The pharma price regulation30th October 2008
Michael White, assistant editor (politics) of The Guardian on pharmaceutical price regulation.
Amid issues such as the global financial collapse, the debate about the pharmaceutical price regulation scheme in the House of Lords may have been neglected by a wider audience.
The scheme, which has governed relations between the pharmaceutical industry and the Department of Health since 1956, is a multibillion pound component of the NHS budget and second only to salaries.
The government hopes to modernise the scheme but it has angered the industry to such an extent that that "Big Pharma" may take its valuable UK R&D spend elsewhere.
Lord Howe, the veteran Tory health spokesman in the Lords, believes ministers acted too hastily in the summer of 2007 to renegotiate the 2005 scheme and also used "strong arm" tactics.
There was nothing illegal in what ministers had done but "was it wise to frighten the boardrooms at GlaxoSmithKline and AstraZeneca and elsewhere" by creating two new benchmarks for deciding prices, the price of therapeutic equivalents and the price of drugs elsewhere?
The statutory scheme now in place is there only for firms that chose not to join the voluntary scheme, though haste was dictated by events not the Department of Health.
With talks still under way, Lord Howe has been "partially mollified" and hopes the industry's resentment might abate.
However, suspicion of market abuses by Big P and suppression of "unhelpful" data remain widespread.
Before 2005, the last time MPs investigated Big P was in 1914 when there were also moans about "grossly exaggerated claims".
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