United Kingdom Pharmaceuticals & Healthcare Report Q4 2013 - New Market Study Published

Keen to consolidate public spending, and despite the clear success of the Pharmaceutical Price Regulation Scheme (PPRS), the government has identified drug prices as an area to focus on. In addition to restructuring the statutory PPRS, including a 10%, 15% or 20% downward price adjustment to drugs sold under the existing statutory scheme (which covers approximately 10% of the branded medicines consumed in the UK), the UK government is also aiming to implement a new value-based medicine pricing system that will replace the PPRS, which is due to end in 2014. Such developments signal the onset of an increasingly tough operating environment for drugmakers in the UK - despite the government stating that it has ring fenced the NHS budget. We will continue to monitor the situation and will adjust our forecasts accordingly once the decision on the restructure has been made.

Full Report Details at
- http://www.fastmr.com/prod/698077_united_kingdom_pharmaceuticals_healthcare_report.aspx?afid=303

Headline Expenditure Projections

* Pharmaceuticals: GBP23.74bn (US$37.85bn) in 2012 to GBP23.42bn (US$35.59bn) in 2013; -1.4% in local currency terms and -6.0% in US dollar terms. Local currency forecast virtually unchanged from Q313.
* Healthcare: GBP144.42bn (US$230.24bn) in 2012 to GBP147.45bn (US$224.12bn) in 2013; +2.1% in local currency terms and -2.7% in US dollar terms. Local currency forecast virtually unchanged from Q313.

Risk/Reward Rating: The UK continues to rank top in our latest regional Pharmaceutical Risk/Reward Rating (RRR) matrix, which assesses ten major markets in Western Europe. Moreover, the UK boasts one of the best Reward and also Risk scores globally. Even though the market growth rate is slowing down and the authorities are clamping down on reimbursement spending, we maintain our view that the UK's pharmaceutical environment will remain one of the most attractive globally.

Key Trends And Developments

* In August 2013, the UK BioIndustry Association (BIA) said the government's value-based pricing, a new statutory pricing scheme for branded medicines, could risk investments in the biotech sector. The health department plans to introduce the scheme in 2014, under which the National Institute for Health and Care Excellence (NICE) will assess the price of new drugs on the grounds of wider societal benefits and burden of illness. A low reimbursement framework discourages basic research and development, and the proposals will hamper positive development for the biotech sector, according to BIA CEO Steve Bates, who added that the UK will no longer be an attractive global launch market for new treatments.

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