• Stephen Whitehead

    Posted in category Opinion by Stephen Whitehead on 05/03/2013

    Helping the NHS to meet financial challenges – the role of the pharmaceutical industry

The NHS faces a significant challenge to achieve £20 billion in efficiency savings by 2015 – and it is recognised that financial pressures in healthcare are likely to continue well into the future. The report published today by The Nuffield Trust The anatomy of health spending 2011/12 highlights, once again, the difficulty in tackling these financial challenges.


There is not an infinite budget for the NHS to meet every need and it is accepted that spending needs to be kept under control. However, this must not be at the expense of the quality of services and outcomes achieved for patients.

The vital role that the pharmaceutical industry plays by improving the health and well-being of people in the UK through developing innovative medicines is often overlooked. Medicines have not been the significant driver of spending growth in NHS expenditure in recent years. Analysis published by the Office for Health Economics last year shows that expenditure on branded medicines as a percentage of total NHS expenditure will continue to fall from 7.8% per year in 2007 to an estimated 7.2% per year by 2015, through increased use of generic medicines. It is clear therefore, that the medicines bill is under control. 

Conversely, other areas of expenditure – energy costs, salaries and pensions, and costs of running the NHS estate, such as maintenance costs – have been significant drivers of increasing NHS expenditure over recent years. In addition, inefficiencies such as those resulting from procurement have driven up costs, particularly in the acute sector.

Given the financial environment which the NHS finds itself in, it is essential that all areas of health expenditure are scrutinised so that informed decisions can be taken about where efficiencies can be realised, particularly given that some savings may have a disproportionate and adverse impact on patient outcomes. However, if further cuts are focused on the medicines budget this is likely to lead to reduced patient access to treatments in the NHS and ultimately, poorer outcomes for patients.

Stephen Whitehead
ABPI Chief Executive

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