Rising spend on NHS medicines could jeopardise patients’ access to drugs, warns The King's Fund

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NHS funding levels are failing to keep pace with growth in NHS spending on medicines, potentially compromising patients’ access to drugs, according to a new report from The King's Fund.

The report shows that total NHS spending on medicines in England has grown from £13 billion in 2010/11 to £17.4 billion in 2016/17, an average growth of around 5 per cent a year, while the NHS budget grew by an average of only 1 per cent a year over the same period.1 This includes both cheaper generic drugs and branded medicines; in recent years spending on the latter has been constrained by the Pharmaceutical Price Regulation Scheme.2 

The majority of the growth in spending has been in hospitals, which now account for nearly half of the total amount the NHS spends on medicines, with costs having grown by around 12 per cent a year since 2010/11. A lack of robust data means the scale of and reasons for this growth are not clear, although it is likely to have been fuelled by an increase in the number of patients treated and the introduction of expensive new treatments, for example drugs for cancer and auto-immune conditions. 

In primary care, the analysis shows that increases in the use of drugs such as statins and anti-depressants have resulted in rapid growth in the number of prescriptions issued, with more than 1 billion items prescribed in 2016. Yet spending growth has been much lower than in hospitals thanks to the success of policy initiatives such as encouraging the use of cheaper generic drugs that have led to a reduction of nearly 25 per cent in the average costs per prescription item.

With the NHS facing unprecedented pressures, policy-makers have recently sought to exert greater control over medicines spending, for example by introducing a budget impact test for new products that will cost more than £20 million a year, reforming the Cancer Drugs Fund and restricting access to medicines that can be bought over the counter or are deemed low value. At the same time, the increasing use of biological treatments and the development of effective but expensive products, such as new drugs to treat hepatitis C and prevent HIV, are creating new cost pressures.

The report warns that difficult choices lie ahead as it is becoming harder to balance the competing goals of giving patients access to effective treatments, incentivising innovation in the pharmaceutical sector and ensuring the amount the NHS spends on medicines is affordable.

Helen McKenna, Senior Policy Adviser at The King’s Fund, said: ‘Over the years the NHS has successfully used a number of policies to contain spending on medicines while ensuring access to medicines, such as encouraging the widespread use of cheaper generic drugs. But rising demand for health care coupled with newer, more expensive treatments and an unprecedented funding squeeze means the NHS is now struggling to strike a balance between the competing priorities of access, innovation and affordability.

'It is important to tackle inappropriate prescribing and the overuse of medicines, especially antibiotics. However, we are now seeing policy-makers implementing increasingly controversial measures to control the medicines bill. With the choices facing policy-makers becoming more difficult, there is a risk of returning to the 1990s, when funding pressures led to widespread concern about the erosion of patients' access to medicines.'

  • 1. These figures are subject to a number of limitations. The figures are based on list prices published by manufacturers (in practice prices paid by the NHS will often be lower thanks to discounts) and do not include some medicines provided on the NHS.
  • 2. The Pharmaceutical Price Regulation Scheme (PPRS) is a voluntary agreement between industry and the Department of Health and Social Care to control spending on branded medicines. This briefing analyses spending on all types of drugs, not just branded medicines.

Notes to editors

The rising cost of medicines to the NHS: what’s the story was published by The King’s Fund on Thursday 26 April.

For more information or to request an interview, please contact Gemma Umali, Press and Public Affairs Manager on 0207 307 2583/2585 or g.umali@kingsfund.org.uk.

The King's Fund is an independent charity working to improve health and care in England. We help to shape policy and practice through research and analysis; develop individuals, teams and organisations; promote understanding of the health and social care system; and bring people together to learn, share knowledge and debate. Our vision is that the best possible health and care is available to all.