The United Kingdom's ("UK's") method of controlling the prices its Department of Health pays for innovative medicines has been, up until now, the Pharmaceutical Price Regulation Scheme ("PPRS"). The PPRS has been a voluntary scheme run over many years between the Department of Health and the branded pharmaceutical industry represented by the Association of the British Pharmaceutical Industry ("ABPI"). Its objective was to deliver the provision of safe and effective medicines at reasonable prices to the National Health Service ("NHS") while promoting innovation, the rapid uptake of new clinically and cost effective medicines, and in a sustainable manner.
Over recent years, the National Institute for Health and Care Excellence ("NICE") has been taking on a more visible and key role. Its job has been to improve outcomes for people using the NHS by producing evidence-based guidance by way of advice to healthcare professionals and to develop quality standards and measures for those providing health care services and also providing information to practitioners and managers in both health and social care.
The UK Government's response to the Health Select Committee report of 2012-2013 on NICE was to re-establish NICE as a new statutory body giving it a key position in the healthcare system. It gives NICE the role of deciding the value-based pricing of medicines. Thus, value-based pricing will replace the current PPRS, when it expires in January 2014.