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Logo of bmjThis ArticleThe BMJ
BMJ. 2007 September 22; 335(7620): 578.
PMCID: PMC1988968
Drug Pricing

Misconceptions about PPRS

Aisling Burnand, chief executive

Iheanacho argues that the Office of Fair Trading may have pinpointed some areas of improvement in the existing Pharmaceutical Price Regulation Scheme (PPRS).1 However, its proposals for introducing a value based system of drug pricing are inherently flawed and, if implemented, would lead to a significant erosion of biopharmaceutical investment in the UK.

It is not true that “other countries have long been able to design, implement, and benefit from effective methods of value based pricing.” Many European countries base their pricing on international reference pricing where the UK's pricing has a central role. In Germany therapeutic reference pricing is used, which has led to a severe erosion of that country's research and development over the past decade. In Australia, which has been put forward as an example of value based pricing, the authorities have now decided to overhaul the system and drop their approaches to value based pricing.

What any serious assessment of drug pricing and reimbursement will uncover is that the real problem is in the detail of developing a system of value based pricing and the risk of replacing a system that works with an untried and poorly understood system that effectively undermines the balance between research investment and market return. The UK has traditionally been a leader in research in pharmaceuticals, and great care must be taken to ensure that it is not turned into a follower, which would undermine patients' access to new treatments.


Competing interests: None declared.


1. Iheanacho I. Slowly, the monster dies. BMJ 2007;335: doi:10.1136/bmj.39318.436539.59

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