Drug makers could leave UK over Government's 'breakthrough' obsession, warns trade body chief Stephen Whitehead Stephen Whitehead, chief executive of the Association of the British Pharmaceutical Industry (ABPI), said that "the Government wants to target resources at big breakthroughs, but the science shows us that developments in medicines are made in small steps." He warned that Britain must "recognise and reward the investment that goes into creating innovative new medicines," otherwise "our manufacturers will go abroad." He added: "Our industry, our economy, and our healthcare system will suffer." His comments come as the drug industry prepares to enter its next round of pricing negotiations with the Government in the autumn. Under the Pharmaceutical Price Regulation Scheme, prices of medicines are renegotiated every five years and there is a limit on profits that companies can earn from supplying drugs to the NHS. But the Government is planning to switch to a system of "value-based pricing" in a bid to better promote innovation, where new medicines will be priced according to their expected benefits to patients. The scheme is expected to come into force from January 2014. There is concern, however, that the system could focus too much on rewarding breakthrough medicines rather than the step-by-step, or "iterative" developments, that improve on previous medicines. "In pharmaceutical and medical research, you rarely get that leapfrog, eureka moment," said Mr Whitehead. What you need to reward is a process of discovery because the process is the key thing. He warned that without the "right pricing environment in the UK," the "biggest threat is investment and research and development goes overseas." A spokesperspon for the Department of Health said: "There is no question of incremental innovation that delivers benefits for patients not being recognised and appropriately rewarded in the new system. "Incremental improvements can be important - for example, reductions in side-effects can mean that more patients are able to benefit from a treatment," he added. Where a treatment offers improvements over alternatives, this will be reflected in its 'core' pharmaco-economic evaluation, which will take place under Value Based Pricing. Earlier this year, a Government report revealed that Britain had some of the lowest drug prices in Europe in 2010. Partly due to the strong pound, prices were on average more than two-and-a-half times cheaper than the US.