Issued – Wednesday 18 June 2008, London, UK

GlaxoSmithKline (GSK) has been actively involved in discussions with the Department of Health and the pharmaceutical industry since the review of the PPRS was announced in July 2007.

Eddie Gray, President European Pharmaceuticals said: “We believe a reasonable balance has been struck in the new PPRS agreement. It is clear that the Government is facing significant funding pressures and challenging efficiency targets, however they have recognised the importance of supporting innovation, while achieving value for money for the NHS.

“Important founding principles have been preserved in the new PPRS agreement namely that industry will retain its ability to freely price medicines and to increase pricing on medicines which offer genuine value to patients and the NHS. The retention of the PPRS structure is an important signal of the Government’s desire to maintain a positive working relationship with the industry.

“This 5-year deal, with no break clauses will provide stability and predictability for industry. The new PPRS agreement includes savings of 5% across the five years of the agreement. However, the Government is seeking to deliver an important part of its savings target by pushing down the prices of older, off-patent medicines, and by reducing the impact of newer, innovative medicines, which will face an average price cut of 2%.

“Importantly there are also measures to support innovation and earlier uptake of new medicines providing patients with faster access to modern life-saving treatments and cures.

“The review of Health Technology Assessment mechanisms aimed at delivering more balanced appraisals of new medicines and the retention of free pricing and modulation are also welcome.

“We now want to work with the Government to take forward the new scheme and restore the predictability and stability that have been core elements of the UK environment for many years.”

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