Are drug companies justified in pulling out of the NHS pricing agreement?

Rebates risk harming one of the few UK industries considered world class, writes James Moore

The British pharmaceutical industry wants a scheme that is cheaper and more favourable to the industry (PA)

US drug giants Eli Lilly and AbbVie have become the first to pull out of a decades-long voluntary pricing agreement with the NHS following a sharp rise in payments.

At first glance, their withdrawal looks like a potentially self-destructive hissy fit.

Pharmaceutical companies pay a rebate to the health service when branded drug purchases exceed an agreed level. The rebate is uncapped.