Having Your Cake and Eating ItOffice of Fair Trading Proposal for Funding New Drugs to Benefit Patients and Innovative Companies

There are insufficient resources in the UK to fund all new technologies and new indications approved by the National Institute for Health and Clinical Excellence (NICE). Diverting funding from existing sources will have a detrimental effect on the provision of other priority services. The UK Office of Fair Trading (OFT) recently suggested a value-based pricing approach that appears workable but has generated considerable debate. Their proposal of a 25% premium for the originator product once generics are available is more generous than seen in a number of other European countries, where typically only the lowest priced product is reimbursed. The OFT proposal for a maximum 50% premium for patent-protected products, versus the prices of generics in a class or related classes, is also more generous than the proposed reforms for the pricing of proton pump inhibitors in Sweden or current reforms in Germany.