UK benefiting from German reform?

- Last updated on GMT

Related tags: Pharmacology, Uk

Healthcare reform and cost containment affecting the rest of Europe
are making the UK increasingly attractive to the branded
pharmaceutical sector.

With healthcare reform and cost containment initiatives taking hold throughout Europe, the UK is becoming increasingly attractive to the branded pharmaceutical sector, according to Datamonitor.

Through price control deregulation the UK government could attract increased investment, but it must be careful to balance the interests of patients with those of the industry, cautions the commentary.

Earlier this month, the UK's Department of Health (DoH) announced that it is in consultation with the pharmaceutical industry regarding the potential for price deregulation. As drug manufacturers pull out of mainland Europe, due to the pressure healthcare reform is placing on profits, the UK is positioning itself to reap the rewards.

The UK and German markets have traditionally supported the highest prices for pharmaceutical products within Europe. However, wide-ranging healthcare reforms in Germany are reducing its attraction for drug manufacturers.

Pfizer and Merck recently announced that they were scaling back​ their R&D activities in Germany in the wake of reform proposals, with the former intending to move these activities to the UK.

"Others companies are likely to follow and if the UK plays its cards right it could position itself as a safe haven from the European healthcare upheavals,"​ according to Datamonitor. Recent events suggest that this is exactly the status the UK government is hoping to attain, it adds.

Significantly, the DoH is in discussions with the pharmaceutical industry over the relaxation or even abolition of the Pharmaceutical Price Regulation Scheme (PPRS). In effect, the PPRS is an indirect price control system. It limits the amount of profit that drug companies can make from dealing with the National Health Service and covers 80 to 90 per cent of pharmaceutical bulk buying in the UK.

If deregulation does occur, it could secure the UK a reputation for providing the most attractive pricing environment within Europe. However, the DoH has a difficult task ahead as it must strike a balance between ensuring the availability of affordable branded medicines whilst maintaining an attractive environment for pharmaceutical companies.

"While the climate in the rest of Europe is becoming increasingly unfavourable for the industry, the UK government has an opportunity to reap significant rewards if it can maintain and build on its reputation as a country that supports and rewards innovative drug development,"​ concludes Datamonitor.

Related topics: Preclinical Research

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