Pharma has agreed to capped growth again - in exchange for uptake promises
The UK has a new five-year Voluntary Pricing and Access Scheme (VPAS) for branded medicines, which came into force on 1 January 2019.
The deal, which replaces the long-standing PPRS agreement, includes a cap of 2% growth on the total medicines bill for each year of the agreement, with any NHS spending over this limit being repaid by the industry.
This is a little higher than the 1.1% rate the medicines bill growth rate has been kept to over the past five years – but much lower than the overall NHS spending growth rate.
The government estimates this will result in £930m in savings. However it says new measures to speed-up decision-making on new medicines mean they could reach patients up to six months earlier than at present. This low rate of growth, combined with new price controls introduced by NHS England on new innovative medicines, means the pharma sector isn’t jumping for joy over the deal. Nevertheless, it provides some stability and predictability for the UK sector, where the uncertainties of Brexit continue to threaten the overall attractiveness of the UK market.
Industry leaders who have voiced their support for the deal include Novartis’ UK country president Haseeb Ahmad and EMIG’s chairman Leslie Galloway, who says the ABPI’s negotiating team had to battle against the government plan to set the growth rate even lower (read Leslie’s commentary here).
Haseeb Ahmad, UK country president, Novartis
The industry has secured assurances that new medicines will benefit from fast-tracking from NICE, and that NHS England will also promote faster uptake – examples of this include recent deals on CAR-T therapies, plus a new expansion in the use of Keytruda in lung cancer, announced late last year. There are new ‘greater flexibilities’ in the deal aimed at helping small and medium-sized pharma companies, including reintroducing ‘the taper’ on rebate payments to reflect the different revenue levels across the sector, which is welcome news for these firms.
Mike Thompson, Chief Executive of the ABPI, said: “This agreement is a commitment by the government and the NHS to work with us to support innovation for the benefit of patients. This means that people across the UK should see better and faster access to the most effective new medicines and vaccines.”
Mike Thompson, chief executive, ABPI
Having agreed a ceiling on growth, the question of speed of market access for novel treatments will undoubtedly be the key metric preoccupying UK industry leaders over the next five years.
The Department of Health and Social Care (DHSC) overview
The affordability mechanism
Uptake, access and outcomes
Value assessment
Commercial arrangements
Routes to market
Scheme operation
Read the full 2019 Voluntary Scheme for Branded Medicines Pricing and Access document here
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