Spending on branded drugs is going to fall in real terms by 2015, according to research commissioned by the Association of the British Pharmaceutical Industry, the body that represents big pharma companies. In fact, whilst the spending will rise by 1.3% annually by 2015, this compares markedly with spending increasing by 3.7% per year for generic drugs, as many widely-used drugs come off patent in a short space time without sufficient replacement for the big pharma suppliers – a phenomenon known as the “patent cliff”.
Meanwhile, Earl Howe, the Health Minister, says that this confirms that resources will be freed up over the coming years as a significant number of medicines come off patent. “These funds will be available to spend on the most effective treatments – whether medicines or otherwise. Although it is not surprising for the industry to warn that spending on their own medicines may decline, we are determined to ensure patients continue to get access to the newest drugs at a price which represents value to them and to the taxpayer. That is why we will shortly begin negotiations with the industry on a new value-based pricing scheme.”