Issued Thursday 2 August 2007, London, UK

GlaxoSmithKline (GSK) today made the following comment regarding the UK Government's announcement that it intends to re-negotiate the Pharmaceutical Pricing and Regulation Scheme (PPRS) agreement, which was concluded in 2005.

In its recent report, the Office of Fair Trading (OFT) outlined its goals to improve reward for value, drive out inefficiencies, and stimulate pharmaceutical innovation. GSK supports these goals. We accept the OFT's view that there is scope for improvement in the current system to achieve them. However, as was noted by the OFT, there is no simple solution to management of healthcare expenditure, and current challenges are about much more than price.

Commenting on todays announcement, Andrew Witty, President of European Pharmaceuticals, GSK said:

In addressing the challenges of healthcare costs today, we must not lose sight of the healthcare needs of tomorrow. We want an environment that genuinely rewards value and encourages the development of new medicines and vaccines. This will require thoughtful consideration across the system as a whole. If discussions focus only on cost-saving and on price, we will not serve the long-term needs of patients, industry and, importantly, UK competitiveness.

The PPRS has served patients, industry and the UK well for 50 years, providing a stable framework and enabling the UK and the industry to adopt a long-term approach to developing new medicines. The goal of any evolution of the PPRS now must be pricing that rewards innovation, fast access to medicines for patients, and improved uptake of innovative medicines in the NHS. As todays Government response to the OFT makes clear, industry and government must work together to identify the right ways forward.

GlaxoSmithKline one of the worlds leading research-based pharmaceutical and healthcare companies is committed to improving the quality of human life by enabling people to do more, feel better and live longer.

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