The National Health Service pharmaceuticals market. Recent and prospective reforms.

Abstract

The way that medicines are supplied and paid for in the UK has altered dramatically since the National Health Service (NHS) was designed in 1948. As the government now faces acute pressure to reduce public sector borrowing requirements, careful control of public expenditure is necessary if sharp rises in taxes are to be avoided. Furthermore, advances in medical technology have dramatically increased the cost of healthcare since the NHS began. The doctor-patient relationship has also changed in that it is no longer based on authority but is evolving into a partnership based on informed consent. Consequently, there is a need for a radical review of the system. 1. The Current System and its Defects When the NHS was first established, all medicines were supplied free if prescribed by a doctor; however, this was unsustainable in the long term. The prescription charge has risen much faster than the rate of inflation since 1968, and since 1979 the charge has risen at more than 3 times the rate of general inflation.[l] The current charge of £4.25 is high compared with the cost of many medicines, and it exceeds the cost of about 50% of items. In 1990, the total revenue raised by the prescription charge was £250 million, or 8% of the total cost of drugs. 82% of UK prescription items were exempt 1 Full details of this study have been previously published. Green D, Lucas D. Medicard: a better way to pay for medicines? London: Institute of Economic Affairs, 1993. This article is published with permission. from the charge. The exemptions to the prescription charge are generous compared with those in other European countries (table I) and many are difficult to justify (table II). 48% of the population is exempt from prescription charges and only 18% of prescription items are subject to the charge, primarily because of heavy usage by the elderly, who are not expected to pay. Furthermore, exempt patients are not required to pay for any medicines at all, whereas in most other countries patients are only exempt from co-payment for treatments related to the specified disease. Moreover, chronic conditions requiring continuous drug therapy are not exempt in the UK. Conditions with a strong case for exemption include mental illness, Parkinson's disease, rheumatoid arthritis, cystic fibrosis, pernicious anaemia, asthma and Wilson's disease. Measures intended to influence doctors' prescribing include the imposition of the selected list in 1985; the general practitioner (GP) fundholding scheme, which gives fundholding practices a fixed budget; the indicative prescribing scheme, which applies to nonfundholding GPs; the encouragement of generic prescribing; supplying information to GPs about the cost of their prescribing decisions; and providing advice about therapeutic alternatives. Measures intended to influence doctors' prescribing and to control spending, such as the indicative prescribing scheme,[3] may adversely affect decisions made by doctors, with damaging results for patients. There is already evidence that therapeutic advances are being with