Alan Johnson, the UK’s health minister, hopes the price cut will generate substantial savings on branded drugs for the National Health Service and its $22 billion budget in talks that are expected to be completed by June, according to The Financial Times.

However, the 10 percent proposal is likely to make pharma unhappy, PharmaTimes points out, since drugmakers signed a five-year deal in 2004 offering price cuts of around 7 percent in return for increased allowances to encourage R&D of innovative products.

In August, the UK’s Health Department surprised drugmakers by saying that renegotiation of the Pharmaceutical Pricing Regulation Scheme was needed, a move which came after the UK’s Office of Fair Trading published a controversial report on the PPRS concluding that the NHS could save up to $1 billion annually, PharmaTimes reminds us.

The August statement prompted a cautious response from the Association of the British Pharmaceutical Industry, which said it recognized the Government’s need to gain best value for money from all aspects of NHS services, but pointed out that the system already benefits “from one of the most cost-effective medicines policies in Europe, with high levels of generics prescribed.” No word yet from the ABPI on the 10 percent proposal.