The Association of the British Pharmaceutical Industry (the “ABPI”), the body which represents the big pharma companies in the UK, has agreed with the Department of Health that the drug prices negotiated under the new Value Based Pricing (“VBP”) system should last for five years. The system will be introduced from 1 January 2014 for new drugs and will replace the 55-year-old Pharmaceutical Price Regulation Scheme (“PPRS”). Negotiations for the new pricing under VBP start in September. Drugs will be valued based on whether they whether ease the burden of illness, have benefits to society and are a step change in innovation, with an overall aim of ensuring best value-for-money and encouraging genuine innovation. The ABPI wants to propose prices for the drugs to the Government. Both parties agree that the new system should have predictability, stability and sustainability. The ABPI’s and Department of Health’s joint statement can be found here: http://www.abpi.org.uk/media-centre/newsreleases/2012/Documents/Joint%20DH-ABPI%20statement%20on%20arrangements%20for%20pricing%20branded%20medicines%20from%202014.pdf.