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Facing the future

Pharma will need to set out robust and detailed arguments to win over Brown

Gordon BrownThe next two years will see the most tumultuous period in a decade for pharmaceutical government relations professionals in the UK.

From revolutionary pricing pressures to a complete reorganisation of government, the UK pharmaceutical industry has a new and possibly difficult road ahead. In addition to the routine challenges that the UK pharma sector must continue to address: industry rationalisation, pipeline planning, the evolution of European regulatory activities, responding to Third World needs etc. It must also be conscious that the clock is ticking on the time within which the government has to respond to the recent report from the Office of Fair Trading (OFT).

The report, which was published on 20 February, controversially recommends scrapping the Pharmaceutical Price Regulation Scheme (PPRS) and replacing it with a system (at present somewhat lacking in precision) whereby an independent body will set prices for individual medicines taking into account the relative value for patients. The government is due to respond to the recommendations of the report in early July. If this recommendation is accepted, would that imply another price setting body to sit alongside the National Institute for Health and Clinical Excellence (NICE), or even possibly an extension of NICE's current remit?

Previous attempts
To whomever the task may fall, the government and industry representatives involved will have a long haul ahead to set suitable prices for the different forms, strengths and volumes of a huge array of available medicines.In the early days of the PPRS, which was first agreed in 1957, a report in 1959 from a committee on the cost of NHS prescribing stated that after some two years of setting individual prices under the system then operating, the task was still not quite completed.It was this sequence of events that led to the evolution of the modern-day PPRS arrangement of constraining prices through the more general overall control of the profits each company makes on product sales to the NHS. But the potential re-configuration of pricing in the UK is not the only challenge that lies ahead.

New leader
In key areas, such as international development and child poverty, Brown's focus on moral arguments has long been apparent. As he prepares for government, however, the Chancellor has underpinned his moral arguments more explicitly. These debates have centred on concepts of liberty, responsibility and fairness, which have been defined in relation to realising the potential of individuals and society. Engaging with these moral pillars of the emerging Brown core narrative will be crucial to effectively presenting policy proposals to the new administration.

For the pharmaceutical industry, this will raise the question of how far it can expect its improved relationship with government, which has resulted from the considerable efforts put in by both sides through the operation of the Ministerial Industry Strategy Group, to continue. Establishing such a relationship has required a real willingness by both parties to recognise the concerns of the other side and to find common ground on a variety of issues, a process that, over a number of years, has helped to build a greater sense of stability, which is so important to the pharmaceutical industry.

Bigger picture
Although the Brown camp is rightly famous for being small and tight-knit, influencing a Brown government will involve engaging with a broader stakeholder and policy community than has been the case under Tony Blair.Perhaps the most obvious challenge for pharma will be influencing experts and regulators. As Chancellor, Brown's fondness for independent reviews Stern, Wanless, Lyons, Gershon et al has been prominent, and it is likely that a similar approach to preparing the way forpolicy shifts, with seemingly unassailable amounts of evidence and argument presented by 'independent' experts, will remain a hallmark of the Brown way of governing.

In many respects, this represents a real opportunity for the pharmaceutical industry, which is much more used to making rigorous economic cases than some other parts of British business. The sector must be ready with firm evidence of the innovation, value and effectiveness for which it can claim credit, as well as its full commitment to ensuring the future success of the health service through its continuing development of these qualities.

In addition, a Brown premiership is likely to see more moves to independent regulators overseeing day-to-day policy within strategic parameters set by the government. This approach was most clearly demonstrated in Brown's initial trademark move to give independence to the Bank of England in 1997, and there are strong signs that other areas will move in the same direction, not least with the current move to make official statistics independent of the government and speculation about a Bill of Rights.Engaging in these processes and winning influence at an early stage will be critical to any effective efforts to contribute to the policy environment under Brown.

Getting backing
A broader and potentially much greater challenge for industry will be mobilising broad sections of civil society behind major proposals. Gordon Brown and his team regard this as important for three key reasons:

  • They prefer the political ground to be prepared for them in large part - they are not as keen as Tony Blair to shape public opinion without grassroots support
  • They believe that public engagement with political issues and broad-based campaigns that connect to government are crucial to rebuilding trust in, and engaging with, the political process which is a key priority.
  • The Brown team is keenly aware of the electoral power of engaging positively with large, broad-based campaigns in civil society, not least from their experience with Jubilee 2000 and its successor campaigns.

These points were illustrated powerfully by the comments last year of Ed Balls, the Labour MP for the constituency of Normanton, when he urged child poverty and environmental campaigners to adopt the tactics of international development activists: Is it not time for the Treasury to be surrounded by bells, whistles and buggies as people demand an end to child poverty in Britain?

'By building a broad-based campaign, we will also expose the reality behind the empty posturing of the current Tory leadership on child poverty and we can do the same on the environment and on the response to globalisation too'.

Taken together, these changes will create a radically different environment in which to build relationships and engage with the policy making process, requiring new approaches across the board. This changed environment will impact on the pharma industry, as it will on other aspects of life in the UK.Those who lead and represent the industry, as well as those who head up individual companies, must prepare themselves for the new challenges they will inevitably face. However, this does not imply a new era of defensive responses to new challenges.

The attitude reflected in Ed Balls' comments on child poverty should be taken and used to encourage a robust approach by the pharmaceutical industry to promoting, as well as defending, its valid interests. Under the leadership of Brown, however, it will be essential to ensure that sound, supportable evidence exists for any claims being made. Unsupported claims and needless exaggeration can do untold damage to well-founded arguments and should be resisted at all costs in this new environment.

1st May 2007

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