It involves a non-contractual agreement between the UK Department of Health and The Association of the British Pharmaceutical Industry (ABPI).
The purpose of the scheme is to achieve a balance between reasonable prices for the NHS and a fair return for the pharmaceutical industry.
The current PPRS scheme, using a value-based pricing mechanism, came into effect on 1 January 2014, to run for no less than five years.
[2] In December 2014 Hoffmann-La Roche successfully appealed against a decision of the National Institute for Health and Care Excellence appraisal committee in respect of Kadcyla on the basis that it should have considered that under the scheme, the industry had agreed to cap growth in the drugs bill to 0–1.9% a year for the next five years.
However it is also important that pharmaceutical companies, represented by the ABPI, are able to maintain sufficient levels of profit and competitiveness to enable them to invest in sustained research and development.