HC Deb 02 June 1998 vol 313 cc177-8W
Mrs. Ellman

To ask the Secretary of State for Health what mechanisms exist to assess, monitor and regulate price increases in drugs used by the NHS. [43030]

Mr. Milburn

The prices of branded medicines sold to the National Health Service are regulated through the pharmaceutical price regulation scheme (PPRS), which is a voluntary agreement between the health departments and the pharmaceutical industry. The scheme sets for each major company a profit cap (with various cost allowances), based on return of capital employed, within which the company is allowed to establish the price of new medicines it proposes to sell to the NHS. Increases in the price of medicines have to be agreed by the Department. Small companies (sales below £20 million per annum to the NHS) are not required to supply such detailed information as a matter of routine, but remain subject to the price restraint provisions of the scheme.

Generic products are not included in the PPRS. We do not control their prices which are determined by competitive market forces.