The deal struck between the government and the pharmaceutical industry to limit the amount the NHS spends on branded drugs must become ‘more transparent’, the director of NHS Clinical Commissioners has said.

Julie Wood told HSJ that clinical commissioning groups across the country find it difficult to see how money which is returned to the NHS under the pharmaceutical price regulation scheme reaches them.

She added that NHS Clinical Commissioners is also working to ensure that CCGs should have a place “around the table” to help influence the next version of the pricing agreement. The current scheme expires in 2018.

Under the five year voluntary scheme, a cap is placed on growth of the NHS’s spending on branded medicines. Any income drug companies receive above the cap is returned to the government as a rebate.

Ms Wood said: “We’ve got to get a much greater understanding and transparency in the PPRS in what it does and what it doesn’t do.”

Currently, NHS England adds the rebate payments - estimated to be worth £1bn over 2014-15 and 2015-16 - to CCGs’ allocations at the start of the year based on their estimated drug spending.

However, local commissioners have expressed frustration that they cannot see how the scheme money is allocated.

The pharmaceutical industry has also been frustrated by not being able to see how the money is used.

Ms Wood said: “When you speak to the Department of Health, they are clear that the rebate each year will go into the NHS England allocation.

“What we can’t see is how that then translates into allocations through the system.

“What we have got to do is track that. For instance, if the pharmaceutical industry gives back £1m, it goes in but it is also seen to be coming out.

“The frustration that commissioners feel is that they don’t see it so they don’t understand it. They don’t know if they are getting the gain or not.”

Ms Wood added: “The other conversation we are having is about who negotiates the PPRS. We really need to ensure that commissioners are there trying to influence the next iteration of the PPRS so that they understand it and it works as it should do.”

She contrasted the way the rebate money is allocated in England to how the Scottish government uses its rebate money.

“In Scotland [the money] is placed in a separate pot – it’s all held centrally and they put it in a new medicines fund.”

HSJ understands that the idea of creating a similar centralised fund was raised in discussions last year between the government and the Association of the British Pharmaceutical Industry, but was not pursued.