United Kingdom Pharmaceuticals and Healthcare Report Q3 2008

The UK still ranks among the leading markets in Europe, valued at GBP17.4bn (US$32.3bn) in 2007. Ranking fourth in Western European for both the Business Environment Rankings and in market size, establishing market presence is still a key aim for pharmaceutical companies. The outline for the new Pharmaceutical Pricing Regulation Scheme (PPRS) is set to bring in additional 5% reductions from 2009 onwards, with the potential for additional savings if the drugs bill expands over 6.7% in 2008 or 2009. Price reductions will constrain, but not erode prescription market growth, however, with BMI forecasting 5 years of consecutive drug market growth through to 2012. This will be buoyed by

the UKs well established over the counter (OTC) sector, which should also continue to expand, despite growing concerns over the economy.

The fallout from the PPRS in for pharmaceutical companies remains unclear. Many had threatened to reduce R&D investment after it was announced that the terms of the new deal were to be re-negotiated, however, there has been little published discontent from drugmakers. Meanwhile, the National Institute of Health and Clinical Excellence (NICE)s criteria for recommending drugs may become clearer in future after the UK Court of Appeal ruled that a fully executable version of its economic model, used to evaluate the cost-effectiveness of treatments, should be made available to Japanese drugmaker Eisai.

BMIs new Burden of Disease Database (BoDD) has highlighted the current and growing impact that depression is having on the UK population. Depression has damaging effects not only the patient, but also for the economy, factors which are both reflected by the BoDD. In terms of total disability-adjusted life years (DALYs) lost per capita, the UK also fairs poorly in Western Europe, ranking 16th. Meanwhile, company highlights for this quarter include the new GlaxoSmithKline (GSK) CEOs growing focus on emerging markets and positive performances from Alliance Boots and Shires decision to establish a new parent company in Ireland, as a result of the countrys tax benefits.