The health secretary is today set to announce a deal with the pharmaceutical industry which could cut the price of branded drugs by seven per cent.

John Reid will unveil the results of negotiations which could save the NHS £370 million per year.

The taxpayer could benefit to the tune of over £1.8 billion over the course of the five year course deal.

The drugs firms will also get an increased allowance for research and development as the government seeks to encourage UK science.

Britain currently spends around £11 billion per year on medicines with the figure set to rise as research advances are made and public health worsens.