The management of the cost and utilisation of pharmaceuticals in the United Kingdom

Abstract

The British National Health Service (NHS) provide comprehensive health services, including prescription drugs, to the entire population. Thus pharmaceuticals are seen as part of the provision of health care, not as an isolated cost element. UK expenditures on pharmaceuticals has been relatively low by European and US standards. The basic dilemma facing pharmaceutical policymakers is the need to control public spending on drugs while encouraging a successful UK pharmaceutical industry. A highly centralised policymaking apparatus has historically permitted a fairly collaborative approach with the pharmaceutical industry. Prices are not controlled directly as in some other European countries; rather, producers negotiate an allowable rate of return on all sales to the NHS. This gives producers considerable discretion to set prices for new drugs without government interference Thus, prices are somewhat higher than in comparable European countries, but utilisation rates are among the lowest. The credit for low utilisation (and high generic substitution rates) goes to the conservative nature and medical education of British general practitioners. A general conclusion is that pharmaceutical spending has been curbed with minimal damage to the UK pharmaceutical sector.