The health department is poised to scrap the controversial scheme that has failed to stem the rise of the NHS's £6bn drugs bill and replace it with strict price controls.
Pressure for pay restraint in the NHS was dealt a blow this week as it emerged that chief executives' salary rises were three times higher than nurses' last year.
NHS managers face another tough winter after Frank Dobson, the health secretary, insisted the service must manage the rising tide of emergency admissions and continue to cut waiting lists.
The government's success in driving forward the Private Finance Initiative in the health sector was underlined this week with the signing of two further large contracts worth around £190m.
The beleaguered mental health service is to receive as much as £1bn in extra cash over the next three years but it will have to wait until the autumn to find out precisely how much.
Local government minister Hilary Armstrong has urged councils to refurbish rather than build new homes with the new money from the Comprehensive Spending Review.
The NHS Executive is to clamp down on health authorities and trusts that do not put enough cash aside to cover clinical negligence claims against them.
Nurses, midwives and non-clinical NHS staff could be offered large pay increases soon, despite Gordon Brown's insistence that he will keep the lid on public sector pay.