GSK responds to PPRS renegotiation plans

Pharmaceutical Company Restructures

GlaxoSmithKline (GSK) has issued a response to plans from the government to re-negotiate the Pharmaceutical Pricing and Regulation Scheme (PPRS) agreement that finished in 2005.

These comments come after a recent report from the Office of Fair Trading (OFT), which set out the targets of boosting rewards for good value, lowering inefficiency and enhancing innovation of pharmaceuticals.

While accepting that the current system can be improved, GSK adds that the relevant issues go beyond price alone and the matter of healthcare expenditure is a complex one.

Andrew Witty, president of European pharmaceuticals at GSK, said: "In addressing the challenges of healthcare costs today, we must not lose sight of the healthcare needs of tomorrow."

"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."

He added that the company seeks an environment that promotes the development of novel treatments while giving genuine incentives for value, with reform requiring careful deliberation across the entire healthcare system.

In June 2006, Lehman Brothers analyst Jo Walton stated that GSK is "leading the way" in the field of drug development, with this opinion echoed by Jane Kidd from Wood Mackenzie, who focused on the company's strong research and development pipeline.

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