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May 2018

NHS drug costs outstrip increase in budget

NHS funding levels are failing to keep pace with growth in NHS spending on medicines, potentially compromising patients’ access to drugs, according to a 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% a year, while the NHS budget grew by an average of only 1% a year over the same period.

For the first time it seems that the cost of prescribing in hospitals is overtaking that in general practice. Most 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% a year since 2010-11.

In primary care, spending growth has been much lower. Although the volume of prescription items provided to patients increased by almost half in the decade to 2016 (to 1.1 billion items), this was offset by a reduction of nearly 25% in the average cost per prescription item (to £8.34).

The analysis shows much of the growth in the number of prescriptions in primary care is due to increases in the use of statins and anti-depressants.

In the hospital sector, a lack of robust data means the scale of and reasons for growth are unclear, 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.

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.

‘Difficult choices lie ahead as it is becoming harder to balance the competing goals of giving patients access to effective treatments 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.'

The King’s Fund. The rising cost of medicines to the NHS, April 2018

May 2018