• Press Office

    Posted in category News Release by Press Office on 11/04/2006

    Medicines price down while UK remains at bottom of league on prescribing modern treatments. Manufacturing declines, trade balance shows downturn.

Prices of medicines are more than 21 per cent lower in real terms than they were 10 years ago while the percentage of its budget that the NHS spends on medicines has dropped to 11 per cent, new figures released today by the Association of the British Pharmaceutical Industry (ABPI) show.


​The figures also confirm that the UK spends less on medicines than most other European countries, with the annual cost of prescriptions written by British doctors averaging just £205 per person. This is despite the fact that the number of NHS prescriptions dispensed increased by 37 million last year to 826 million in total.

The balance of trade in pharmaceuticals - last year the highest of any sector in British industry - has shown a decline. Medicines earned a trade surplus for the UK of £3,424 million in 2005, a drop of eight per cent on the previous year, when the figure stood at £3,712 million.

"Our latest statistics show that there are some worrying signs over the health of the pharmaceutical industry in the UK," said Dr Richard Barker, Director General of the ABPI, introducing the publication of the industry's Annual Review.

"We are providing medicines at lower, relative cost than 10 years ago; they are a smaller percentage of NHS spend than for many years; and other European countries, by and large, spend more on medicines than we do. The public and politicians need to recognise the NHS is getting excellent value for money invested in UK medicines. However, we have serious concerns over the research and manufacturing base in the country, and our balance of trade - while still the envy of many other industries - is now showing a decrease."

At the end of his two-year presidency the outgoing ABPI President, Vincent Lawton, said: "If we wish to preserve the benefits brought by one of the country's most successful industries, it is vital that the Government ensures an attractive return for successful innovation, with its significant costs in terms of R&D, when deciding how much they are willing to pay for medicines. In a competitive global industry, the UK must remain an attractive and viable place for pharmaceutical companies to invest.

"With around 40 per cent of new medicines introduced in the past ten years supporting the Department of Health's priority areas of cancer, coronary heart disease, mental health and diseases of the elderly, the pharmaceutical industry is making a major contribution to improving the health of the nation and the productivity of the NHS. As medicines usage helps reduce the need for hospital stays and, as the average prescription costs less than £11 and a day in hospital costs around £200, they are helping save taxpayers money while enabling patients to stay at home longer."

The ABPI's Annual Review says that competition for the location of pharmaceutical manufacturing has grown ever fiercer with more and more countries developing the necessary technical infrastructure needed to take on this work. It is likely that the UK pharmaceutical manufacturing base will decline as older medicines lose their patent status and manufacturing is moved overseas. If the UK cannot attract new manufacturing investment for new products, output will decline, leading to the erosion of the balance of trade for medicines.

Pharmaceutical companies carry out around a quarter of all business research and development in the UK, and a full third of their UK sales are reinvested in UK R&D - an astonishing ratio. This investment directly employs 73,000 people and indirectly creates employment for a further 250,000 people. It has also resulted in the UK being responsible for around one in five of the world's top 100 medicines - more than any country except the USA and as many as the rest of Europe combined.

Dr Barker added: "The stability afforded by the Pharmaceutical Price Regulation Scheme (PPRS) has been one of the key elements underpinning the success of pharmaceutical research in the UK and retaining investment. Although a new scheme introduced at the beginning of 2005 delivered substantial reductions in the medicines bill, before the end of the year, the industry was facing an Office of Fair Trading probe into the PPRS, which is ongoing. Although no pricing scheme is perfect, the PPRS provides a more stable environment than any other in the EU."

The review also highlights a number of other key industry issues:

Working with the NHS

There is increasing evidence that even after medicines have been approved by the regulatory authorities and even recommended for NHS use under the various national assessment systems (eg, NICE) that some local health authorities are failing to make them available for patients. The ABPI has been working with NICE and the Healthcare Commission to help ensure that all patients get fair access to the best healthcare.

Fostering innovation

A joint pharmaceutical industry-Government working group called the Long-term Leadership Strategy (LTLS) has been set up to help maintain the UK's leadership position in innovative medicines. One focus of the strategy is increasing partnership between industry and the NHS on the uptake of innovation, as well as improving the regulatory system for all stakeholders.

Enabling patients

The ABPI has helped give patients the tools they need to make informed choices about their treatment and to participate in clinical research. The ABPI has strongly supported the international clinical trials portal launched in 2005 at www.ifpma.org/clinicaltrials - this includes ongoing and completed trials across the globe. The ABPI is working in partnership with CancerBACUP and Ask About Medicines to deliver a cancer information campaign and the popular series of Target booklets with information about medicines and research now covers breast cancer and diabetes.

Upholding professional standards

Major changes to the ABPI Code of Practice were introduced in January 2006 following a comprehensive review. The robust and rigorous new code ensures that the UK pharmaceutical industry remains transparent and responsible. A particular focus of the new code is enhancing patient safety via the fullest reporting of adverse events.

New medicines

A steady stream of innovative medicines from the laboratories of ABPI member companies is constantly adding to the treatments available for patients across the world. This year saw new treatments for conditions including bowel cancer, HIV, arthritis, high blood cholesterol and Parkinson's disease. Potential new treatments in the final stages of trials include those for cancer, stroke, Crohn's disease, rheumatoid arthritis, psoriasis, HIV/AIDS, irritable bowel syndrome, schizophrenia, insomnia, fertility and drug addiction.

For further information, please contact: ABPI Press office: 020 7747 1410  

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