While international comparisons are always difficult, some lessons can be gleaned from the experience of other countries with stricter regulation than the UK. Such policies have failed to reduce the national drugs bill.

In Sweden, sales of prescription drugs rose by 16.7 per cent of pharmacy buying-in prices during 1998, despite the introduction of higher patient co-payments and the delegation of drug policy to sub-national level.

Germany, which has more rigorous price controls than the UK, saw prescription drug spending rise by 4.3 per cent between 1997 and 1998 in the health insurance schemes (Krankenkassen), with increases of 14.9 per cent and 13.4 per cent in the second half of the year in the former West Germany and East Germany, respectively.

Australia saw its drug bill rise by 8.3 per cent in the year to September 1998, even though the number of prescriptions in the Australian Pharmaceutical Benefits Scheme rose by only 1 per cent. The rise was not due to any significant changes in the mix of public and private payments. It was more a result of switches to newer, more expensive drugs.

The proportion of new products subject to cost-effectiveness analysis in the pharmaceutical benefits scheme listing now stands at 31 per cent. So almost one-third of drugs paid for by the Australian scheme are considered to be good value for money.