Pharmaceutical Price Regulation Scheme


Health Economics

  • The Pharmaceutical Price Regulation Scheme (PPRS) regulates the overall profitability of pharmaceutical companies with sales of branded prescribed medicines to the National Health Service in the UK. Its objects are to secure the provision of safe and effective medicines for the National Health Service at 'reasonable' prices; promote a strong and profitable pharmaceutical industry capable of sustained research and development; and encourage the efficient supply of medicines to pharmaceutical markets in the UK and elsewhere. It operates through negotiation based on companies' financial records and regulates both the return on capital (usually restricted to a range of pre-tax 17-21 per cent on assets) and prices. It allows freedom of pricing for all new chemical entities, requires companies to seek permission for any price increases (which have to meet particular criteria), requires companies with NHS sales in excess of a critical amount per annum to submit data on sales, costs, assets and profitability and to repay any excess profits over an agreed return on capital.
  • acronymPPRS