The OFT announced on 13 September 2005 that it is to carry out a "market study" into the Pharmaceutical Price Regulation Scheme (PPRS). A market study is the first stage in a process, which can have a number of different outcomes, but what is sure is that the PPRS will now be carefully scrutinised for its ability to meet the needs of patients while providing the taxpayer with value for money.
The PPRS is a voluntary scheme, which sets a cap on the profits that drug companies can make on sales of branded medicines to the NHS. It is renegotiated every five years. The scheme aims to strike a balance between providing the NHS with safe and effective medicines at reasonable prices while also incentivising the pharmaceutical industry to develop new and improved medicines. The OFT study aims to assess how effectively it does this. Healthcare and the interaction between government and markets are two of the OFT’s stated priority areas.
