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UK drug pricing negotiations will begin next month

ABPI and DH confirm date and outline topics of discussion for implementing VBP

Talks that will determine the future shape of the UK's pricing and reimbursement policy will begin in September it has been confirmed.

The UK's Department of Health (DH) and the Association of the British Pharmaceutical Industry (ABPI) have at last outlined details of their forthcoming negotiations on the implementation of a value-based pricing (VBP) system and in a joint statement set out some of the key points to be addressed.

These include deciding how VBP will work alongside a revised version of the existing Pharmaceutical Price Regulation Scheme (PPRS), which is due to expire at the end of 2013.

It is currently proposed that after 2013 a VBP system, incorporating a broader assessment of a product's worth, will be used to determine prices for medicines that are newly launched onto the UK market, while an updated version of the PPRS will be used to decide the price of branded drugs already available.

The upcoming negotiations on how exactly this will work are set to be a testing affair, however, with the ABPI having made several criticisms of the introduction of VBP during the past year, raising concerns it will not reward the incremental nature of innovation nor improve uptake of new medicines.

“Whilst we support a broader definition of value for the assessment of medicines, we are not convinced that value-based pricing will encourage innovation or reward the most effective medicines,” said the ABPI's Stephen Whitehead in the body's most recent statement on VBP.

“Given that our medicines are amongst the lowest priced in Europe, we believe promoting innovation would be better served by developing a pricing scheme that is flexible, holistic, negotiated in a single agreement and which rewards the discovery of new medicines.”

Pharma companies themselves have also entered the fray, with Roche challenging draft guidance from NICE turning down its drug Zelboraf (vemurafenib) for a melanoma indication, claiming the decision was based on a series of “key factors” that constitute the future VBP scheme.

Roche has reason to be particularly anxious about the introduction of VBP, as its launch date coincides with the end of the Cancer Drugs Fund – a government scheme to pay for drugs not approved for mainstream NHS use and through which Roche's drugs Avastin and MabThera are among the top requested medicines.

Starting next month the government-industry negotiations will look to address this issue, and the DH and ABPI said: “There is the possibility that a small number of existing medicines might also be assessed [through VBP] and potential candidates might include some of those which are currently being funded through the Cancer Drugs Fund.”

Overall, the government's objectives for VBP are:
• To improve outcomes for patients through better access to effective medicines 
• To stimulate innovation and the development of high value treatments
• To improve the process for assessing new medicines, ensuring transparent, predictable and timely decision-making
• The inclusion of a wide assessment, alongside clinical effectiveness, of the range of factors
through which medicines deliver benefits for patients and society
• To ensure value for money and best use of NHS resources

A VBP assessment would be carried out as early as possible for each drug, and the government said it believes companies will be able to predict well in advance how prospective products are likely to fare.

Regarding the PPRS, which is expected to be in place for five years from January, 2014, proposed changes to the scheme include minimising bureaucracy, especially for small- to medium-sized businesses, and ensuring the scheme is responsive to changes in science and NHS demands.

3rd August 2012


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