. The new generic pharma law was introduced rather hastily before the last election amid some controversy at the apparent undue speed with which it was rushed through Parliament.

The aims of the Act
1. The Act will allow the government to bring into play price regulation for branded medicines that is more into line with the Pharmaceutical Price Regulation Scheme (PPRS). This should place branded medicines on a more level playing field with generics as regards pricing.
2. Controversially, the Act will enable the government to control price increases in unbranded generic products.
3. The Act will create a comprehensive statute to require sales and distribution information from manufacturers, suppliers, and distributors.

The implications of the Act
Although the precise detail on how the government plans to exercise these new powers under the Act is somewhat sketchy and subject to discussion, it is clear that this short new Act will potentially introduce significant change. One key area of interest is how the balance between the voluntary and statutory pricing schemes for branded medicines might evolve in the future. In addition, many industry eyes will be on what approach the government intends to take in order to control excessive generic pricing. In particular, pharma will want to see how unfair or excessive pricing will be identified.

The information requirements referred to under the new Act are also very important. One MP reportedly commented during the passage of the Bill that the importance of having more viable, consistent and useful information could not be underestimated, as information is power.

It is now crucial that life sciences engage fully in discussions during the consultations that will take place shortly on the new drug pricing legislation regulations. These regulations will to a large extent govern that power in making sure that legislators and the government fully understand their legitimate needs on pricing.

 

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