Recently Jonathan Emms wrote a thoughtful piece in the Sunday Telegraph. He spelt out the benefit that modern medicines can bring, providing new ways of treating terrible illnesses, adding quantity and quality of live for millions of patients. Yet this potential will only be realised if new medicines are developed and then used.


A discovery confined to a laboratory or a medicine left on a shelf are equally meaningless to patients. We need to translate discoveries into proven treatments and then use them. And to do this, we need to be prepared to pay a price which recognises and rewards the investment which goes into clinical development.

Last week, I wrote about the impact of short term cuts in NHS expenditure on rationing medicines and treatment. Medicines are an easy target for savings and have already been subject to significant further cuts. A major part of the QIPP programme has focused on delivering efficiency savings in medicines procurement and the Department of Health estimates that £417 million of efficiency savings on medicines were achieved in 2011-121, and a further £472 million will be achieved in 2012-132.   

That medicines are an easy target does not make them the right target. Nor are cuts in the price paid for medicines a consequence-free action. If you cut too far you damage the availability not only of future generations of medicines, but of those of today too. We don’t have to look far to see the impact this can have. In Germany the impact of cuts is already being felt. The Act for Restructuring the Pharmaceutical Market in Statutory Health Insurance (AMNOG) has seen the imposition of a new set of price controls, based on inappropriate older comparators medicines. This has forced prices towards generic levels. There is no longer fair reward for medical progress and it is patients who are being hurt.

The absence of a fair price, with all its implications for global pricing, has meant that companies are withdrawing medicines or taking difficult decisions to not launch new products. Patients in Germany are therefore being denied access to latest treatments across a range of conditions, from diabetes, to epilepsy to high blood pressure. 

Medicines prices in the UK are already among the lowest in Europe3. Total medicines costs in the UK represent 0.9% of GDP per annum compared to a 1.7% average for comparable major European countries4. The evidence from Germany suggests that we cannot afford to cut further.

Stephen Whitehead
ABPI Chief Executive



  1. Department of Health, NHS Chief Executive’s Annual Report 2011-12, 21 June 2012
  2. Department of Health, The quarter: quarter 2 2012-13, 20 December 2012
  3. Department of Health, PPRS Report to Parliament, 6th, 10th and 11th reports, 2002, 2009 and 2012
  4. Office of Health Economics (OHE), UK NHS medicines bill projection 2012 – 2015, analysis for the ABPI, June 2012
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